# EDGAR Filing Document

**Accession Number:** 0001795851
**File Stem:** 0001663577-25-000278
**Filing Date:** 2025-9
**Character Count:** 2717321
**Document Hash:** a1a870eef742cc6d93e2e2e237f45cd9
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001663577-25-000278.hdr.sgml**: 20251119

**ACCESSION NUMBER**: 0001663577-25-000278

**CONFORMED SUBMISSION TYPE**: DRS/A

**PUBLIC DOCUMENT COUNT**: 59

**FILED AS OF DATE**: 20250915

**DATE AS OF CHANGE**: 20250912

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Favo Capital, Inc.
- **CENTRAL INDEX KEY:** 0001795851
- **STANDARD INDUSTRIAL CLASSIFICATION:** SHORT-TERM BUSINESS CREDIT INSTITUTIONS [6153]
- **ORGANIZATION NAME:** 02 Finance
- **EIN:** 880436017
- **STATE OF INCORPORATION:** NV
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** DRS/A
- **SEC ACT:** 1933 Act
- **SEC FILE NUMBER:** 377-07726
- **FILM NUMBER:** 251312574

**BUSINESS ADDRESS:**
- **STREET 1:** 4300 N. UNIVERSITY DRIVE
- **STREET 2:** SUITE D-105
- **CITY:** LAUDERHILL
- **STATE:** FL
- **ZIP:** 33351
- **BUSINESS PHONE:** 8333286477

**MAIL ADDRESS:**
- **STREET 1:** 4300 N. UNIVERSITY DRIVE
- **STREET 2:** SUITE D-105
- **CITY:** LAUDERHILL
- **STATE:** FL
- **ZIP:** 33351

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Favo Capital, Inc.
- **DATE OF NAME CHANGE:** 20230803

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Favo Realty, Inc
- **DATE OF NAME CHANGE:** 20191204

**As submitted confidentially with the U.S. Securities and Exchange Commission on September 12, 2025. This Amendment No. 1 to the draft registration statement has not been publicly filed with the U.S. Securities and Exchange Commission and all information herein remains strictly confidential.**

**Registration No. 333-**

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM S-1**

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

**FAVO CAPITAL, INC.**

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

---

| | | |
|:---|:---|:---|
| **Nevada** | **6159** | **88-0436017** |
| *(State or other jurisdiction of incorporation or organization)* | *(Primary Standard Industrial Classification Code Number)* | *(I.R.S. Employer Identification No.)* |

---

---

| | |
|:---|:---|
| **4300 N. University Drive Suite D-105 Lauderhill, Florida** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br> **33351** |
| *(Address of principal executive offices)* | *(Zip Code)* |

---

Registrant's telephone number, including area code **<u>1.833.328.6477</u>**

 **Spring Valley Solutions, LLC**

 **3651 Lindell Rd Ste D121**

 **Las Vegas, NV, 89103, USA**

 **T: (702) 982-5686**

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

*Copies of all communications, including communications sent to agent for service, should be sent to:*

---

| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Scott Doney, Esq.**<br> **The Doney Law Firm**<br> **4955 S. Durango Rd. Ste. 165**<br> **Las Vegas, NV 89113**<br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(702) 982-5686** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Michael Blankenship** <br> **Winston & Strawn LLP** <br> **800 Capitol Street, Suite 2400** <br> **Houston, TX 77002-2925**<br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(713) 651-2600** |

---

**Approximate date of commencement of proposed sale to the public:**

As soon as practicable after this registration statement is declared effective.

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

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

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

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

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

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

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

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

**EXPLANATORY NOTE**

This registration statement contains two prospectuses, as set forth below.

&nbsp;&nbsp;&nbsp;&nbsp;•  ***Public Offering Prospectus*** . A prospectus to be used for the public offering of [\*] shares
 of our common stock through the underwriters named on the cover page of this prospectus,
 which we refer to as the Public Offering Prospectus.

&nbsp;&nbsp;&nbsp;&nbsp;•  ***Resale Prospectus*** . A prospectus to be used for the resale by selling stockholders of [\*]
 shares of common stock, which we refer to as the Resale Prospectus, which we have filed on
 behalf of the selling stockholders pursuant to a Registration Rights Agreement with the selling
 stockholders that we would include their shares in the Resale Prospectus. Sales under
 the resale prospectus may only be made after the closing of our public offering.

The Resale Prospectus is substantively identical to the Public Offering Prospectus, except for the following principal points:

&nbsp;&nbsp;&nbsp;&nbsp;• they
 contain different front and back covers;

• they
 contain different Offering sections in the Prospectus Summary;

• they
 contain different Use of Proceeds sections;

• the
 Dilution section is deleted from the Resale Prospectus;

• a
 Selling Stockholders section is included in the Resale Prospectus;

• the
 Underwriting section from the Public Offering Prospectus is deleted from the Resale Prospectus
 and a Plan of Distribution section is inserted in its place; and

• the
 Legal Matters section in the Resale Prospectus deletes the reference to counsel for the underwriters.

The registrant has included in this registration statement a set of alternate pages after the back cover page of the Public Offering Prospectus, which we refer to as the Alternate Pages, to reflect the foregoing differences in the Resale Prospectus as compared to the Public Offering Prospectus. The Public Offering Prospectus will exclude the Alternate Pages and will be used for the public offering by the registrant. The Resale Prospectus will be substantively identical to the Public Offering Prospectus except for the addition or substitution of the Alternate Pages and will be used for the resale offering by the selling stockholders.

**The information in this prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell, nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.**

**PRELIMINARY PROSPECTUS**

**SUBJECT TO COMPLETION ON SEPTEMBER [\*], 2025**

**FAVO CAPITAL, INC.**

Shares of Common Stock

This is a firm commitment underwritten public offering of [\*] shares of common stock, par value $0.0001 per share, of Favo Capital, Inc., a Nevada corporation (the "Company", "FAVO", "we", "us", "our"). We anticipate a public offering price between $[\*] and $[\*] per share. We have granted to the underwriters an option, exercisable within 45 days after the closing of this offering, to purchase up to additional [\*] shares at the public offering price, less underwriting discounts and commissions. The underwriters may exercise this option solely for the purpose of covering over-allotments, if any, made in connection with the offering of the common stock offered by this prospectus.

Our common stock is presently traded on the over-the-counter market and quoted on the OTC Pink market under the symbol "FAVO." On September [\*], 2025, the last reported sale price of our common stock was $[\*] per share . In connection with this offering, we have applied to list our common stock on the Nasdaq Capital Market ("Nasdaq") under the symbol that resembles our new name. No assurance can be given that our application will be approved or that the trading prices of our common stock on the OTC Pink market will be indicative of the prices of our common stock if our common stock were traded on the Nasdaq Capital Market.

The offering price of the common stock will be determined between the underwriter and us at the time of pricing, considering our historical performance and capital structure, prevailing market conditions, and overall assessment of our business, and may be at a discount to the current market price. Therefore, the recent market price used throughout this prospectus may not be indicative of the actual public offering price for our common stock.

On August 7, 2025, our Board of Directors and majority of shareholders approved a name and symbol change and reverse stock split of our issued and outstanding common stock at a ratio of not less than 1-for-2 and not greater than 1-for-100, subject to receipt of a market effective date from Financial Industry Regulatory Authority ("FINRA"). The reverse stock split will not impact the number of authorized shares of common stock, which will remain at 500,000,000 shares. The share and per-share information in this prospectus do not reflect the proposed reverse stock split of the issued and outstanding shares of our common stock to occur on or immediately following the effective date of the registration statement of which this prospectus forms a part. This prospectus will be amended by an amendment to this registration statement to reflect the reverse stock split ratio and the effect of such reverse stock split.

If listed, we would be a 'controlled company' within the meaning of Nasdaq Listing Rule 5615(c) because Vincent Napolitano, Shaun Quin, and Glen Steward (the "Founders"), through a voting agreement governing 10,000,000 shares of Series B Preferred Stock, each with 50 votes per share, collectively control approximately 87% of the voting power on all matters concerning shareholder approval, including the election of directors.

**INVESTING IN OUR SECURITIES INVOLVES A HIGH DEGREE OF RISK. SEE "** **RISK FACTORS" BEGINNING ON PAGE 31 OF THIS PROSPECTUS. YOU SHOULD CAREFULLY CONSIDER THESE RISK FACTORS, AS WELL AS THE INFORMATION CONTAINED IN THIS PROSPECTUS, BEFORE YOU INVEST.**

**NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.**

---

| | | |
|:---|:---|:---|
| | **Per Share** | **Total** |
| Offering price | $— | $- |
| Underwriting discount and commissions | $- | $— |
| Proceeds to us before offering expenses <sup>(1)</sup> | $- | $- |

---

(1) The
 amount of offering proceeds to us presented in this table does not give effect to any exercise of the over-allotment option (if any)
 we have granted to the underwriter as described below.

Pursuant to a separate resale prospectus included in the registration statement of which this prospectus forms a part, we are also registering 20,621,250 shares of common stock for resale by certain selling stockholders. No resales of the common stock covered by this prospectus shall occur until the closing of our primary underwritten offering. Once the primary offering is completed, the selling stockholders may sell their shares from time to time at the market price prevailing at the time of offer and sale, or at prices related to such prevailing market prices or in negotiated transactions or a combination of such methods. Please see "<u>Risk Factors— Risks Relating to this Offering and our Reverse Stock-Split</u>" for certain risks associated with having two offerings.

The underwriter expects to deliver the securities against payment to the investors in this offering on or about [\*], 2025.

---

| |
|:---|
| Sole Book-Running Manager |
| **D. Boral Capital** |

---

&nbsp;&nbsp;&nbsp;&nbsp;The date of this prospectus is September [\*], 2025.

**TABLE OF CONTENTS**

---

| | |
|:---|:---|
| [ABOUT THIS PROSPECTUS](#a_001) | 1 |
| [INDUSTRY AND MARKET DATA](#a_002) | 1 |
| [TRADEMARKS](#a_003) | 1 |
| [CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS](#a_004) | 2 |
| [PROSPECTUS SUMMARY](#a_005) | 3 |
| [RISK FACTORS](#a_007) | 31 |
| [USE OF PROCEEDS](#a_008) | 71 |
| [CAPITALIZATION](#a_008) | 72 |
| [MARKET FOR OUR COMMON STOCK](#a_022) | 73 |
| [DILUTION](#a_024) | 73 |
| [DESCRIPTION OF THE BUSINESS](#a_115) | 74 |
| [MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](#a_009) | 92 |
| [MANAGEMENT AND BOARD OF DIRECTORS](#a_010) | 105 |
| [EXECUTIVE AND DIRECTOR COMPENSATION](#a_011) | 109 |
| [SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT](#a_116) | 111 |
| [CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS](#a_025) | 112 |
| [DESCRIPTION OF CAPITAL STOCK](#a_012) | 113 |
| [UNDERWRITING](#a_013) | 117 |
| [EXPERTS](#a_015) | 124 |
| [LEGAL MATTERS](#a_016) | 124 |
| [WHERE YOU CAN FIND MORE INFORMATION](#a_018) | 124 |
| [INDEX TO FINANCIAL STATEMENTS](#a_117) | F-1 |

---

i

**ABOUT THIS PROSPECTUS**

This prospectus constitutes a part of a registration statement on Form S-1 (together with all amendments and exhibits thereto, the "Registration Statement") filed by us with the Securities and Exchange Commission ("SEC") under the Securities Act of 1933, as amended (the "Securities Act"). As permitted by the rules and regulations of the SEC, this prospectus omits certain information contained in the Registration Statement, and reference is made to the Registration Statement and related exhibits for further information with respect to FAVO and the securities offered hereby. With regard to any statements contained herein concerning the provisions of any document filed as an exhibit to the Registration Statement or otherwise filed with the SEC, in each instance reference is made to the copy of such document so filed. Each such statement is qualified in its entirety by such reference.

You should rely only on information contained in this prospectus. We have not, and the underwriter has not, authorized anyone to provide you with additional information or information different from that contained in this prospectus. Neither the delivery of this prospectus nor the sale of our securities means that the information contained in this prospectus is correct after the date of this prospectus. This prospectus is not an offer to sell or the solicitation of an offer to buy our securities in any circumstances under which the offer or solicitation is unlawful or in any state or other jurisdiction where the offer is not permitted.

For investors outside the United States: Neither we nor the underwriter have taken any action that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the securities covered hereby and the distribution of this prospectus outside of the United States.

The information in this prospectus is accurate only as of the date on the front cover of this prospectus. Our business, financial condition, results of operations and prospects may have changed since those dates.

No person is authorized in connection with this prospectus to give any information or to make any representations about us, the securities offered hereby, or any matter discussed in this prospectus, other than the information and representations contained in this prospectus. If any other information or representation is given or made, such information or representation may not be relied upon as having been authorized by us.

Neither we nor the underwriter have done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than the United States. You are required to inform yourself about, and to observe any restrictions relating to, this offering and the distribution of this prospectus.

**INDUSTRY AND MARKET DATA**

We are responsible for the disclosure in this Prospectus. However, this Prospectus includes industry data that we obtained from internal surveys, market research, and publicly available information and industry publications. The market research, publicly available information and industry publications that we use generally state that the information contained therein has been obtained from sources believed to be reliable. The information therein represents the most recently available data from the relevant sources and publications, and we believe remains reliable. We did not fund and are not otherwise affiliated with any of the sources cited in this Prospectus. Forward-looking information obtained from these sources is subject to the same qualifications and additional uncertainties regarding the other forward-looking statements in this Prospectus.

**TRADEMARKS**

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

[**Table of Contents**](#toc)

**CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION**

Certain statements contained in this prospectus may contain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements include, but are not limited to, statements regarding our Company and management's expectations, hopes, beliefs, intentions, or strategies regarding the future, including our financial condition and results of operations. In addition, any statements that refer to projections, forecasts, or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words "anticipates," "believes," "continue," "could," "estimates," "expects," "intends," "may," "might," "plans," "possible," "potential," "predicts," "projects," "seeks," "should," "will," "would" and similar expressions, or the negatives of such terms, may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.

Forward-looking statements are subject to significant risks and uncertainties. Investors are cautioned against placing undue reliance on such statements. Actual results may differ materially from those set forth in the forward-looking statements. Other important factors that we think could cause our actual results to differ materially from expected results are summarized below. Other factors besides those listed could also adversely affect us. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

Statements regarding the following subjects, among others, may be forward-looking:

• negative
 impacts from a continued spread of COVID-19, including on the U.S. or global economy or on our business, financial position, or results
 of operations;

• market
 trends in our industry, energy markets, commodity prices, interest rates, the debt and lending markets, or the general economy;

• our
 plans and expectations regarding future financial results, expected operating results;

• the
 sufficiency of our cash and our liquidity;

• development
 of new financial products and improvements to our existing financial products;

• the
 adequacy of our agreements with our syndicate partners;

• our
 ability to obtain financing, our ability to comply with debt covenants or cure any defaults;

• actions
 and initiatives of federal, state and local governments and changes to federal, state and local government policies, regulations,
 tax laws and rates and the execution and impact of these actions, initiatives and policies;

• our
 ability to obtain and maintain financing arrangements on favorable terms;

• general
 volatility of the securities markets in which we participate;

• the
 impact of weather conditions, natural disasters, accidents or equipment failures, or other events that disrupt our operations or
 negatively impact the value of our assets;

• availability
 of and our ability to attract and retain qualified personnel; and

• our
 understanding of our competition.

[**Table of Contents**](#toc)

Forward-looking statements are based on beliefs, assumptions and expectations as of the date of this prospectus. Any forward-looking statement speaks only as of the date on which it is made. New risks and uncertainties arise over time, and it is not possible for us to predict those events or how they may affect us. Except as required by law, we are not obligated to, and do not intend to, update or revise any forward-looking statements after the date of this prospectus, whether as a result of new information, future events or otherwise.

The risks included here are not exhaustive. Other sections of this registration statement may include additional factors that could adversely affect our business and financial performance. Moreover, we operate in a very competitive and rapidly changing environment. New risk factors emerge from time to time, and it is not possible for management to predict all such risk factors, nor can it assess the impact of all such risk factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results.

**PROSPECTUS SUMMARY**

*This summary highlights information contained elsewhere in this prospectus. Because this is only a summary, it does not contain all of the information that may be important to you. You should read this entire prospectus and should consider, among other things, the matters set forth under "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and related notes thereto appearing elsewhere in this prospectus, and the exhibits to the registration statement of which this prospectus is a part before making your investment decision. This prospectus contains forward-looking statements and information relating to FAVO. See "Cautionary Note Regarding Forward-Looking Statements" above.*

 

*In this Prospectus, the terms "FAVO," the "Company," "we," "us," "our" or "ours" refer to Favo Capital, Inc. and its wholly owned subsidiaries.*

**Company Overview**

We are a diversified financial services company with two complementary business platforms: Private Credit and Real Estate. Our strategy is to provide alternative financing solutions to small and medium-sized businesses (SMBs) underserved by traditional lenders, while also building a portfolio of income-producing and value-enhancing real estate assets. Together, these businesses are designed to broaden our revenue base, strengthen the balance sheet with tangible assets, and support long-term, capital-efficient growth.

The Private Credit Division provides revenue-based funding and related financing products to SMBs nationwide. Since 2020, we have originated more than $153 million in funding and supported over 10,000 businesses across the United States. The Real Estate Division, launched in 2025, targets strategic investments in residential, mixed-use, and commercial properties designed to generate stable rental income and have the potential for long-term value appreciation. These real estate holdings improve our overall capital efficiency by anchoring the balance sheet with durable, income-producing assets, lowering our blended cost of capital, and providing recurring cash flows that enhance liquidity management.

While each division operates independently, they are designed to complement one another. The real estate business provides steady, long-term income and strengthens overall financial stability, while the private credit business offers faster-turnover funding with attractive near-term returns. Together, they create a balanced model in which real estate adds stability and efficiency, while private credit drives growth.

 **Private Credit Overview**

Our Private Credit Division provides alternative financing solutions to SMBs across the United States. The core of our business is the origination and funding of merchant cash advances (MCAs), both directly and through syndication arrangements with our partners. These MCA activities represent our principal line of business and generate the substantial majority of our revenues.

Since 2020, we have originated over $153 million in capital and supported more than 10,000 SMBs nationwide. We are headquartered in Fort Lauderdale, Florida, with operations in New York and the Dominican Republic. In addition to our MCA business, we occasionally act as a broker for other funders, earning commissions when SMB customers we refer obtain financial products such as MCA or lines of credit. These brokerage activities are ancillary to our MCA operations and represent a smaller portion of our business.

[**Table of Contents**](#toc)

Our MCA business is conducted through operating subsidiaries that sit under our private credit holding company. These subsidiaries include FAVO Funding LLC, Honeycomb LLC, and Fore Funding LLC, which originate and service MCA transactions. Our brokerage activities, which consist of referring merchants to third-party funders and earning commissions, are conducted through Fore Funding LLC and DBOSS Funding LLC, also held within the same private credit platform.

 **Merchant Cash Advances**

Merchant cash advances ("MCAs") have evolved as an alternative capital source primarily for small businesses, and they represent the principal product we currently originate and fund. In our MCA transactions, a merchant sells a portion of its future receipts to us at a discount in exchange for an upfront lump-sum payment. The merchant then remits a specified percentage of its sales receipts, typically through daily Automated Clearing House ("ACH") transfers, until we have received the full amount of purchased receipts.

Unlike loans or securities, MCAs are structured as purchases and sales of future receipts and the assignment of related rights. Our small and medium-sized business ("SMB") customers typically use these advances for working capital, such as inventory purchases, equipment financing, or other immediate business needs.

While MCAs represent the substantial majority of our revenues today, we also generate brokerage income on a limited basis by referring merchants to third-party funders for products such as MCAs and lines of credit. These brokerage activities account for a smaller share of our business relative to our directly originated and syndicated MCA portfolios.

We operate a direct and syndication revenue-based funding platform to serve SMBs in need of liquidity to fulfill their financial responsibilities. Through our direct sales, marketing, underwriting, and operational platform, and in collaboration with our six primary Syndication Partners, each of which operates in the same revenue-based financing business as FAVO Capital, we provide funding solutions for customers. These syndication arrangements allow us to participate in a percentage of approved transactions, with participation amounts ranging from 10% to 95% of the deal value. Pursuant to Master Participation Agreements and related agreements, FAVO Capital not only originates and funds transactions but also provides servicing and collection services on behalf of itself and its Syndication Partners. This structure enables us to diversify risk, leverage partner deal flow, and expand the scale of our funding platform while maintaining consistency with our underwriting criteria.

We originate and provide revenue-based financing to businesses primarily through MCAs. We provide convenient, fully automated financial solutions to our customers. An SMB customer who enters into an MCA commits to delivering a percentage of its receipts through ACH or wire debits or by splitting credit card receipts until all purchased receipts are remitted to us.

We believe traditional lenders face a number of challenges and limitations that make it difficult to address the capital needs of SMBs, such as:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ▪ *Organizational and Structural Challenges*. The costly combination of physical branches and manually intensive underwriting procedures makes it difficult for traditional lenders to efficiently serve SMBs. They also serve a broad set of customers, including both consumers and enterprises, and are not solely focused on addressing the needs of SMBs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ▪ *Technology Limitations*. Many traditional lenders use legacy or third-party systems that are difficult to integrate or adapt to the shifting needs of small businesses. These technology limitations make it challenging for traditional lenders to aggregate new data sources, leverage advanced analytics and streamline and automate credit decisions and funding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ▪ *Products not Designed for SMBs*. SMBs are not well served by traditional loan products. We believe that traditional lenders often offer products characterized by larger loan sizes, longer durations and rigid collateral requirements. By contrast, SMBs often seek small loans for short-term investments.

[**Table of Contents**](#toc)

As a result, we believe that SMBs feel underserved by traditional lenders. Our solution was built specifically to address SMBs' capital needs. We offer products to SMBs to enable them to access capital. We facilitate eligible merchants to secure cash advances and accelerate the growth of their business by providing access to simple, fast, and convenient working capital under MCAs. This structure has some advantages over the structure of a conventional loan. Most importantly, payments towards an MCA can be modified for hardships suffered by a business, giving the merchant greater flexibility with which to manage their cash flow, particularly during an unforeseen event. MCAs are processed much faster than a typical loan, giving borrowers quicker access to capital.

 **Direct and Syndicated Funding**

A key challenge in the merchant cash advance industry is securing sufficient capital to meet strong demand from small businesses. We address this challenge through two complementary channels: (i) direct funding, where we originate, underwrite, fund, and service MCAs on our own balance sheet, and (ii) syndicated funding, where we participate alongside six established syndication partners under Master Participation Agreements. Syndication participation levels generally range from 10% to 95% of each transaction, subject to our investment guidelines.

Our direct portfolio consists of MCAs that we originate and service end-to-end, allowing us to capture full economics, including origination and administrative fees. By contrast, syndicated transactions are originated by our partners, with our participation aligned to our underwriting standards. To manage risk, we actively monitor exposures and do not participate in any syndication arrangement where our share would exceed 40% of a partner's total portfolio.

We generate revenues from both models: (i) factor rate returns, origination, and administrative fees on our direct portfolio, and (ii) participations in syndicated transactions, supplemented by servicing and collection fees earned on receivables we manage on behalf of partners. This approach balances higher-margin direct fundings with the capital efficiency and risk diversification benefits of syndication. The table below outlines key differences between the two models.

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| | | |
|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Aspect** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Direct Funding** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Syndicated Funding** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Definition* | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; A single funder provides the entire merchant cash advance directly. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Multiple funders co-fund a single MCA through a syndication structure. |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Revenue Model* | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Factor-rate revenues accrue entirely to the direct funder. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Revenues are shared pro rata among participants; the lead funder typically earns servicing fees and profit allocations. |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Capital Deployment* | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Fully funded from the company's own capital. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Capital is pooled from several investors, enabling larger transactions. |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Risk Exposure* | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 100% of performance risk rests with the direct funder. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Risk is distributed among participants, limiting exposure for any one investor. |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Underwriting* | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Relies solely on the funder's internal, AI-enabled data-driven underwriting process. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The lead funder applies its underwriting and servicing standards to all participants' portions. |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Funding Scale* | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Constrained by the funder's available reserves. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Greater capacity to fund larger or multiple deals through pooled participation (e.g., 10%–95% of deal size). |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Administration* | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Originator manages servicing, collections, and remittances directly. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The lead funder administers servicing and distributes proceeds to syndicate participants under Master Participation Agreements. |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Economic Participation* | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; All returns (and losses) accrue to the originator. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Returns are distributed according to participation levels; lead funder receives priority servicing fees. |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Speed of Execution* | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Often faster, with fewer parties involved. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; May require additional coordination but leverages partner networks for deal flow. |

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 **Direct vs. Syndicated Funding Structures**

In direct fundings, the merchant enters into a bilateral purchase and sale agreement with a single funder. The funder advances its own capital, bears all risk of non-performance, and retains all revenue, including origination fees, administrative fees, and MCA income. The agreement is relatively straightforward, with no third-party stakeholders.

By contrast, syndicated fundings involve multiple parties: the merchant, a lead funder, and syndicate participants (investors or co-funders). The merchant contract is executed with the lead funder, while the syndicate participants enter into a Master Participation Agreement (and, where applicable, Independent Sales Organization agreements) governing their respective rights and obligations. These agreements outline servicing authority, profit-sharing mechanics, and the allocation of risk among participants. Syndicated contracts are inherently more complex than direct fundings, as amendments or enforcement actions require coordination among multiple parties.

In direct fundings, the funder provides the entire advance from its own capital and assumes 100% of the exposure. In syndicated fundings, the lead funder may contribute a portion (e.g., 60%) while syndicate partners contribute the balance (e.g., 40%). Losses are borne pro rata, and syndicate participants typically have limited recourse against the lead funder, except in cases of mismanagement or breach of fiduciary duty. Most syndicated MCAs are structured as non-recourse transactions, meaning the risk of merchant non-performance is shared collectively across all participants.

Syndicated transactions may also carry additional costs, such as platform fees charged by syndication partners (generally 3%–5% of remittances), and administrative costs associated with servicing multiple stakeholders. These fees can increase the effective cost of capital relative to direct fundings.

For direct fundings, our revenue includes origination fees, administrative fees, MCA income, and ancillary fees (e.g., non-sufficient funds, collections, Uniform Commercial Code filings), all recognized over the contract term as payments are received.

For syndicated fundings, we do not typically retain origination or administrative fees. Instead, our revenue is derived from:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • our proportionate share of MCA income

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • servicing and collection fees earned as lead funder and servicer, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • rebates from syndication partners, based on portfolio size and volume.

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| | | | |
|:---|:---|:---|:---|
| &nbsp;&nbsp; Year <br>| &nbsp;&nbsp; Direct Funding | &nbsp;&nbsp; Syndicated Funding <br>| &nbsp;&nbsp; Total Funding <br>|
| &nbsp;&nbsp; 2023 | &nbsp;&nbsp; $17284157 | &nbsp;&nbsp; $17351122 | &nbsp;&nbsp; $34635279 |
| &nbsp;&nbsp; 2024 | &nbsp;&nbsp; $12997355 | &nbsp;&nbsp; $18025300 | &nbsp;&nbsp; $31022655 |
| &nbsp;&nbsp; YTD Q2 2025 | &nbsp;&nbsp; $5859035 | &nbsp;&nbsp; $9785698 | &nbsp;&nbsp; $15644733 |

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Our direct funding portfolio has SMBs across multiple segments and industry types, but most of our merchants fall into the services, construction, and retail industries. These include restaurants, construction and development projects, physical fitness facilities, accounting and bookkeeping practices, home furnishings and equipment stores, and automotive repair shops, among others.

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The composition of our syndication portfolio closely aligns with that of our direct investments, both of which are strategically shaped by evolving market dynamics. Key determinants include macroeconomic conditions, the influence of domestic and international government policy decisions, and the relative advantages of specific U.S. geographic regions. Regulatory and policy environments, whether supportive or restrictive, impact sector performance and are carefully considered in our portfolio construction and allocation strategy.

Although syndication currently represents a larger share of total funding volume, our strategic priority is to expand direct funding given its higher margin profile and greater control over underwriting and servicing economics. The Simplified Acquisition was undertaken specifically to increase our capacity for direct originations. Over time, we expect direct funding to comprise a greater portion of total originations, with syndication continuing to play a complementary role in providing capital efficiency and risk diversification.

 ***MCA – Syndication Partners***

We identify leading funders in the industry through market research, funding forums, the Revenue Based Funding Coalition (RBFC), and long-term business relationships, all of which have established underwriting and operational capabilities that allow partners to participate in their deal flow. The RBFC includes funders, brokers, Independent Sales Organizations, and industry vendors that provide technology and operational services to the sector. It was established to educate policymakers and regulators on issues affecting the non-bank commercial finance industry and to support responsible growth of revenue-based financing. At the same time, the MCA industry remains subject to ongoing regulatory scrutiny at both the federal and state levels, and participation in industry groups such as the RBFC reflects our effort to stay aligned with evolving standards and compliance expectations.

We currently maintain relationships with six syndication partners, three core partners and three secondary partners, all of whom operate in the Merchant Cash Advance industry and provide revenue-based financing solutions. From time to time, we syndicate on various deals that our partners have approved for funding, with syndication participation amounts typically ranging from 10% to 95% of the transaction value. These arrangements are governed by Master Participation Agreements and Independent Sales Organization agreements, which establish the terms of engagement and responsibilities of each party.

As part of these syndication arrangements, FAVO Capital originates, funds, and services transactions, including collections, both for its own account and on behalf of its syndication partners. To manage concentration risk, we do not participate in any syndication arrangement where our exposure exceeds 40% of a partner's total portfolio. We also actively manage participation amounts to ensure diversification and maintain a balanced portfolio mix. All syndication partners are provided with investment guidelines aligned with our internal underwriting standards, and they are required to adhere to those criteria, ensuring consistency and risk alignment across all investments. This framework enables FAVO to leverage the scale and capabilities of its partners to expand access to funding for SMBs while maintaining rigorous risk management discipline.

 **Brokered Products**

In addition to our direct and syndicated MCA operations, we act as an intermediary in brokering financial products, earning commissions from funders when transactions close. Within this category, merchant cash advances and lines of credit are the meaningful contributors, while equipment financing and business term loans comprised the balance. Our activity in U.S. Small Business Administration (SBA) loans and invoice factoring was not material during the reporting period, though these products remain available as part of our platform and may contribute to revenues in the future as merchant demand evolves.

Our role in these transactions is limited to acting as an intermediary: we identify merchants with financing needs, match them with appropriate funders, and earn referral or brokerage fees, typically calculated as a percentage of the funded amount, once the transaction is completed. We do not originate or fund these products directly and do not assume credit risk on the underlying obligations.

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This brokerage activity complements our MCA operations by broadening merchant relationships and creating repeat commission opportunities. Applications are sourced through marketing initiatives, including online advertising, outbound calling, trade show participation, and referrals, with additional support from a call center located in the Dominican Republic. We maintain relationships with a network of funding sources, such as commercial banks, online lenders, SBA-approved institutions, and factoring companies.

Once a funder approves and funds a transaction, our role is complete, and we earn compensation directly from the funder, typically built into the financing cost. By offering MCAs and lines of credit through third-party partners alongside our direct activities, we diversify our revenue streams and expand our reach, while continuing to maintain our primary focus on revenue-based funding solutions.

While brokerage commissions represented approximately 20% of our total revenues for the year ended December 31, 2024, we do not view this segment as a core growth driver. We position brokerage primarily as a complementary offering that broadens merchant relationships, rather than as a business line we intend to scale.

 ***MCA - Cost of Sales***

We incur sales commissions costs for direct and syndicated originations. Commission expense is recognized over the term of the deal. Additionally, we incur marketing expenses associated with direct MCA originations. Marketing expenses consist of various lead generation, internet, phone, advertising, and other costs associated with new account originations. Marketing expenses are recognized as incurred.

 ***MCA Platform and Service Fees***

For each Syndicated MCA origination, we are charged a platform or servicing fee. The fee is calculated as a percentage of the advance receipt collected on our behalf and is deducted from the amount disbursed.

  ****

 ***MCA Credit Losses***

Under the current expected credit loss (CECL) model of ASC 326, we recognize an allowance for a portion of the receipts at the time of concluding a deal and additional allowances based on the amount of time since a payment was last received and whether the receivable has been handed over to collections. The approach is based on the Company's internal knowledge and historical default rates over the expected life of the receipts and is adjusted to reflect current economic conditions. This evaluation takes into account the customer's ability and intention to pay the consideration when it is due along with incorporating changes in the forward-looking estimates. If the expected financial condition of the Company's customers were to improve, the allowances may be reduced accordingly.

 **Underwriting Process and Credit Assessment of Merchant Customers** 

Our underwriting process is central to both our direct MCA portfolio and our syndicated funding activities. Each merchant applicant is evaluated using a structured combination of automated data analysis, artificial intelligence (AI), and human review to assess the business's ability to generate consistent receivables and meet repayment obligations.

We apply a multi-step framework designed to filter out higher-risk applicants and identify merchants most likely to perform, with fewer than 5% of applications proceeding to funding. This process integrates anomaly detection and fraud-prevention tools with professional underwriter judgment, allowing us to evaluate applications efficiently while maintaining credit discipline. Over time, this selective approach has resulted in portfolio performance with loss and default levels consistent with the high thresholds established by our underwriting standards.

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 ***Integration of Artificial Intelligence and Automation***

We employ a combination of automation, machine learning, and human oversight within our underwriting process. These tools help authenticate documents, identify inconsistencies, and structure raw data into decision-ready formats. Human underwriters remain responsible for final approvals, ensuring that technology outputs are reviewed within a controlled decision framework.

AI-driven capabilities are applied within secure, compliance-oriented environments. All merchant data is collected with applicant consent, either through direct submissions (e.g., bank statements, tax filings, credit reports) or third-party data-aggregation providers. Data is handled under encryption and access-controlled systems. We do not disclose, sell, or repurpose merchant data for non-underwriting uses.

Key capabilities include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • **Document authentication and fraud detection**: Identifying tampering or inconsistencies in submitted records.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • **Anomaly detection**: Flagging unusual cash-flow activity or mismatches in bank transaction data.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • **Automated structuring**: Converting bank statements and financial documents into standardized data for review.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • **Risk scoring**: Predictive models that compare applicants against internal credit parameters.

Applications flagged by automation are escalated for manual review. This blended model allows for efficient processing while maintaining oversight and compliance.

 ***Data Collection and Analysis***

We collect a range of information from merchants during the application process, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Traditional credit bureau data (e.g., consumer and commercial credit histories).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Government and legal records (e.g., state filings, tax records, liens, judgments).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Behavioral and transactional data (e.g., bank activity, repayment patterns, landlord feedback).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Digital presence and reputation data (e.g., online visibility, reviews, social media).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Network-shared performance data from other funders on defaults or fraud.

Because small businesses lack a standardized credit score equivalent to consumer FICO ratings, we supplement bureau data with these alternative sources. Greater emphasis is placed on demonstrated business performance, cash-flow resilience, and repayment history than on an owner's personal credit profile.

Below is a description of our underwriting process for applicant merchants, with four steps to completion.

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| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1. Initial Screening <br>✔ Verify document integrity and application completeness. <br> ✔ Apply automatic decline rules (e.g., prohibited industries, prior defaults, negative banking history). <br> ✔ Use anomaly-detection tools to flag inconsistencies in financial submissions. <br> ✔ Confirm business legitimacy through entity verification and basic fraud checks. <br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2. Full Underwriting <br>✔ Analyze business expenses, legal compliance, and online presence. <br> ✔ Review historical bank statements and repayment trends. <br> ✔ Assess revenue concentration, seasonality, and debt obligations. <br> ✔ Supplement automated scoring with underwriter review. <br> ✔ Price transactions according to internal risk models and repayment capacity. <br>|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3. Approval <br>✔ Transactions are escalated based on size and risk profile: <br> ✔ Up to $35,000: approved by senior underwriters. <br> ✔ $35,000 – $100,000: requires underwriting committee approval.✔ Above $100,000: reviewed by the CFO and requires final approval from the CEO. <br> ✔ Decisions incorporate both model outputs and manual judgment. <br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4. Final Verification and Funding <br>✔ Conduct background checks for legal and financial risks. <br> ✔ Re-verify revenue consistency using most recent bank data. <br> ✔ Confirm terms with a recorded verification call. <br> ✔ Wire transfers are executed by the CFO or Credit Controller, subject to executive authorization.  |

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 ***Efficiency and Risk Considerations***

Our process is designed to be more efficient than traditional bank lending, generally allowing approvals and funding within 24–72 hours versus weeks for banks. Efficiency is achieved through automated data aggregation, AI-driven anomaly detection, and human oversight.

We depend on third-party providers for certain inputs, such as bank-statement verification, credit bureau data, and fraud detection. Disruptions in these services could affect our ability to process applications efficiently, as described in our risk factors.

Over time, we believe that this disciplined, technology-enhanced underwriting process has contributed to portfolio performance consistent with our selective funding standards, supporting stable cash flows and risk-adjusted returns.

 **Real Estate Overview**

Our Real Estate Division, launched in 2025, focuses on acquiring and managing income-producing properties that complement our private credit platform. We target residential, mixed-use, and commercial assets in strategic U.S. markets that provide stable cash flows and have the potential for long-term value appreciation.

The division emphasizes stabilized, cash-flowing properties that diversify revenue streams and strengthen the Company's overall asset base with tangible collateral. By anchoring the balance sheet in real estate, we enhance institutional creditworthiness, improve access to competitively priced financing, and support capital efficiency. These investments are conducted through wholly owned subsidiaries dedicated to property acquisition and management, with the objective of broadening our revenue base and supporting sustainable long-term growth.

 **Strategic Role of the Real Estate Division**

The Real Estate Division plays a complementary role to our MCA and broader private credit operations. Tangible, income-generating real estate assets enhance the depth and quality of our balance sheet, which broadens the collateral base available for institutional financing arrangements and supports access to lower-cost capital. This stronger asset position improves lender confidence and provides flexibility in structuring credit facilities, ultimately enhancing net yields across our MCA originations and related credit activities.

In addition, recurring income from rental streams and condominium sales provides supplemental cash flow that offsets variability inherent in the MCA portfolio. Over time, appreciation in property values may further enhance shareholder value through refinancing or selective asset sales, though the division's primary role is to improve capital efficiency and financial resilience rather than to serve as a direct source of short-term liquidity.

By combining the steady, asset-backed stability of real estate with the faster turnover and scalability of private credit, the Company aims to create a balanced model that enhances credit quality, reduces overall cost of capital, and supports sustainable growth across both business segments.

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 **Target Acquisition Strategy**

Our real estate division is focused on acquiring well-located, income-producing properties at attractive entry prices relative to replacement cost or market comparables. We target assets in the US that have strong underlying fundamentals and sustained tenant demand, seeking opportunities where operational, leasing, or capital structure enhancements can drive value creation. Our acquisition approach is disciplined and data-driven, evaluating both current income potential and future upside through repositioning or improved capital deployment.

Acquisitions are guided by defined financial criteria. We generally target properties expected to deliver internal rates of return (IRR) and capitalization rate spreads that are accretive to our weighted average cost of capital (WACC). We also consider loan-to-value (LTV) thresholds, projected funds from operations (FFO) contribution, and the stability of expected cash flows in assessing each opportunity. This framework provides consistency in evaluating potential transactions and ensures that capital is allocated with the objective of balancing risk, return, and liquidity.

Value creation is achieved through two primary models:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • **Rental Model**: We focus on maintaining high occupancy levels, capturing market rent growth, controlling operating expenses, and implementing targeted capital improvements to enhance tenant experience and asset performance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • **Condominium Model:** Where applicable, we seek to optimize unit pricing, manage sales velocity, and implement focused marketing campaigns to maximize sales proceeds. While condominium projects may involve higher development and redevelopment costs relative to stabilized rental assets, we evaluate them within a disciplined financial framework that considers expected absorption rates, pricing sensitivity, and project-level return thresholds. Our intent is to maintain a balanced mix, with stabilized rental assets representing the core of the portfolio and condominium projects pursued selectively where market demand and projected returns justify the added risk. In condominium transactions, we also assess occupancy and absorption targets as key performance indicators to ensure that projected timelines and sales velocity align with overall capital allocation discipline.

 **Exit Strategies** 

We evaluate multiple exit strategies for each asset at the time of acquisition and throughout the hold period, with the objective of maximizing total return and maintaining flexibility in capital deployment. Our primary strategy is a long-term hold, whereby properties are retained to generate recurring rental income and potential capital appreciation. This approach supports predictable cash flows and strengthens the balance sheet, which in turn improves the Company's overall capital efficiency and weighted average cost of capital (WACC).

Where market conditions, interest rate environments, or asset performance create favorable opportunities, we may pursue a sale, refinancing, or recapitalization to optimize return on invested capital (ROIC). These decisions are guided by disciplined financial criteria, including expected yields, debt costs, and projected cash-on-cash returns, rather than reliance on asset sales for short-term liquidity. Potential strategies may include selling an asset outright, entering into a joint venture with new capital partners, or refinancing to unlock equity while retaining ownership.

For condominium projects, we may implement a phased sell-down strategy to optimize pricing and absorption rates while managing supply risk. Select units may be retained within the rental portfolio to generate ongoing income and preserve long-term optionality. Across all property types, our exit planning is structured to align with long-term capital allocation discipline, balancing current income generation with capital recycling into higher-yielding opportunities.

 **Leasing & Sales** 

We employ a disciplined, market-responsive approach to both leasing and sales activities, designed to optimize occupancy, rental yields, and asset value across its portfolio. For rental assets, lease structures may include fixed-term agreements, percentage-based leases tied to tenant sales performance, or hybrid models that combine base rent with variable components. Renewal options are strategically incorporated to enhance tenant retention, minimize downtime, and maintain consistent revenue streams. Lease terms are negotiated to align with market demand, asset positioning, and long-term strategic objectives, while protecting downside risk through creditworthy tenant selection and appropriate security provisions.

For assets operated under a condominium sales model, we implement a phased release strategy to manage market absorption and achieve optimal pricing. Units are brought to market in stages, allowing us to respond dynamically to buyer demand, interest rate conditions, and competitive supply. This approach is supported by targeted marketing campaigns, pre-sale strategies, and selective retention of certain units for ongoing rental income or future disposition. By maintaining flexibility in leasing and sales strategies, we seek to balance predictable cash flows with opportunities for potential capital appreciation and value realization.

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 **Property Management** 

Our property management practices are designed to preserve and enhance asset value while ensuring the operational integrity of our real estate portfolio. Currently, properties are managed by experienced third-party firms engaged under agreements that include defined performance benchmarks addressing occupancy levels, tenant retention, service quality, and cost efficiency.

Management activities focus on timely and responsive tenant service, preventative maintenance programs to extend the useful life of building systems and improvements, and disciplined control of operating expenses. Performance is monitored on an ongoing basis, with operational adjustments implemented as necessary to maintain market competitiveness, mitigate vacancy risk, and support stable long-term income generation.

 **Performance Monitoring** 

We employ a structured, data-driven approach to monitoring the performance of our real estate assets to ensure they meet targeted financial and operational benchmarks. Key performance indicators include occupancy levels, net operating income (NOI), lease expiration schedules, rent collection trends, and, for condominium projects, sales velocity and absorption rates. These metrics are reviewed regularly at both the property and portfolio levels, enabling management to identify trends, risks, and opportunities in real time.

Insights derived from this monitoring process inform tactical and strategic decisions, including adjustments to marketing campaigns, leasing incentives, and tenant mix optimization. In addition, capital expenditure priorities are continuously reassessed to ensure that property improvements deliver measurable returns and align with evolving market conditions. This active management framework is intended to maintain asset competitiveness, maximize revenue, and preserve long-term value.

 **1818 Park**

 **Overview** 

On July 11, 2025, we entered into multi-entity member interest purchase agreements to acquire 1818 Park, a 281,493-square-foot mixed-use property located in Hollywood, Florida. The asset comprises approximately 237,173 square feet of residential space, 19,737 square feet of commercial space, 16,800 square feet of parking facilities, 5,171 square feet of office space, and 2,612 square feet of storage. The residential component includes 273 rental units in a mix of studios, one-bedroom, two-bedroom, and three-bedroom layouts, of which two are penthouse residences, the largest of which spans 2,319 square feet. The commercial component features a diversified tenant mix including a national bank branch, a hair salon, multiple food and beverage operators, and a 12,000-square-foot food hall. The office component includes one 4,113-square-foot office currently under development and nearing completion. As of August 1, 2025, occupancy was approximately 93%, supported by an established tenant base.

The acquisition of 1818 Park aligns closely with our real estate division's acquisition criteria. The property was secured at a favorable price relative to replacement cost and market comparables, in a location (Young Circle) characterized by strong population growth, robust tenant demand, and ongoing economic investment. The asset's diversified mix of residential, commercial, and food hall space provides multiple income streams and diversification benefits that reduce reliance on any single segment.

Operationally, we intend to pursue initiatives aimed at enhancing occupancy, optimizing lease terms, and implementing targeted capital improvements to support rental growth and tenant retention. In addition, we are evaluating potential refinancing options with respect to the existing Blackstone senior mortgage loan. Any such refinancing, if achieved, may reduce the interest burden and improve the relationship between operating cash flows and debt service requirements. There can be no assurance, however, that such refinancing will be completed on favorable terms, or at all. These initiatives, together with the property's established tenant base and location within a growth corridor, are expected to strengthen the property's long-term positioning, while also addressing current cash flow challenges.

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 **Purchase Price and Consideration** 

On July 11, 2025, we completed the acquisition of the 1818 Park property in Hollywood, Florida through a multi-entity transaction structured as follows:

• Block 40 Managers, LLC – Acquired 100% of the membership interests in the property management
 company responsible for day-to-day operations, tenant services, and facility oversight.

• Block 40 Investment Holdings, LLC – Acquired 100% of the membership interests in the investment
 holding entity, which owns certain contractual rights and interests related to 1818 Park.

• Block 40, LLC – Acquired 100% of the membership interests in the investment holding entity, which
 holds all assets and certain liabilities of the primary property-owning entity, including the real estate, fixtures, and contracts,
 as well as the existing Blackstone secured mortgage debt and other obligations.

The total purchase price was $190 million, structured entirely as a stock-for-liabilities transaction. Consideration consisted of the issuance of shares of our common stock to the sellers and the assumption of certain indebtedness and other liabilities.

Issuing equity rather than using cash or additional debt preserved liquidity for our private credit operations and avoided incremental leverage that could restrict future financing flexibility. The structure strengthened our balance sheet by adding a substantial income-generating real estate asset, which enhances the Company's overall capital efficiency, broadens the collateral base considered by institutional lenders, and supports access to more competitively priced financing. By making the seller a shareholder, the transaction further aligns their interests with the Company's long-term performance and value creation, reinforcing management's focus on sustainable growth and shareholder returns.

This multi-entity structure ensured continuity of operations, preserved key contractual rights, and facilitated a seamless transition for tenants, positioning the asset for operational stability and long-term value creation.

 **Acquisition and Financing Structure**

The acquisition of 1818 Park was completed through the purchase of all of the membership interests of Block 40, LLC, the entity that owns the property and its related liabilities. As a result, the Company acquired indirect ownership of the real estate asset together with the obligations tied to it. As part of this transaction, the Company assumed a senior secured mortgage loan originally in the principal amount of $84.0 million. Following scheduled principal repayments in the weeks after closing, the outstanding loan balance will be reduced to approximately $73.6 million by Q3 2025.

On June 1, 2022, Block 40 Property, LLC entered into a senior secured mortgage loan in the original principal amount of $84.0 million with Deutsche Bank, maturing on June 1, 2025. On June 1, 2025, Blackstone, as the new holder of the loan, extended the maturity date by one month. On July 1, 2025, Blackstone further extended the maturity date to June 1, 2026. In connection with the June and July 2025 extensions, the interest rate increased from Term SOFR plus 2.75% to Term SOFR plus 3.00%, and the existing interest rate cap agreement remains in effect. As part of the extension agreements, the borrower was also required to make scheduled principal curtailments, which reduce the outstanding loan balance in line with agreed amortization milestones, to approximately $73.6 million.

The loan is secured by a first-priority mortgage lien on the property, an assignment of leases and rents, and certain reserve and cash accounts, and is generally non-recourse subject to customary carve-outs.

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 ***Key Loan Features***

  ****

• Borrower: Block 40 Property,
 LLC (entity that owns the property and subsidiary of Block 40, LLC)

**•** Original Loan Amount: $84.0 million

**•** Current Balance (post-closing repayments): Approximately
 $73.6 million (expected by Q3 2025)

**•** Lender / Agent: Blackstone (successor to Deutsche
 Bank AG, New York Branch)

**•** Interest Rate: Term SOFR + 3.00% per annum (floating)

**•** Interest Rate Protection: Interest rate cap agreement
 in place to mitigate rate risk

**•** Maturity Date: June 1, 2026

**•** Collateral: First priority mortgage lien on 1818
 Park, assignment of leases and rents, security interest in reserve/cash management accounts, and collateral assignment of the interest
 rate cap

**•** Recourse: Non-recourse except for customary carve-outs
 (fraud, misappropriation, certain covenant breaches)

**•** Guaranty of Carry Costs: Personal guaranties from
 prior owners covering debt service shortfalls, taxes, insurance, and essential operating expenses

 **EB-5 Investor Exchange Offer**

As part of the July 11, 2025 acquisition of the Block 40 Entities and Hollywood Circle Capital, LLC, we assumed the obligations associated with EB-5 investors in Block 40, LLC. These investors held preferred membership interests with accumulating preferred return features that, absent conversion or repurchase, would have continued indefinitely. The total EB-5 preferred membership interests were included in the $190 million purchase price allocation for the transaction.

Following the acquisition on August 28, 2025, we initiated an offer to these EB-5 investors to exchange their preferred membership interests for shares of our common stock. The objective of this exchange is to reduce the long-term accrual burden associated with the EB-5 preferred return structure, simplify the capital structure, and align the interests of these legacy investors with those of our common stockholders. These obligations are specific to the 1818 Park real estate transaction and are structurally distinct from the Company's other preferred return arrangements in its private credit business.

 **Tenant Base** 

The property generates rental income from both residential and commercial tenants, with residential units comprising the majority of leased space and retail, dining, office, and co-working uses contributing additional revenue. The residential portion consists of multiple unit types, with leases generally structured as fixed-term agreements that include renewal options and periodic rent escalations, and occupancy has remained consistently high across a diversified tenant base. The commercial component includes retail, dining, service, and food hall tenants operating under fixed-rent, percentage-of-sales, and hybrid lease structures, with agreements typically providing base rent, renewal rights, and customary landlord protections, while office and co-working areas are also available for lease to professional tenants and are expected to further contribute to revenue diversification as leasing progresses. No individual tenant represents a material portion of the property's total rental revenue, and the tenant base is diversified across residential and commercial categories, reducing concentration risk and limiting reliance on any single tenant or use type.

 ***Strategic Integration with Private Credit Operations***

The inclusion of 1818 Park in our real estate portfolio strengthens our balance sheet by adding a sizable income-producing asset that generates recurring cash flows. While the property is subject to a first-priority mortgage, both its operating performance and equity value may be considered by institutional lenders in evaluating our credit profile, which could enhance our ability to obtain or negotiate credit facilities at more favorable terms.

The property's tenant base is diversified across residential and commercial leases. Longer-term commercial leases provide a stable source of revenue, while the recurring turnover and renewal cycle of residential units creates opportunities to adjust pricing in line with prevailing market conditions. This diversification reduces reliance on any single tenant category and mitigates cash flow volatility.

By integrating income-generating real estate into our capital structure, we aim to improve overall capital efficiency by anchoring our balance sheet with tangible assets, providing supplemental cash flows to offset variability in merchant cash advance performance, and supporting access to competitively priced debt financing. This complementary structure aligns with our broader strategy of balancing the higher-velocity nature of private credit activities with the stability and asset backing provided by long-term real estate holdings.

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 **Revenue Model and Distribution by Offering**

We generate revenue through two primary business lines: (i) merchant cash advances and related financing solutions for small and medium-sized businesses, and (ii) real estate activities, including the sale of condominium units and the leasing of residential and commercial spaces. For each of these offerings, our revenue model is defined by the contractual terms of our agreements, and our ability to reach customers and counterparties is supported by a mix of direct marketing, referral networks, broker relationships, and strategic partnerships. The following provides a detailed description of how we generate revenue, the types of agreements that govern these activities, our distribution methods, and the degree of customer concentration associated with each line of business.

 **Merchant Cash Advances (MCAs)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • **Revenue Model**: We generate revenue from MCAs primarily through factor rates applied to the purchase of future receipts. These receipts are remitted by merchants via daily or weekly automated debits until the purchased amount is satisfied.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • **Related Agreements:** Each MCA is documented by a standardized purchase and sale agreement, which sets forth the advance amount, purchased receipts amount, remittance schedule, and factor rate. In syndicated MCA transactions, we act as servicer under syndication agreements, earning servicing fees, retained participations, and profit allocations. Syndication agreements generally provide that we manage collections and distribute remittances, with servicing compensation paid on a priority basis.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • **Distribution:** Applications are sourced through direct marketing, referrals, industry partnerships, and independent sales organizations (ISOs). ISOs submit merchant applications under broker agreements, which typically provide for referral compensation based on funded amounts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • **Customer Dependence:** Our MCA activities are diversified across a large number of small and medium-sized businesses. We are not dependent on any single merchant or a small group of merchants, and no individual customer accounts for a material portion of our MCA revenues.

 **Real Estate Activities**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • **Revenue Model:** Our real estate strategy contemplates generating revenue from both (i) recurring rental income from residential and commercial leases and (ii) the marketing and sale of condominium units. At present, our revenues are derived exclusively from rental income, which is generated under tenant lease agreements providing for monthly rental payments, security deposits, and customary landlord protections. While the marketing and sale of condominium units remain part of our long-term strategy, no condominium sales have been completed to date, and no revenue has been recognized from condominium transactions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • **Related Agreements:** Leasing revenue is governed by lease agreements that specify rental rates, term lengths, renewal options, and maintenance obligations. In the future, condominium sales will be documented through purchase and sale agreements that define purchase price, deposit requirements, and closing conditions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • **Distribution:** We market rental opportunities through broker networks, digital and traditional advertising campaigns, referral programs, and on-site promotional activities directed at potential tenants. In anticipation of future condominium sales, we also maintain marketing infrastructure that can be extended to prospective buyers. In certain cases, we establish relationships with co-investors and developers through joint ventures or co-investment agreements to support property development and positioning.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • **Customer Dependence:** While real estate revenues are inherently more concentrated by project than our MCA activities, we maintain a diversified base of tenants across properties, which reduces reliance on any single tenant. We are not dependent on any single tenant, buyer, or co-investor for our real estate activities.

 **Distribution**

Our financing solutions are marketed and distributed through both direct channels and independent sales organizations (ISOs). A significant percentage of our MCA deal flow is sourced through ISOs, who submit merchant applications to us under broker agreements. We also acquire customers directly through online marketing, referrals, and industry partnerships. We are not dependent on any single customer or a small group of customers for our financing or real estate activities. Our customer base is diversified across a wide range of merchants, developers, and investment partners, which reduces concentration risk and limits dependence on any individual relationship

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Our real estate activities currently generate revenue solely from the leasing of residential and commercial spaces within our projects. Leasing revenue is supported by marketing efforts directed at potential tenants, which may include broker networks, digital and traditional advertising, referral programs, and on-site promotional campaigns. While our long-term real estate strategy also contemplates revenue from the marketing and sale of condominium units, no such sales have yet occurred. Compared to our MCA distribution network, real estate revenues are more concentrated by project, but we maintain a diversified base of tenants across properties, which reduces reliance on any single party.

**Listing on the Nasdaq Capital Market**

Our common stock is currently quoted on the OTC Pink Market. In connection with this offering, we have applied to list our common stock on the Nasdaq Capital Market ("Nasdaq"). If our listing application is approved, we expect to list our common stock on Nasdaq upon consummation of the offering, at which point our common stock will cease to be traded on the OTC Pink Market. No assurance can be given that our listing application will be approved. This offering will occur only if Nasdaq approves the listing of our common stock. Nasdaq listing requirements include, among other things, a stock price threshold. As a result, prior to effectiveness, we will need to take the necessary steps to meet Nasdaq listing requirements, including but not limited to a reverse split of our outstanding common stock (as further discussed below). If Nasdaq does not approve the listing of our common stock, we will not proceed with this offering. There can be no assurance that our common stock will be listed on Nasdaq.

 **Implications of Being a Controlled Company**

If listed on Nasdaq, we would be a "controlled company" within the meaning of Nasdaq Listing Rule 5615(c) because Vincent Napolitano, Shaun Quin, and Glen Steward (the "Founders"), through a voting agreement governing 10,000,000 shares of Series B Preferred Stock, each with 50 votes per share, collectively control approximately 87% of the voting power of our company.

Upon completion of this Offering, our Founders will have the ability to control the outcome of matters submitted to the shareholders for approval, including the election of directors and any merger, consolidation, or sale of all or substantially all of our assets.

Under the Nasdaq Listing Rules, a company of which more than 50% of the voting power for the election of directors is held by an individual, group, or another company is a "controlled company" and is permitted to elect to rely, and may rely, on certain exemptions from the obligation to comply with certain corporate governance requirements, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the requirement that a majority of the board of directors consisting of independent directors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the requirement that a listed company having a compensation committee that is composed entirely of independent directors with a written charter addressing the committee's purpose and responsibilities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the requirement that we have a corporate governance and nominating committee that is composed entirely of independent directors with a written charter addressing the committee's purpose and responsibilities; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the requirement for an annual performance evaluation of the nominating and governance committee and compensation committee;

On the other hand, a controlled company must still comply with the exchange's other corporate governance standards. These include having an audit committee and the special meetings of independent or non-management directors. As a "controlled company," we are permitted to elect not to comply with certain corporate governance requirements. Although we do not intend to rely on the controlled company exemptions under the Nasdaq listing standards even if we are deemed a controlled company, we could elect to rely on these exemptions in the future, and if so, you would not have the same protection afforded to shareholders of companies that are subject to all of the corporate governance requirements of the Nasdaq Capital Market.

 **Name Change** 

On August 7, 2025, the Board of Directors and a majority of shareholders of the Company approved a change in the name of the Company from Favo Capital Inc. to Stewards, Inc. The Company has submitted an application with FINRA for a market effective date for the name change, as well as a change in symbol.

 **Reverse Stock Split**

On August 7, 2025, our board and a majority of our shareholders approved a reverse stock split within the range of 1-for-2 to 1-for-100 of our issued and outstanding shares of common stock and authorized the Board, in its discretion, to determine the final ratio in connection with the reverse stock split. The reverse stock split will occur no sooner than the market effective date established by FINRA. The reverse stock split will not impact the number of authorized shares of common stock, which will remain at 500,000,000 shares. The share and per-share information in this prospectus do not reflect the proposed reverse stock split of the issued and outstanding shares of our common stock to occur on or immediately following the effective date of the registration statement of which this prospectus forms a part. This prospectus will be amended by an amendment to this registration statement to reflect the reverse stock split ratio and the effect of such reverse stock split.

**Summary Risk Factors**

Investing in our securities involves risks. You should carefully consider the risks described in the "Risk Factors" section beginning on page 31 before deciding to invest in our securities. If any of these risks actually occur, our business, financial condition and/or results of operations would likely be materially adversely affected. In each case, the trading price of our securities would likely decline, and you may lose all or part of your investment. The following is a summary of some of the principal risks we face:

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Risks Related to Our Financial Condition

*•* *We have a history of losses, and we may be unable to achieve profitability.* 

 

*•* *There is no guarantee that cash flow from operations and/or debt and equity financings will provide sufficient capital to meet our expansion goals, working capital needs or fund our operations.* 

 

*•* *We have substantial debt which could adversely affect our ability to raise additional capital to fund operations and prevent us from meeting our obligations under outstanding indebtedness.* 

 

*•* *Because we have a limited operating history, you may not be able to accurately evaluate our operations.* 

 

*•* *As a growing company, we have yet to achieve a profit and may not achieve a profit in the near future, if at all.* 

 

Risks Related to Our Private Credit Business and Industry

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *Our growth may not be sustainable and depends on our ability to attract new customers, retain revenue from existing customers and increase sales to both new and existing customers.*

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *We are subject to risks relating to the availability of capital to fund SMB customers, the ability of our customers to generate sales to remit receipts, general macroeconomic conditions, legal and regulatory risks and the risk of fraud.*

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *Merchant cash advance businesses have historically been, and may in the future remain, more likely to be affected or more severely affected than large enterprises by adverse economic conditions.* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *If merchants provide information to us that is incorrect or fraudulent, we may misjudge a merchant's qualification to receive a cash advance and as a result, their operating results as well as ours may be harmed.*

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *An increase in customer defaults rates may reduce overall profitability.*

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *Allowance for losses is determined based upon both objective and subjective factors and may not be adequate to absorb losses. Merchants may fail to deliver cash advanced income in full.*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *Investors have risks from inflation and from deflation.*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *Merchant cash advance businesses may be unable to collect cash advance income on the cash advances made to customers.*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *We may not be able to successfully implement our growth strategy on a timely basis or at all.*

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *The merchant cash advance industry is not currently pervasively regulated, however, future regulations or in the way future regulations are applied to the merchant cash advance industry could adversely affect our business.*

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *Determination by a legislative or judicial body that a cash advance is a loan, rather than a purchase of future receipts, will adversely affect the merchant cash advance business and Company's business.*

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *Many of our specialty finance investment transactions involve borrowers about which little, if any, information is publicly available, which may impair our ability to identify borrowers able to repay our advances and adversely affect the price of our publicly traded securities.*

 

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *Failure to continue to innovate and respond to evolving technological changes may reduce demand for cash advances.*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *Due diligence in merchant cash advance transactions is not as stringent as that of traditional loans, which presents a greater risk of fraud and inaccurate valuations.*

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *Our growth strategy involves building on our success in financial solutions, which may present risks and challenges that we have not yet experienced.*

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *The markets in which we participate are highly competitive. We may not be able to compete successfully against current and future competitors.*

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *The impact of worldwide economic conditions such as inflation and changes in interest rates, including the resulting effect on the operations of and spending by SMBs and on consumer spending, may adversely affect our business, operating results and financial condition.*

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *Our business could be harmed if we fail to manage our growth effectively and efficiently.*

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *Our brand is integral to our success. If we fail to effectively maintain, promote and enhance our brand, our business and competitive position may be harmed.*

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *Our growth depends in part on the success of our strategic relationships with third parties.*

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *Security breaches, denial of service attacks, or other hacking and phishing attacks on our systems or other security breaches, including internal security failures, could harm our reputation or subject us to significant liability, and adversely affect our business and financial results.*

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *System failures, interruptions, delays in service, catastrophic events, inadequate infrastructure and resulting interruptions in the availability or functionality of our platform could harm our reputation or subject us to significant liability, and adversely affect our business and financial results.*

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *Interruptions or other issues in the proper functioning of or upgrades to our information technology systems could cause disruption to our operations.*

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *We store personal and other information of our partners, our customers and their consumers and our employees. If the security of this information is compromised or is otherwise accessed without authorization or is perceived to be compromised or accessed without authorization, our reputation may be harmed, and we may be exposed to liability and loss of business.*

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *Significant increases in the cost or decreases in the availability of the insurance we maintain could adversely impact our financial condition.*

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *Because we are a "Smaller Reporting Company," we may take advantage of certain scaled disclosures available to us, resulting in holders of our securities receiving less company information than they would receive from a public company that is not a Smaller Reporting Company.*

 

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *Our reliance on syndication partners and contractual arrangements for funding MCAs exposes us to risks if such partners reduce participation, fail to perform, or terminate agreements*

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *Our dependence on ISOs and other third-party distribution partners for a significant portion of originations subjects us to risks relating to partner performance, regulatory compliance, customer quality, and potential concentration of deal flow.* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *Our use of AI, machine learning, and automated tools, together with reliance on third-party data providers, exposes us to risks involving accuracy, operational continuity, data security, and regulatory scrutiny, any of which could materially affect our ability to underwrite, detect fraud, and manage credit risk.*

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *Our debt financing arrangement with Stewards International Funds PCC (on behalf of the Stewards Private Credit Fund) increases our fixed debt obligations and may result in shareholder dilution upon the future exercise of associated warrants.*

 

Risks Related to Our Real Estate Business and Industry

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *Because we have limited operating history in real estate relative to more established participants, we may face challenges in executing and scaling our strategy, which could materially and adversely affect our results.*

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *Because repositioning, redevelopment, or execution of our real estate investment strategy may involve construction risk, leasing challenges, regulatory delays, or cost overruns, we may not achieve anticipated returns, and our results of operations and financial condition could be materially and adversely affected.*

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *Because the value of our properties securing mortgage loans may decline due to market conditions, operational performance, or other factors, the collateral may not be sufficient to repay the indebtedness in the event of a foreclosure or forced sale, which could materially and adversely affect our financial condition and results of operations.*

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *Because our ability to grow our real estate portfolio depends on sourcing and successfully closing attractive acquisitions on favorable terms, any inability to identify, negotiate, or complete acquisitions in a timely manner, or at expected values, could adversely affect our growth strategy and financial results.*

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *Because our real estate portfolio is concentrated in select geographic markets, our operating results are subject to local economic conditions, regulatory environments, and real estate market trends in those areas, and adverse developments in these markets could disproportionately affect our performance and financial results.*

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *We face competition from established real estate owners, operators, and developers with greater resources, market presence, and operating experience, which may limit our ability to source acquisitions, attract tenants, achieve favorable lease terms, or realize our business objectives.*

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *The valuation of our real estate assets is inherently uncertain and may not accurately reflect the prices we could realize upon sale or refinancing, which could result in material differences between reported values and actual transaction outcomes.*

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *Market rents and real estate sales prices are subject to fluctuations driven by local supply and demand dynamics, interest rate environments, capital market conditions, and broader economic cycles, and such volatility could materially impact our rental income, asset valuations, and the proceeds we realize upon a sale or refinancing.*

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *Our real estate revenues depend on our ability to successfully attract condominium buyers and tenants through broker networks, advertising campaigns, referrals, and promotional efforts, and any failure or increased cost in executing these strategies could materially impact sales velocity, occupancy rates, and pricing power.*

 

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Risks Related to 1818 Park

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *Our high leverage, upcoming loan maturity, and dependence on refinancing expose us to significant risks, including increased sensitivity to property performance and interest rates, and the possibility that we may be unable to refinance on acceptable terms or may be forced to sell the property under adverse conditions.*

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *Our exposure to floating interest rates increases our sensitivity to changes in market rates, and rising interest rates could significantly increase our debt service costs, reduce cash flow, and adversely affect our financial condition.*

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *Our ability to generate rental income depends on maintaining high occupancy levels and stable tenant performance, and any decline in occupancy, increased lease turnover, or tenant defaults could reduce cash flows and adversely affect our financial condition.*

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *A significant portion of our rental income is derived from a limited number of tenants, and if these tenants experience financial difficulties, default on their leases, or choose not to renew, our revenues could be materially and adversely affected.*

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *Our financial performance is heavily influenced by local market conditions and broader economic trends, and adverse changes in employment levels, consumer demand, interest rates, or the supply of competitive properties could materially and adversely affect occupancy rates, rental income, and property values.*

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *We may require additional capital to support operations, fund improvements, or meet debt service obligations, and if we are unable to generate sufficient cash flow from the property or access financing on favorable terms, our liquidity could be constrained, forcing us to defer capital projects, seek dilutive equity, or dispose of assets under unfavorable conditions.*

 

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *Our ownership and operation of 1818 Park exposes us to property-specific risks, including physical condition issues, unanticipated capital expenditures, changes in local market demand, competition from nearby properties, and compliance with zoning, building, and environmental regulations, any of which could increase costs, reduce occupancy, or adversely affect the value and cash flow of the property.*

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *Integration of 1818 Park into our broader company operations may present challenges, including aligning property management systems, financial reporting, compliance controls, and strategic priorities, which could increase costs, divert management attention, or limit our ability to realize expected synergies.*

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ·  *Our acquisition of 1818 Park through a stock-for-liabilities transaction and the subsequent exchange of EB-5 investor interests for equity expose us to risks related to leverage, dilution, regulatory oversight, and investor relations.*

Risks Related to Acquisitions

• *We have in the past made, and in the future may make, acquisitions and investments that could divert management's attention, result in operating difficulties and dilution to our shareholders and otherwise disrupt our operations and adversely affect our business, operating results or financial position.* 

• *Businesses we acquire may not have disclosure controls and procedures and internal controls over financial reporting, cybersecurity controls and data privacy compliance programs, or their existing controls and programs may be weaker than or otherwise not in conformity with ours.* 

• *We may consider potential business or asset acquisitions in different industries, and stockholders may have no basis at this time to ascertain the merits or risks of any business or asset that we may ultimately operate or acquire.* 

• *Resources will be expended in researching potential acquisitions and investments that might not be consummated.* 

 

• *Subsequent to an acquisition or business combination, we may be required to take write-downs or write-offs, incur restructuring costs, and incur impairment or other charges that could have a significant negative effect on our financial condition, results of operations, and share price, which could cause stockholders to lose some or all of their investments.* 

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Risks Related to Our Management and Control Persons

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· *We rely heavily on our management, and the loss of their services could adversely affect our business.*

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *Our status as a controlled company and the concentration of voting power among our Founders could limit your ability to influence corporate matters..*

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *If we are unable to attract and retain qualified personnel, especially our design and technical personnel, we may not be able to execute our business strategy effectively.*

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *Provisions in the Nevada Revised Statutes and our Bylaws could make it very difficult for an investor to bring any legal actions against our directors or officers for violations of their fiduciary duties or could require us to pay any amounts incurred by our directors or officers in any such actions.*

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *Our officers and directors have limited experience managing a public company.*

Risks Related to Legal Uncertainty

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *Claims made against us from time to time can result in litigation that could distract management from our business activities and result in significant liability or damage to our brand.* 

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *We may be classified as an inadvertent investment company if we acquire investment securities in excess of 40% of our total assets.* 

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *We may be subject to tax and regulatory audits which could subject us to liabilities.* 

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *Changes in regulations or user concerns regarding privacy and protection of user data, or any failure to comply with such laws, could adversely affect our business.* 

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *Nevada law and certain anti-takeover provisions of our corporate documents could entrench our management or delay or prevent a third party from acquiring us or a change in control even if it would benefit our shareholders.* 

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *If we fail to maintain an effective system of internal control over financial reporting in the future, we may not be able to accurately report our financial condition, results of operations or cash flows, which may adversely affect investor confidence in us and, as a result, the value of our common shares.* 

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud.* 

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *Deficiencies in disclosure controls and procedures and internal control over financial reporting could result in a material misstatement in our financial statements.* 

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *There may be deficiencies with our internal controls that require that require improvements, and if we are unable to adequately evaluate internal controls, we may be subject to sanctions by the SEC.* 

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *We may be unable to protect our intellectual property from infringement by third parties, and the third parties may claim that we are infringing on their intellectual property, either of which could materially or adversely affect us.* 

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *We may be exposed to liabilities under the Foreign Corruption Practices Act and any determination that we violated these laws could have a materially adverse effect on our business.*

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Risks Related to Our Securities

• *We have the right to issue additional common stock and preferred stock without the consent of our stockholders, which would have the effect of diluting investors' ownership and could decrease the value of their investment.* 

• *Our Series A Preferred Stock, and all of our existing and future indebtedness rank senior to our common stock in the event of a liquidation, winding up or dissolution of our business.* 

• *We do not expect to pay dividends on our common stock in the foreseeable future. Any return on investment may be limited to the value of our common stock.* 

Risks Related to the Market for our Stock

• *If a market for our common stock does not develop, shareholders may be unable to sell their shares.* 

• *The market price of our common stock is likely to be highly volatile and could fluctuate widely in price in response to various factors, many of which are beyond our control.* 

• *Because we are subject to the "Penny Stock" rules, the level of trading activity in our stock may be reduced.* 

• *We will likely conduct further offerings of our equity securities in the future, in which case your proportionate interest may become diluted.* 

• *If securities or industry analysts do not publish research or reports about our business, or publish negative reports about our business, our share price and trading volume could decline.* 

• *FINRA sales practice requirements may limit a stockholder's ability to buy and sell our securities.* 

• *We may be unable to protect our intellectual property from infringement by third parties, and the third parties may claim that we are infringing on their intellectual property, either of which could materially or adversely affect us.* 

• *We may be exposed to liabilities under the Foreign Corruption Practices Act and any determination that we violated these laws could have a materially adverse effect on our business.* 

Risks Relating to this Offering and our Reverse Stock-Split

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *The market price of our common stock may be volatile or may decline regardless of our operating performance, and you may not be able to resell your shares at or above the public offering price.*

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *The purchase price of our common stock in the resale offering could be higher or lower than the primary offering.*

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *Investors in this offering will experience immediate and substantial dilution in net tangible book value.*

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *Participation in this offering by certain of our directors and their affiliates would reduce the available public float for our shares.*

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *Our management will have broad discretion as to the use of proceeds from this offering, and we may not use the proceeds effectively.*

 

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *Even if the reverse stock split achieves the requisite increase in the market price of our common stock, we cannot assure you that we will be able to continue to comply with the minimum bid price requirement of the Nasdaq Capital Market.*

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *Even if the reverse stock split increases the market price of our common stock and we meet the initial listing requirements of the Nasdaq Capital Market, there can be no assurance that we will be able to comply with the continued listing standards of the Nasdaq Capital Market, a failure of which could result in a de-listing of our common stock.*

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *The reverse stock split may decrease the liquidity of the shares of our common stock.*

 

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *Following the reverse stock split, the resulting market price of our common stock may not attract new investors, including institutional investors, and may not satisfy the investing requirements of those investors. Consequently, the trading liquidity of our common stock may not improve.*

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *There is no assurance that once listed on the Nasdaq Capital Market we will not continue to experience volatility in our share price.*

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; · *The number of shares being registered for resale with this offering is significant in relation to our outstanding shares.*

**Corporate History**

We were incorporated on July 12, 1999, in the State of Nevada under the name "Beeston Enterprises Ltd." Since the middle of 2006 to 2014, the Company has been in the exploration stage, primarily engaged in the acquisition, exploration, and development of mining properties.

On October 4, 2018, the District Court of Nevada appointed Custodian Ventures, LLC as custodian for Beeston Enterprises Ltd., proper notice having been given to the officers and directors of Beeston Enterprises Ltd. There was no opposition. The custodianship was granted by the court because the prior officers and directors of Beeston Enterprises Ltd. had abandoned its business and had failed within a reasonable time to take steps to dissolve, liquidate or distribute its assets in accordance with Chapter 78 of the Nevada Revised Statutes.

On October 12, 2018, we filed a certificate of reinstatement with the state of Nevada, and appointed David Lazar as President, Secretary, Treasurer and Director.

On March 5, 2003, we filed an SB-2 registration statement. On October 29, 2018, we filed a Form 15 with the Securities and Exchange Commission to suspend the Company's Section 15(d) reporting obligations under the Exchange Act.

On December 12, 2018, Custodian Ventures, LLC sold (i) the 25,000,000 shares of Series C Preferred Stock to Vincent Napolitano, (ii) 5,000,000 shares of common stock to Liro Holdings, LLC, and (iii) 468,350,000 shares of common stock to Favo Group, LLC for an aggregate purchase price of $175,000. At this point there was a change of control of our company and David Lazar resigned as President, Secretary, Treasurer and Director and Vincent Napolitano was appointed as President, Secretary, Treasurer and Director.

On December 26, 2018, we changed our name to Favo Realty, Inc. and we received a market effective from FINRA on January 9, 2019. At the time, we were a real estate investment company, intending to invest in a diversified portfolio of quality commercial real estate properties and other real estate investments located throughout the United States and Puerto Rico.

On January 9, 2019, we received a market effective date from FINRA for a 1-for-50 reverse stock split on our common stock outstanding, as well as a change in symbol to "FAVO."

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On April 6, 2019, we acquired RLT Atwood, a cryptocurrency mining operation listed on Merj Exchange (Seychelles Stock Exchange) with its mining operations in Sweden and created FAVO Blockchain Inc.

On January 31, 2020, we entered into a stock purchase agreement with Basebay, LLC. Pursuant to the agreement, we sold Favo Blockchain Inc., our wholly owned subsidiary, to Basebay, LLC. With this transaction, we no longer operate in the crypto-currency industry.

On September 2, 2020, we changed our name from Favo Realty, Inc. to Favo Capital, Inc., which is the point at which our business changed from a real estate investment company, to a private credit company providing alternative financing solutions to small and medium-sized businesses (SMBs) across the United States.

On May 31, 2023, we entered into an acquisition and financing agreement between the principals of FAVO Group and Stewards Investment Capital Limited. As part of the acquisition, the principals of FAVO Group transferred 100% of their membership interest in Favo Group LLC, FAVO Group Human Resources, LLC, FAVO Funding LLC, Honeycomb Sub Fund LLC, FORE Funding LLC, FORE Funding CA LLC and FAVO Funding CA LLC into our company. These consolidation entities with Favo Capital, Inc. are referred to herein as the "Favo Group of Companies." Stewards Investment Capital Limited will also serve on the advisory board for a 3 year term and for these services they will receive 15,000,000 shares of the Company's common stock.

Business activities of the entities acquired through common control is as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ▪ Favo Group LLC- Acted as the management company and tasked with ensuring smooth operations across all entities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ▪ Favo Funding LLC- Direct Merchant Cash Advance Funder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ▪ FAVO Capital Inc syndicated deals with FAVO Funding LLC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ▪ Honeycomb Sub Fund LLC- Syndication company that syndicates on deals with other third-party funders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ▪ Fore Funding LLC- The sales office for FAVO Funding LLC and also acts as broker for other third-party funders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ▪ Favo Funding CA LLC- Direct Merchant Cash Advance Funder for businesses in California state, no activity for the periods presented.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ▪ Fore Funding CA LLC- Sales office for business in California state, no activity for the periods presented.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ▪ Favo Group Human Resources LLC- Payroll processing for Favo Capital Inc.

As consideration for the acquisition, the Company will pay $14,200,000 in cash, Senior Secured Notes and equity to an entity (FAVO Holdings LLC) owned by the previous members, namely Shaun Quin and Vincent Napolitano.

The Company raised the financing for this transaction by selling 18 million shares of its Series A Preferred Stock at $0.25 for total of $4,500,000. $4,500,000 in cash has been paid to the principals of FAVO Group for the transfer of their membership. $2,500,000 of this financing was paid on the closing date of this transaction. The remaining $2,000,000 was paid as follows: $1,250,000 on August 31, 2023, and the remaining $750,000 on October 26, 2023.

The Company currently has an outstanding debt note from its acquisition of the FAVO Group of Companies, dated June 1, 2023, in the aggregate principal face value amount of $4,700,000, which requires payments of $1,500,000 on May 31, 2024, which has been made, $1,600,000 due on May 31, 2025 which has been paid, and the final payment due on May 31, 2026, for $1,600,000. The interest rate per annum is variable on the three payments of 6%, 3% and 1%, respectively.

On June 7, 2023, we filed with the Secretary of State of the State of Nevada a Certificate of Amendment to the Articles of Incorporation to increase our authorized shares of preferred stock from 25,000,000 shares to 50,000,000 shares, par value $0.0001 per share. The Amendment did not increase our authorized shares of common stock, which remained at 500,000,000 shares, par value $0.0001 per share.

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On November 27, 2023, we filed with the Secretary of State of the State of Nevada a Certificate of Amendment to the Articles of Incorporation to increase our authorized shares of preferred stock from 50,000,000 shares to 100,000,000 shares, par value $0.0001 per share. The Amendment did not increase our authorized shares of common stock, which remained at 500,000,000 shares, par value $0.0001 per share.

On November 29, 2023, we filed with the Secretary of State of the State of Nevada a Certificate of Amendment to the Certificate of Designation for the Series C Preferred Stock to decrease our authorized shares of Series C preferred shares from 25,000,000 shares down to 18,750,000 shares.

On November 29, 2023, we filed with the Secretary of State of the State of Nevada a Certificate of Amendment to the Certificate of Designation for the Series A Preferred Stock to increase our authorized shares of Series A preferred shares from 20,000,000 shares up to 81,250,000 shares.

On January 2, 2024, the Company completed the acquisition of the proprietary software platform and call center operations of LendTech CRM Solutions LLC, Believe PMF EIRL, and DBOSS Funding, LLC (collectively, the "Simplified Acquisition"). We refer to this transaction as the "Simplified Acquisition" because it involved the purchase of a group of affiliated businesses and assets (together, the "Simplified Companies") through a single coordinated transaction structure, rather than separate acquisitions of each entity. The total consideration for the Simplified Acquisition was approximately $2,167,996, consisting of 1,000,000 shares of the Company's restricted common stock issued at closing, an additional 2,000,000 shares to be issued on each of the first and second anniversaries of the closing date, $400,000 in cash, and $692,469 in deferred commission measured at fair value. Of this total, approximately $1,650,000 represented the consideration paid specifically for the proprietary software platform and call center operations. Based upon the timing of the Simplified Acquisition, the Company's consolidated financial statements for the year ended December 31, 2024 reflect the results of Favo Capital for the portion of the period after the completion of the Simplified Acquisition. The Company's consolidated financial statements for the year ended December 31, 2023 do not reflect the results of the Simplified Companies.

The Simplified Companies are engaged in the business of using proprietary software and call centers in the Dominican Republic and Florida to offer secured and unsecured financial products and services to clients with funders across the United States. The business generates revenue primarily from commissions earned from funders.

The primary reason for the business combination was to grow our direct funding business and improve overall margins by leveraging the synergies between the Company and the Simplified Companies.

In connection with our operations, we entered into a Business Commission Agreement dated December 21, 2023, with Robinpaws, LLC, a Florida limited liability company solely owned by Robin Nadeau-Camus. The agreement was a condition of a larger asset purchase transaction and provides for a four-year term. Under the original agreement, Robinpaws agreed to refer new business clients to Favo Capital in exchange for a combination of fixed annual compensation and commissions.

On January 24, 2025, the agreement was amended to significantly modify the compensation structure, particularly for renewals and lender bonuses. The amendment introduced a new two-tiered structure for renewals, whereby a 50% commission is paid only if the renewal falls within specific qualifying categories, such as renewals with the same lender paying off an existing position, LOC or equipment financing arrangements, collateral-based programs, or one-position payoffs. Renewals not meeting these criteria are treated as "new business" and paid at the tiered new business commission rates of 0.75% or 1.25%. The amendment also reduced the commission on lender bonuses and professional service fees from 50% to 30%. All other material terms of the original agreement remained in effect.

During the year ended December 31, 2023, the agreement generated no commission expense. For the year ended December 31, 2024, the agreement generated approximately $489,557 in commission expense. For the six months ended June 30, 2025, the agreement generated approximately $312,616 in commission expense.

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On February 15, 2024, the Company filed with the Secretary of State of the State of Nevada Amended and Restated Articles of Incorporation.

On May 8, 2025, the Company signed subscription agreements with Stewards International Funds PCC to purchase 32,000,000 shares of Series A preferred shares for a total investment of $8,000,000.

On May 9, 2025, Vincent Napolitano, our officer, director and majority shareholder of the Company issued a notice of conversion to our company to convert 18,750,000 shares of his Series C Preferred Stock into 18,750,000 shares of our company's common stock, as provided for under the Certificate of Designation, as amended, for the Series C Preferred Stock.

On the same date, we instructed our transfer agent to convert the 18,750,000 shares of Series C Preferred Stock into common stock and, as per the instructions of Mr. Napolitano, to issue 18,750,000 new shares of common stock to entities related to our officers and directors, as follows:

VK Nap Family (10,359,375 shares)

S & T Quin Family Limited Partnership (5,578,125 shares)

Stewards Investment Capital (2,812,500 shares)

As a result of the above conversion, there are no outstanding shares of our Series C Preferred Stock and there has been an increase in our outstanding shares of common stock of 18,750,000 shares.

On July 11, 2025, the Company entered into and closed on three separate membership interest purchase agreements ("MIPAs"), two of which were for the purchase of all of the outstanding membership interests in Block 40 Investments Holdings, LLC and Block 40 Managers, LLC (the "Block 40 Entities") from the member owners of the Block 40 Entities and the last for the purchase of all of the outstanding membership interests that Hollywood Circle Capital, LLC held in Block 40, LLC (the "Transaction"). In exchange, the Company agreed to issue an aggregate of 69,636,906 shares of our restricted common stock to the member owners of the Block 40 Entities pro rata to their holdings, valued at $0.76 per share, and for the membership interests that Hollywood Circle Capital, LLC held in Block 40, LLC.

The Block 40 Entities and Hollywood Circle Capital, LLC own 100% of the membership interests of Block 40, LLC ("Block 40"). Block 40 owns 1818 Park, a modern, mixed-use development that features residential, office, and retail components. The property, detailed at 1818Park.com, is a newly built, stabilized asset boasting high occupancy and long-term lease agreements across its tenant base, offering durable cash flow and positioning FAVO Capital in the heart of Young Circle, one of South Florida's most vibrant commercial hubs.

On July 14, 2025, the Company signed subscription agreements with Forfront Capital LLC to purchase 1,000,000 shares of Series A preferred shares for a total investment of $250,000.

On August 4, 2025, the Company signed subscription agreements with Stewards International Funds PCC to purchase 4,000,000 shares of Series A preferred shares for a total investment of $1,000,000.

On September 9, 2024, the Company entered into a securities purchase agreement (the "Securities Purchase Agreement") with certain purchasers (the "Purchasers") for the purchase and sale of Company's securities. In an initial closing, the Company issued 8,000,000 of the Common Units, each such Common Unit consisted of one share of the Company's common stock with a par value $0.0001 per share ("Common Stock"), common warrants ("Warrants") to purchase one Common Stock, for every one share of common stock purchased and a pre-funded warrant ("Pre-funded Warrant") to purchase 3/200th share of Common Stock purchased. Pursuant to the Securities Purchase Agreement, the Common Units were sold at a purchase price of $0.25 per share, with five-year Warrants having exercise price of $0.40 per share and the Pre-funded Warrants having exercise price of $0.0001 per share.

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The sale of the Units to the Purchasers closed on December 12, 2025. The aggregate gross proceeds to the Company from the December 2024 offering were approximately $2,000,000 before deducting placement agent fees and expenses and other transaction costs of $207,600.

In a second closing, the Company issued 1,750,000 of the Common Units. Pursuant to the Securities Purchase Agreement, the Common Units were sold at a purchase price of $0.25 per share, with five-year Warrants having exercise price of $0.40 per share and the Pre-funded Warrants having exercise price of $0.0001 per share. The sale of the Common Units to the Purchasers closed on July 30, 2025. The aggregate gross proceeds to the Company from the July 2025 offering were approximately $437,500, before deducting placement agent fees and expenses and other transaction costs of $51,350.

The Company issued an additional 5% in common stock and 5% in warrants to all participants of the offering for the first and second closing, in lieu of the effectiveness deadline extension to December 31, 2025. As a result, the Company issued 487,500 shares of common stock and warrants to purchase 487,500 shares of common stock to the investors.

On August 7, 2025, the Board of Directors and a majority of shareholders of the Company approved a change in the name of the Company from Favo Capital Inc. to Stewards Inc. The Company has submitted an application with FINRA for a market effective date for the name change, as well as a change in symbol.

On August 7, 2025, our board and a majority of our shareholders approved a reverse stock split within the range of 1-for-2 to 1-for-100 of our issued and outstanding shares of common stock and authorized the Board, in its discretion, to determine the final ratio in connection with the reverse stock split. The reverse stock split will occur no sooner than the market effective date established by FINRA. The reverse stock split will not impact the number of authorized shares of common stock, which will remain at 500,000,000 shares. The share and per-share information in this prospectus do not reflect the proposed reverse stock split of the issued and outstanding shares of our common stock to occur on or immediately following the effective date of the registration statement of which this prospectus forms a part. This prospectus will be amended by an amendment to this registration statement to reflect the reverse stock split ratio and the effect of such reverse stock split.

On August 25, 2025, we filed a withdrawal of our certificate of designation, as amended, for our Series C Preferred Stock.

On August 25, 2025, our board and shareholders approved the creation of Series B Preferred Stock and we later filed a certificate of designation with the State of Nevada. The certificate of designation provides that 10,000,000 authorized shares of preferred stock are designated as Series B Preferred Stock. The Series B Preferred Stock shall have no value in the event of the liquidation of our company or any rights to distributions declared by our company. After five years, the Series B Preferred Stock is convertible into shares of Common Stock on a 1 for 1 basis. Each share of Series B Preferred Stock is entitled to fifty (50) votes on any matter brought before the voting shareholders of our company.

Also on August 25, 2025, we entered into a Conversion Agreement with Forfront, LLC, an affiliate of our company, for it to convert 10,000,000 shares of Series A Preferred Stock into 10,000,000 shares of our newly created Series B Preferred Stock.

Finally, on August 25, 2025, we entered into Voting Agreement with Forfront, LLC, in which Forfront agreed to vote its shares of Series B Preferred Stock in accordance with the direction of our founders, which includes Vincent Napolitano, Shaun Quin and Glen Steward, with the President of our company receiving an irrevocable proxy from Forefront to vote its shares in accordance with the direction of our founders.

The conversion to Series B Preferred Stock and the Voting Agreement are part of a strategic initiative to streamline our capital structure, enhance governance control during a critical phase involving corporate rebranding, and align leadership with long-term objectives without diluting economic interests of non-affiliate shareholders. The Board determined this related-party transaction to be fair under Nevada law and ratified it by majority voting power.

On August 26, 2025, following the MIPA acquisition of the Block 40 Entities and Hollywood Circle Capital, LLC, we initiated an offer to EB-5 investors in Block 40, LLC to exchange their preferred membership interests for shares of our common stock. These EB-5 interests were legacy obligations specific to the Block 40 real estate project and were included in the $190 million purchase price allocation. The EB-5 preferred interests in Block 40 carried accumulating preferred returns that continued indefinitely unless converted or otherwise repurchased. By offering equity in exchange, we seek to reduce the long-term accrual burden of these obligations, strengthen the balance sheet with a more permanent capital structure, and align these legacy investors with the Company's long-term growth strategy.

On September 1, 2025, the Company entered into a debt financing arrangement with Stewards International Funds PCC (on behalf of the Stewards Private Credit Fund), pursuant to which it may raise up to $50 million through the issuance of unsecured and unsubordinated debt notes (the "Favo Debt Notes"). The debt carries a fixed annual interest rate of 8.00%, with a maturity date in August 2030. In connection with this financing, the Company also agreed to issue warrants to the noteholder, exercisable for ordinary shares at a fixed price of $0.76 per share. The warrants are subject to a delayed exercise period, commencing no earlier than 12 months following an IPO or the maturity date, whichever is later, and are structured to minimize dilution around the time of the Company's planned public offering. Proceeds from the issuance of the Favo Debt Notes are to be used exclusively for (i) refinancing existing indebtedness, which currently carries an effective annual interest rate of approximately 15% and matures in June 2026, and (ii) funding the Company's general operational needs. This refinancing is intended to materially reduce cash interest expense, strengthen the Company's balance sheet, and improve financial flexibility to support long-term growth.

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**SUMMARY OF THE OFFERING**

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| | |
|:---|:---|
| Securities offered by FAVO | [\*] of shares of common stock (or [\*] shares of common stock if the Underwriter exercises its over-allotment option in full) on a firm commitment basis.<br>|
| Assumed Public Offering Price | We currently estimate that the initial public offering price will be between $[\*] and $[\*] per share. (1) |
| Shares of common stock outstanding prior to the offering | [\*] shares of common stock. |
| Shares of common stock outstanding after the offering (2) | [\*] shares of common stock, assuming the sale of all the shares offered in this prospectus, [\*] shares if the Underwriter exercise the over-allotment in full. |
| Over-allotment option | We have granted to the underwriters an option, exercisable within 45 days after the closing of this offering, to purchase up to additional [\*] shares at the public offering price, less underwriting discounts and commissions. The underwriter may exercise this option solely for the purpose of covering over-allotments, if any, made in connection with the offering of the common stock offered by this prospectus.<br>|
| Use of Proceeds | We estimate that we will receive net proceeds of approximately $[\*] million from our sale of common stock in this offering, after deducting underwriting discounts and estimated offering expenses payable by us.<br>We intend to use the net proceeds from this Offering (i) to drive growth by extending capital to businesses in need (ii) for general corporate purposes, including, without limitation, for working capital purposes, hiring of technical and administrative personnel, enhancing marketing & acquiring IT equipment, making payments of accounts payable and pre-payments within our supply chain; (iii) to finance capital expenditures, including without limitation the expansion of premises, acquisition of equipment and transportation, and (iv) the payment of indebtedness. <br>In addition, while we have not entered into any agreements, commitments or understandings relating to any significant transaction as of the date of this prospectus, we may use a portion of the net proceeds to pursue acquisitions, joint ventures and other strategic transactions.<br>See "Use of Proceeds." |
| Underwriter Compensation | In connection with this offering, the underwriter will receive an underwriting discount equal to 8% of the gross proceeds from the sale of common stock in the offering. We will also reimburse the underwriter for certain out-of-pocket actual expenses related to the offering See "Underwriting." |
| Trading Symbol | Our common stock is presently quoted on the OTC Pink under the symbol "FAVO." On August 7, 2025, the Board of Directors and a majority of shareholders of the Company approved a change in the name of the Company from Favo Capital Inc. to Stewards, Inc. The Company has submitted an application with FINRA for a market effective date for the name change, as well as a change in symbol. The name and symbol change will not be effective until FINRA approval. <br>The closing of this offering is conditioned upon Nasdaq's final approval of our listing application, and there is no guarantee or assurance that our common stock will be approved for listing on Nasdaq.<br>|

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|:---|:---|
| Reverse Stock Split | On August 7, 2025, our board and a majority of our shareholders approved a reverse stock split within the range of 1-for-2 to 1-for-100 of our issued and outstanding shares of common stock and authorized the Board, in its discretion, to determine the final ratio in connection with the reverse stock split. The reverse stock split will occur no sooner than the market effective date established by FINRA. The reverse stock split will not impact the number of authorized shares of common stock, which will remain at 500,000,000 shares. The share and per-share information in this prospectus do not reflect the proposed reverse stock split of the issued and outstanding shares of our common stock to occur on or immediately following the effective date of the registration statement of which this prospectus forms a part. This prospectus will be amended by an amendment to this registration statement to reflect the reverse stock split ratio and the effect of such reverse stock split. |
| Risk Factors | Investing in our securities involves a high degree of risk and purchasers of our securities may lose their entire investment. See "Risk Factors" starting on page 31 and the other information included and incorporated by reference into this prospectus for a discussion of risk factors you should carefully consider before deciding to invest in our securities. |
| Dividends | We do not currently anticipate paying dividends on our common stock. Any declaration and payment of future dividends to holders of our common stock will be at the sole discretion of the Board and will depend on many factors, including our financial condition, earnings, capital requirements, level of indebtedness, statutory and contractual restrictions applicable to the payment of dividends, and other considerations that our Board deems relevant. See "Dividend Policy." |
| Lock-up Agreements | Our directors, officers and certain shareholders have agreed with the underwriter not to offer for sale, issue, sell, contract to sell, pledge or otherwise dispose of any of our common stock or securities convertible into common stock for a period of 180 days after the date of this prospectus. See "Underwriting—Lock-Up Agreements." |
| Voting Rights | Shares of our Common Stock are entitled to one vote per share.<br>Each share of our Series A Preferred Stock is entitled to one vote and each share of Series A Preferred Stock is convertible into one share of Common Stock. <br>Each share of our Series B Preferred Stock is entitled to 50 votes per share, and each share of Series B Preferred Stock is convertible into one share of Common Stock.  |

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| |
|:---|
| (1) The actual number of shares of common stock we will offer will be determined based on the actual public offering price and the reverse split ratio will be determined based on the stock price. |
| (2) The number of shares outstanding after this offering is based on [\*] shares of common stock outstanding on September [\*], 2025, but does not include: |

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• 20,000,000
 shares that were reserved for equity awards under our Favo Capital, Inc. 2024 Equity Incentive Plan adopted on August 21, 2024;

• 10,237,500
 shares issuable upon exercise of warrants, with an initial exercise price of $0.40 per share;

• 146,250
 shares issuable upon exercise of prefunded warrants, with an initial exercise price of $0.0001 per share;

• 64,020,000
 shares issuable upon conversion of our outstanding Series A Preferred Stock; and

• 10,000,000
 shares issuable upon conversion of our outstanding Series B Preferred Stock.

Except as otherwise indicated, all information in this prospectus assumes no exercise of the underwriter's option to purchase additional shares from us in this offering.

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Pursuant to a separate resale prospectus included in the registration statement of which this prospectus forms a part, we are also registering 20,621,250 shares of common stock for resale by certain selling stockholders. No resales of the common stock covered by this prospectus shall occur until the closing of our primary offering. Once the primary offering is completed, the selling stockholders may sell their shares from time to time at the market price prevailing at the time of offer and sale, or at prices related to such prevailing market prices or in negotiated transactions or a combination of such methods. Usual and customary or specifically negotiated brokerage fees or commissions may be paid by the selling stockholders. There are risks associated with having two offerings. See "Risk Factors — Risks Related to this Offering."

**RISK FACTORS**

*An investment in our Common Stock involves a high degree of risk. You should carefully consider the risks described below, together with all of the other information included in this prospectus, before making an investment decision. If any of the following risks actually occurs, our business, financial condition, or results of operations could suffer. In that case, the trading price of our shares of Common Stock could decline and you may lose all or part of your investment. See " Cautionary Statement Regarding Forward-Looking Statement<u>s</u>" above for a discussion of forward-looking statements and the significance of such statements in the context of this prospectus.*

**Risks Related to our Financial Condition**

***We have a history of losses, and we may be unable to achieve profitability.***

We have incurred net losses of $8,658,780 and $7,673,207 for the fiscal years ended December 31, 2024, and 2023, respectively. As of June 30, 2025, we had an accumulated deficit of approximately $40,179,891. These losses and accumulated deficit are a result of, among other things, the substantial investments we made to grow our business and expenses incurred in connection with our acquisitions. We expect to make significant expenditures to grow our business in the future.

We plan to make opportunistic and deliberate investments in sales and marketing to attract new businesses to the financial products we offer. We also plan to continue to selectively pursue acquisition opportunities, which require that we incur various expenses and fees of external advisors. Businesses we have acquired and may in the future acquire have different levels of profitability than us, which may affect our overall profitability, particularly until we are able to realize expected synergies. These increased expenditures will make it harder for us to achieve profitability and we cannot predict with certainty whether we will achieve profitability in the near term or at all.

Historically, certain of our costs have increased each year due to these factors and we expect to continue to incur increasing costs to support our anticipated future growth. If the costs associated with acquiring new customers, including online advertising and paid search costs, outbound lead generation, scaling our field sales teams, or the terms on which our partners refer clients to us, materially rise in the future, our expenses may rise significantly. If we are unable to generate adequate revenue growth and manage our expenses and restructure our debt, we may continue to incur significant losses and may not achieve or maintain profitability, which could cause the trading price of our shares to further decline. Failure to generate adequate revenue growth, as well as other related factors, may cause decreases in asset values, such as our goodwill, that are deemed to be other than temporary, which may result in further impairment losses.

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We may make decisions that will reduce our short-term operating results if we believe those decisions will improve the experiences of our customers and their consumers and if we believe such decisions will improve our operating results over the long-term. These decisions may not be consistent with the expectations of investors and may not produce the long-term benefits that we expect, in which case our business may be materially and adversely affected.

***There is no guarantee that cash flow from operations and/or debt and equity financings will provide sufficient capital to meet our expansion goals, working capital needs or fund our operations.***

Our current strategic plan includes the expansion of our company both organically and through acquisitions if market conditions and competitive conditions allow. Due to the long-term nature of investments in acquisitions and other financial needs to support organic growth, including working capital, we expect our long-term and working capital needs to periodically exceed the short-term fluctuations in cash flow from operations. We anticipate that we may need to raise additional external capital from the sale of common stock, preferred stock and/or debt instruments as market conditions may allow, in addition to cash flow from operations (which may not always be sufficient), to fund our growth and working capital needs.

In the event that we need to raise significant amounts of external capital at any time or over an extended period, we face a risk that we may need to do so under adverse capital market conditions with the result that our existing shareholders, as well as persons who acquire our common stock, may incur significant and immediate dilution should we raise capital from the sale of our common or preferred stock. Similarly, we may need to meet our external capital needs from the sale of secured or unsecured debt instruments at interest rates and with such other debt covenants and conditions as the market then requires. However, there can be no guarantee that we will be able to raise external capital on terms that are reasonable in light of current market conditions. In the event that we are not able to do so, those who acquire our common stock may face significant and immediate dilution and other adverse consequences. Further, debt covenants contained in debt instruments that we issue may limit our financial and operating flexibility with consequent adverse impact on our common stock market price.

***We have substantial debt which could adversely affect our ability to raise additional capital to fund operations and prevent us from meeting our obligations under outstanding indebtedness.***

As of June 30, 2025, our total indebtedness was approximately $42,958,453, including notes payable of approximately $34,391,767.

This substantial debt could have important consequences, including the following: (i) a substantial portion of our cash flow from operations may be dedicated to the payment of principal and interest on indebtedness, thereby reducing the funds available for operations, future business opportunities and capital expenditures; (ii) our ability to obtain additional financing for working capital, debt service requirements and general corporate purposes in the future may be limited; (iii) we may face a competitive disadvantage to lesser leveraged competitors; (iv) our debt service requirements could make it more difficult to satisfy other financial obligations; and (v) we may be vulnerable in a downturn in general economic conditions or in our business and we may be unable to carry out activities that are important to our growth.

While we currently hold approximately $42,958,453 in outstanding debt, and our annual interest expense currently amounts to approximately $5,500,000, we plan to use additional external capital as market conditions may allow, in addition to cash flow from operations (which may not always be sufficient and refinancing strategy is designed to systematically reduce this liability, improving financial stability and reducing cash flow pressure. By prioritizing the most expensive debt obligations, we anticipate achieving a stronger financial position, leading to sustained profitability within three years.

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However, our ability to make scheduled payments of the principal of, or to pay interest on, or to refinance our indebtedness depends on and is subject to our financial and operating performance, which in turn is affected by general and regional economic, financial, competitive, business and other factors beyond management's control. If we are unable to generate sufficient cash flow to service our debt or to fund our other liquidity needs, we will need to restructure or refinance all or a portion of our debt, which could impair our liquidity. Any refinancing of indebtedness, if available at all, could be at higher interest rates and may require us to comply with more onerous covenants that could further restrict our business operations. Despite our significant amount of indebtedness, we may need to incur significant additional amounts of debt, which could further exacerbate the risks associated with our substantial debt. ****

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***Because we have a limited operating history, you may not be able to accurately evaluate our operations.***

We have had limited operations to date. On September 2, 2020, we changed our name from Favo Realty, Inc. to Favo Capital, Inc., which is the point at which our business changed from a real estate investment company, to a private credit company providing alternative financing solutions to small and medium-sized businesses (SMBs) across the United States, through revenue-based funding solutions. We have recently acquired 1818 Park and are now engage in real estate operations. Therefore, we have a limited operating history upon which to evaluate the merits of investing in our company. Potential investors should be aware of the difficulties normally encountered by new companies and the high rate of failure of such enterprises. The likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays encountered in connection with the operations that we plan to undertake. These potential problems include, but are not limited to, unanticipated problems relating to the ability to generate sufficient cash flow to operate our business and additional costs and expenses that may exceed current estimates. We expect to continue to incur significant losses into the foreseeable future. We recognize that if the effectiveness of our business plan is not forthcoming, we will not be able to continue business operations. There is no history upon which to base any assumption as to the likelihood that we will prove successful, and it is doubtful that we will generate any operating revenues or ever achieve profitable operations. If we are unsuccessful in addressing these risks, our business will most likely fail.

***As a growing company, we have yet to achieve a profit and may not achieve a profit in the near future, if at all.***

We have not yet produced any significant revenues or profits and may not in the near future, if at all. Further, many of our competitors have a significantly larger industry presence and revenue stream and may have already achieved profitability. Our ability to continue as a going concern is dependent upon raising capital from financing transactions, increasing revenue and keeping operating expenses below our revenue levels in order to achieve positive cash flows, none of which can be assured.

 **Risks Related to Our Private Credit Business and Industry**

***Our growth may not be sustainable and depends on our ability to attract new customers, retain revenue from existing customers and increase sales to b*** ***oth new and existing customers.***

We operate a direct and syndication funding platform to serve small and medium-sized businesses ("SMBs") in need of liquidity to fulfill their financial responsibilities. Through our direct sales, marketing, underwriting and operational platform and with our syndication partners, we provide funding solutions for customers. We originate and provide financing to businesses primarily through a merchant cash advance ("MCA") product offering. Under an MCA, businesses receive funds in exchange for a portion of the business's future receipts at an agreed upon discount and repayment term. The majority of our portfolio will be invested in the MCA business.

We currently maintain relationships with six syndication partners, three core partners and three secondary partners, all of whom operate in the Merchant Cash Advance (MCA) industry and provide revenue-based financing solutions. Pursuant to Master Participation Agreements and related agreements, we participate in approved transactions with these partners at levels generally ranging from 10% to 95% of the deal value. The Company originates, funds, and services transactions, including collections, on behalf of itself and its partners. To manage concentration risk, we do not participate in any syndication arrangement where our exposure exceeds 40% of a partner's total portfolio. All syndication partners are provided with investment guidelines aligned with our internal underwriting standards, and they are required to adhere to those criteria to ensure consistency and risk alignment across all investments.

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We focus on serving small and medium-sized businesses, many of which are in the entrepreneurial or early growth stage of development. These SMBs often lack long credit histories and are more susceptible than larger enterprises to macroeconomic pressures such as inflation, consumer spending shifts, and interest rate increases. As a result, they may have greater turnover or financing needs. Approximately 30–40% of our direct portfolio customers return for multiple rounds of funding.

Our underwriting framework, described above, is designed to address this heightened risk profile by incorporating a wide range of alternative data points beyond traditional credit bureau scores. For example, we may analyze merchant bank statement performance, cash flow patterns, digital footprint, landlord payment history, and government filings, in addition to credit bureau data. By relying on real-time business data and technology-enabled verification, we can better assess the true repayment capacity of SMBs whose financial stability may not otherwise be captured by conventional credit scoring methods.

This approach provides us with visibility into businesses that traditional lenders often overlook, while balancing risk and enabling us to meet the financing needs of entrepreneurial SMBs.

We may also fail to attract new customers, retain revenue from existing customers or increase sales to both new and existing customers as a result of a number of other factors, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ▪ reductions in our current or potential customers' spending levels;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ▪ a decrease in SMB spending, including due to a deteriorating macroeconomic environment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ▪ competitive factors affecting the markets for our financial products, including the introduction or innovation of competing financial products and other strategies that may be implemented by our competitors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ▪ global political, economic, social and environmental risks that may impact our operations or our customers' operations and/or decrease consumer spending, including pandemics and other global health crises, natural disasters, acts or threats of war or terrorism and other general security concerns such as the Russian invasion of Ukraine and the Israel-Hamas war;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ▪ our ability to execute on our financial solutions roadmap, growth strategy and operating plans;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ▪ our ability to successfully sell and transition new and existing customers to our financial solutions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ▪ our ability to meet the demands and requirements of larger customers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ▪ a decline in the market share of SMBs relative to large enterprises;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ▪ a decline in our SMBs' level of satisfaction with our financial solutions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ▪ changes in our relationships with third parties, including syndicate brokers, underwriters, brokers, real estate professionals and others;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ▪ the timeliness and success of new financial solutions and services we may offer in the future;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ▪ customer perceptions of business in the context of our growth and in the context of acquisitions we complete;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ▪ our brand recognition;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ▪ concerns relating to actual or perceived privacy or security breaches;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ▪ the frequency and severity of any system outages;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ▪ terminations of relationships with certain customers or partners for unacceptable business practices, contract breaches or because required by law;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ▪ technological changes or problems; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ▪ our focus on long-term value over short-term results, meaning that we may make strategic decisions that may not maximize our short-term revenue or profitability if we believe that the decisions are consistent with our mission and will improve our financial performance over the long-term.

Due to these factors and the continued evolution of our business, our historical revenue growth rate and operating margin may not be indicative of future performance.

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 ***We are subject to risks relating to the availability of capital to fund SMB customers, the ability of our customers to generate sales to remit receipts, general macroeconomic conditions, legal and regulatory risks and the risk of fraud.***

We offer MCAs and other financial solutions for SMBs. This program provides cash advances to eligible small businesses and is designed to help them with overall business growth and cash management. Such merchant cash advance programs are subject to risks. For direct fundings, we handle the underwriting process, contract with the merchant directly and fund from our own resources. For syndicated fundings, however, we are dependent on our syndication partners and the lead funder in particular, to operationalize merchant cash advances. Further, if we cannot source capital to fund the advances for our customers, we might have to reduce the availability of this service, or cease offering it altogether.

A decline in macroeconomic conditions could lead to a decrease in the number of our customers eligible for an advance, and/or increase the risk of fraud or non-payment. If more of our customers cease operations, experience a decline in sales, or engage in fraudulent behavior, including subverting our underwriting processes, it would make it more difficult for us to obtain the receivables we have purchased via merchant cash advances or to obtain repayment of merchant cash advances we have made. In addition, if we fail to correctly predict the likelihood of timely repayment of merchant cash advances, our business may be materially and adversely affected. Merchant cash advances are generally unsecured obligations, and they are not guaranteed or insured in any way.

Loss rates on merchant cash advances may increase due to factors such as prevailing interest rates, the rate of unemployment, the level of consumer and business confidence, commercial real estate values, the value of the U.S. dollar, energy prices, changes in consumer and business spending, the number of personal bankruptcies, disruptions in the credit markets and other factors. While we believe that our underwriting process is designed to establish that our customers will be a reasonable credit risk, our merchant cash advances to SMBs may nevertheless be expected to have a higher default rate than advances made to customers with more established operating and financial histories.

We intend to continue to explore other financial solutions, models, structures and markets to advance cash or capital to our merchants. Some of those models, structures or markets may require, or be deemed to require, additional procedures, partnerships, licenses, regulatory approvals or capabilities. Should we fail to expand and evolve in this manner, or should these new products, models, structures, markets or new regulations or interpretations of existing regulations impose requirements on us that are impractical or that we cannot satisfy, the future growth and success of our merchant cash advance program may be materially and adversely affected.

 ***Merchant cash advance businesses have historically been, and may in the future remain, more likely to be affected or more severely affected than large enterprises by adverse economic conditions.***

Our direct funding portfolio has SMBs across multiple segments and industry types, but most of our merchants fall into the services, construction, and retail industries. These include restaurants, construction and development projects, physical fitness facilities, accounting and bookkeeping practices, home furnishings and equipment stores, and automotive repair shops, among others.

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The composition of our syndication portfolio closely aligns with that of our direct investments, both of which are strategically shaped by evolving market dynamics. Key determinants include macroeconomic conditions, the influence of domestic and international government policy decisions, and the relative advantages of specific U.S. geographic regions. Regulatory and policy environments, whether supportive or restrictive, impact sector performance and are carefully considered in our portfolio construction and allocation strategy.

Given that our debtor mix involves merchants with a lack of resources compared with larger more established companies, these conditions may result in a decline in the demand for merchant cash advance businesses by potential customers, higher default rates by future customers, or slower rates of receiving cash advance income from third-party debtors. If any merchant cash advance businesses' future receipts are lower than the Company projected, collection of the merchant cash advance businesses' income will take longer than projected, which could result in a loss of income to the Company.

We will also bear a loss of income if the customer fails to generate future business sufficiently to deliver the total amount of cash advance income the merchant cash advance businesses expect. If a customer defaults on a cash advance, the cash advance enters a collections process where systems and collections teams initiate contact with the customer for payments owed. If a cash advance contract is subsequently charged off, the merchant cash advance business could sell the contract to a third-party collection agency and receive only a small fraction of the remaining amount payable to that merchant cash advance business in exchange for the sale. There can be no assurance that economic conditions, demand for cash advances, or default rates by customers will remain favorable for the merchant cash advance businesses, which will ultimately affect our business.

Reduced demand for cash advances would negatively impact merchant cash advance businesses growth and revenue, while increased default rates by cash advance customers may inhibit merchant cash advance businesses' access to capital and negatively impact profitability. Furthermore, if an insufficient number of qualified small businesses apply for the cash advances, merchant cash advance businesses and the Company's growth and revenue could decline.

 ***If merchants provide information to us that is incorrect or fraudulent, we may misjudge a merchant's qualification to receive a cash advance and as a result, their operating results as well as ours may be harmed.***

Our decisions to fund are based partly on information provided by applicant merchants. To the extent that these applicants provide information in a manner that we are unable to verify, we may not be able to accurately determine the associated risk. Inaccurate analysis of credit data that could result from false cash advance application information could harm our reputation, business and operating results. This would have a knock-on effect on our own ability to conduct business operations.

While we intend to use identity and fraud checks analyzing data provided by external databases to authenticate each merchant's identity, there is a risk that these checks could fail, and fraud may occur. We may not be able to recoup funds underlying cash advances made in connection with inaccurate statements, omissions of fact or fraud, in which case our revenue, operating results and profitability will be harmed. Fraudulent activity or significant increases in fraudulent activity could also lead to regulatory intervention, negatively impacting operating results, brand and reputation, and require us to take steps to reduce fraud risk, which could increase our costs. This may, in turn, put our company at greater risk to recoup.

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 ***An increase in customer defaults rates may reduce overall profitability.***

Customer default rates may be significantly affected by economic downturns or general economic conditions beyond our control and beyond the control of individual customers. In particular, loss rates on cash advances may increase due to general economic and business factors such as prevailing interest and rates, the rate of unemployment, the level of consumer and business confidence, commercial real estate values, the value of the U.S. dollar, energy prices, changes in consumer and business spending, the number of personal bankruptcies, disruptions in the credit markets and other factors. If customer default rates increase beyond forecast levels, this will harm merchant cash advance businesses reputation, operating results, and profitability, which will ultimately affect the Company's own business operations and investors may lose all or part of their investment.

 ***Allowance for losses is determined based upon both objective and subjective factors and may not be adequate to absorb losses. Merchants may fail to deliver cash advanced income in full.***

We maintain a reserve for such losses by establishing an allowance for losses, the increase of which results in a charge to its earnings as a provision for losses. We have established an evaluation process designed to determine the adequacy of those allowances for losses. While this evaluation process will use historical and other objective information, the forecasts and establishment of losses are also dependent on our subjective assessment based upon our experience and judgment. Actual losses are difficult to forecast, especially if such losses stem from factors beyond historical experience. As a result, there can be no assurance that our allowance for losses will be comparable to that of traditional banks subject to regulatory oversight or sufficient to absorb losses or prevent a material adverse effect on business, financial condition, and results of operations.

 ***Investors have risks from inflation and from deflation***

As a result of inflation, there has been a history of increasing taxes, energy and labor costs, and other operating and capital expenses. If the revenues generated by operations are not sufficient to pay fixed obligations, we may attempt to increase rates on cash advance income in addition to attempting to reduce operating expenses. However, competition may preclude such increases. On the other hand, deflation is likely to cause rates to decrease faster than expenses decrease. Inflation or deflation could have a material adverse effect on merchant cash advance businesses and our business, results of operations, and financial condition.

***Merchant cash advance businesses may be unable to collect cash advance income on the cash advances made to customers.***

Merchant cash advance ("MCA") businesses, such as FAVO Capital, provide revenue-based financing to small and medium-sized businesses ("SMBs") by purchasing a portion of their future receipts at a discount. Our debtors are primarily SMBs in industries such as restaurants, construction, physical fitness and accounting services, which use cash advances to manage working capital, purchase inventory, fund marketing, or address short-term liquidity needs.

As an MCA provider, we advance funds to these SMBs in exchange for an agreed-upon percentage of their daily receipts until the purchased receipts have been fully remitted. Payments are typically collected through daily Automated Clearing House ("ACH") debits or, in some cases, through credit card split processing. Because MCA businesses are not banks, we do not have direct access to the ACH network and instead rely on third-party FDIC-insured depository institutions and payment processors to disburse funds to merchants and collect scheduled payments on our behalf.

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Although we build redundancies by working with multiple banks and service our ability to collect receipts could be impaired if these institutions or processors cease providing services, experience operational disruptions, or terminate their agreements with us. While we would seek to transition to alternative providers, there can be no assurance that such transition would be seamless. Any inability to collect receipts on a timely basis could materially impact our revenue, cash flows, and operating results.

Our role within the MCA process is to (i) originate and underwrite advances directly, (ii) service and collect on those advances through our processing partners, and (iii) in the case of syndicated fundings, manage collections on behalf of ourselves and our syndication partners. As such, disruptions in our ability to collect MCA receipts directly affect both our own portfolio and our servicing obligations to syndication partners.

***We may not be able to successfully implement our growth strategy on a timely basis or at all.***

Our future growth, profitability and cash flows depend upon our ability to successfully implement our growth strategy, which, in turn, is dependent upon a number of factors, including our ability to:

• build
 on our success in financial solutions, such as our merchant cash advance (or similar) offerings;

• accelerate
 expansion by introducing new financial solutions to our product portfolio;

• continue
 to establish a footing in the real estate markets; and

• selectively
 pursue and integrate strategic and value-enhancing acquisitions.

There can be no assurance that we can successfully achieve any or all of the above initiatives in the manner or time period that we expect. Further, achieving these objectives will require investments which may result in short-term costs without generating any current revenue and therefore may be dilutive to our earnings. We cannot provide any assurance that we will realize, in full or in part, the anticipated benefits we expect our strategy will achieve. The failure to realize those benefits could have a material adverse effect on our business, financial condition and results of operations.

***The merchant cash advance industry is not currently pervasively regulated, however, future regulations or in the way future regulations are applied to the merchant cash advance industry could adversely affect our business.***

MCA regulation is generally not as stringent as small business loan regulation, but regulations do exist. There have been enactments in New York and California and discussions in several other states to implement regulations on the industry. State usury laws may not apply against merchant cash advance providers, but New York and California, for example, have state laws requiring merchant cash advance providers and other nonbank lenders to provide disclosures similar to those required under the Truth in Lending Act. These laws were enacted in order to create more transparency for small business borrowers surrounding their application for credit from non-conventional banking institutes.

There are also federal laws that apply to the industry. The Federal Trade Commission ("FTC"), for example, has the authority to sue merchant cash advance providers that engage in deceptive or predatory lending practices. Any merchant cash advance provider that engages in unfair or deceptive trade practices can be subjected to compensatory damages, civil penalties, and a permanent injunction from marketing, selling, or collecting merchant cash advances.

The Gramm-Leach-Bliley Act ("GLBA") has provisions that prohibit creditors from making false statements to obtain a customer's bank account information. These laws apply to merchant cash advance providers.

Section 1071 of the Dodd-Frank Wall Street Reform and Consumer Protection Act requires covered financial institutions, including merchant cash advance providers, to collect and report to the Consumer Financial Protection Bureau ("CFPB") data on small business applications for credit. The rules generally require financial institutions that originate at least 100 small business credit transactions annually to collect and report loan application, origination, and pricing information, as well as certain applicant/borrower demographic information, in a "small business lending application register." For purposes of the rules, a small business is one with no more than $5 million of gross revenues in its most recent fiscal year.

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We cannot predict whether there will be any regulations adopted either by the federal government or individual state governments with respect to the merchant cash advance industry. If any such regulations are adopted and implemented, such regulations could place restrictions on the industry that could adversely affect our business. The adoption of laws or regulations or the regulatory application or judicial interpretation of the laws and regulations applicable to the industry could adversely affect our ability to continue to operate our business. Additionally, any such regulations could make it more difficult for us to collect payments on merchant cash advances by subjecting us to additional licensing, registration and other regulatory requirements in the future or otherwise. A material failure to comply with any such laws or regulations could result in regulatory actions and lawsuits, which could have a material adverse effect on our business and financial condition.

A proceeding relating to one or more allegations or findings of violations of any such laws or regulations could result in modifications in our methods of doing business that could impair our ability to collect payments on our merchant cash advances to customers or could require us to pay damages and/or cancel the balance or other amounts owing under merchant cash advance contracts associated with any such violations. We cannot assure you that such claims will not be asserted against us. To the extent it is determined that the merchant cash advances that have made to our customers were not originated in accordance with any and all applicable laws or regulations, our results of operations could be materially adversely affected.

 ***Determination by a legislative or judicial body that a cash advance is a loan, rather than a purchase of future receipts, will adversely affect the merchant cash advance business and Company's business.***

Currently, the merchant cash advance business structures its cash advances a purchase of future receipts, rather than loans. This allows merchant cash advance businesses to avoid applying for and complying with a commercial lending license. Additionally, state usury laws are often, if not always, inapplicable. However, if a legislative or judicial body determines that the merchant cash advances are loans or should be treated as loans, the merchant cash advance business could be found to be in violation of state and federal lending regulations. A material failure to comply with any such laws or regulations could result in regulatory actions, lawsuits, and damage to the merchant cash advance business reputation, which could have a material adverse effect on its business and financial condition.

A proceeding relating to one or more allegations or findings of the merchant cash advance business violation of such laws could result in modifications in its methods of doing business or could impair its ability to collect cash advance income or could result in the requirement that merchant cash advance businesses pay damages and/or cancel the balance of cash advance income associated with such violation. The Company cannot assure you that such claims will not be asserted against merchant cash advance businesses in the future.

 ***Many of our alternative financing solutions involve borrowers about which little, if any, information is publicly available, which may impair our ability to identify borrowers able to repay our advances and adversely affect the price of our publicly traded securities.***

In pursuing our business, we often interact with privately held companies about which very little public information exists. As a result, we are frequently required to make financing decisions based on limited data, much of which is obtained directly from the merchant. To mitigate these risks, we use a combination of traditional credit bureau data, alternative data sources, and automated and AI-driven tools from third-party providers to verify bank statements, analyze cash flow, and detect potential fraud or anomalies.

Notwithstanding these processes, there are limitations. Automated and AI-driven underwriting tools may yield inaccurate or incomplete outputs, may be subject to manipulation, or may fail to detect fraudulent activity. Additionally, we depend on the accuracy and availability of third-party vendors and data sources. Disruptions, errors, or service terminations could materially impair our ability to underwrite effectively.

If we make advances to merchants that are less solvent or profitable than expected, if our AI or automation tools malfunction or are circumvented, or if third-party providers supply inaccurate or incomplete data, our loss rates may increase and our results of operations could be adversely affected, which in turn could negatively impact the trading price of our securities.

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***Failure to continue to innovate and respond to evolving technological changes may reduce demand for cash advances.***

The cash advance industry is characterized by rapidly evolving technology and frequent product introductions. Merchant cash advance businesses rely on technology to make its platform available to customers, determine the creditworthiness of cash advance applicants, and service the cash advances it makes to customers. In addition, merchant cash advance businesses may increasingly rely on technological innovation as it introduces new products, expands its current products into new markets, and continues to streamline the cash advance process. The process of developing new technologies and products is complex and if merchant cash advance businesses are unable to successfully innovate and deliver a superior customer experience, customers' demand for the merchant cash advances may decrease and the merchant cash advance business and ultimately our growth and operations may be harmed.

***Due diligence in merchant cash advance transactions is not as stringent as that of traditional loans, which presents a greater risk of fraud and inaccurate valuations.***

The required information to be provided by a merchant for a merchant cash advance is less stringent and differs from that provided for traditional capital advances and loans from institutional lenders, giving rise to numerous risks. These risks include, but are not limited to, a funder receiving fraudulent or inaccurate financial data from a merchant, entering into a transaction with a merchant who has historical and/or current credit related issues, and facing market shifts which may outdate the market research a funder uses to create its approval methodology. Although the Uniform Commercial Code governs merchant cash advance transactions as commercial transactions and provides for certain legal protections, the lack of collateral required in merchant cash advance transactions presents a risk of total and unrecoverable loss. ****

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***Our growth strategy invo*** ***lves building on our success in financial solutions, which may present risks and challenges that we have not yet experienced.***

Our financial solutions, such as our merchant cash advance (or similar) offerings, continue to become an increasingly important part of our business. Our strategy has and will continue to require significant investment in cross-functional operations and management focus, along with investment in supporting technologies and people. The availability of our financial solutions requires us to comply with different and evolving laws governing financial services, as well as the collection, storage and use of information and data, including personal data. We may incur additional costs and operational challenges in complying with these laws, and differences in these laws may cause us to operate our businesses differently in different territories. If so, we may incur additional costs and may not fully realize the investment in our expansion.

Development of new financial solutions incorporating technology is a complex process and subject to numerous uncertainties. Our success in developing such solutions will depend in part on our ability to develop them in a manner that keeps pace with continuing changes in technology, evolving industry standards, new financial solution and product introductions by competitors, changing client preferences and requirements and the interoperability of such solutions with our platform, including the platforms of companies we acquire, and third-party developed portions thereof.

In addition, we face competition from established financial solutions providers offering existing and proven financial solutions. These financial solutions providers and their financial product offerings benefit from a long history of market acceptance and familiarity as compared to our financial solutions. Potential customers for our financial solutions may be reluctant to adopt our solutions over existing solutions for a variety of reasons, such as transition costs, business disruption, or loss of functionality to which they are accustomed. Customers may also consider our solutions as inferior to similar solutions offered by our competitors. Finally, the marketability of our financial solutions we offer could be significantly affected by changes in economic or market conditions or by the adoption of new technologies and solutions. There can be no assurance that our customers will adopt our financial solutions over other competing solutions.

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If we are unable to provide a convenient and consistent experience for our customers, our ability to compete and our results of operations could be adversely affected. In addition, if the solutions we offer do not appeal to our customers, reliably function as designed, or maintain the privacy and security of customer data, we may experience a loss of customer confidence or lost revenue, which could adversely affect our reputation and results of operations.

***The markets in which we participate are highly competitive. We may not be able to compete successfully against current and future competitors.***

We face competition in various aspects of our business, and we expect such competition to intensify in the future as existing and new competitors introduce new financial solutions or enhance existing solutions. We compete against companies and financial institutions across the retail banking, financial services, consumer technology and financial technology services industries, as well as other nonbank lenders serving credit-challenged consumers, including online marketplace lenders, check cashers, point-of-sale lenders and payday lenders. We may compete with others in the market who may in the future provide offerings similar to ours, particularly companies who may provide money management, lending and other services.

We have competitors with longer operating histories, larger customer bases, greater brand recognition, greater experience and more extensive commercial relationships in certain jurisdictions, and greater financial, technical, marketing and other resources than we do. Our potential new or existing competitors may be able to develop financial products and services better received by customers or may be able to respond more quickly and effectively than we can to new or changing opportunities, technologies, regulations or customer requirements. In addition, some of our larger competitors may be able to leverage a larger installed customer base and distribution network to adopt more aggressive pricing policies or terms of service and offer more attractive sales terms or customer promotions, which could cause us to lose potential sales or to sell our financial solutions at lower prices. In addition, there are a number of companies that are not currently direct competitors but that could in the future shift their focus on our industries and offer competing products and services. There is also a risk that certain of our current customers and business partners could terminate their relationships with us and use the insights they have gained from partnering with us to introduce their own competing financial products and services. As our business evolves, the competitive pressure to innovate will encompass a wider range of financial products and services. There can be no assurance that our efforts to require new and existing customers to adopt our financial solutions will be successful and we may lose certain customers, and our operating results may be adversely affected if we are not successful in our efforts.

***The impact of worldwide economic conditions such as inflation and changes in interest rates, including the resulting effect on the operations of and spending by SMBs and on consumer spending, may adversely affect our business, operating results and financial condition.***

Our performance is subject to worldwide economic conditions and global events, including political, economic, social and environmental risks that may impact our operations or our customers' operations. Such conditions and events may adversely affect consumer confidence, consumer spending, consumer discretionary income or changes in consumer purchasing habits. Deterioration in general economic conditions, including any rise in unemployment rates, inflation and increases in interest rates, have adversely affected in the past and may in the future adversely affect consumer spending, consumer debt levels and payment card usage, and as a result, have adversely affected in the past and may in the future adversely affect our financial performance by reducing the number of transactions or average purchase amount of transactions processed using our financial solutions. Many of the customers that use our financial solutions are SMBs and many are also in the entrepreneurial stage of their development. SMBs may be disproportionately affected by the aforementioned economic conditions or economic downturns, especially if they sell discretionary goods. SMBs may also be disproportionately affected by other economic conditions, including labor shortages and global supply chain issues. SMBs frequently have limited budgets and may choose to allocate their spending to items other than our platform, especially in times of economic uncertainty or recessions. Economic and geopolitical uncertainties, including the Israel-Hamas war and Russia's invasion of Ukraine may further amplify such risks.

Weakening economic conditions may also adversely affect third parties, including suppliers and partners, with whom we have entered into relationships and upon whom we depend in order to operate and grow our business. Uncertain and adverse economic conditions may also lead to increased write-offs of our receivables, and refunds and chargebacks or potential losses to our merchant cash advance program, any of which could adversely affect our business.

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***Our business could be harmed if we fail to manage our growth effectively and efficiently.***

The growth we have experienced in our business places significant demands on our operational infrastructure. The scalability and flexibility of our financial solutions depends on the functionality of our technology and network infrastructure and its ability to handle increased demand. Any problems with the transmission of increased data and requests could result in harm to our brand or reputation. Moreover, as our business grows, we will need to devote additional resources to improving our operational infrastructure and continuing to enhance its scalability in order to maintain the performance of financial offerings.

To support our growth, we expect to make sales and marketing expenditures to increase sales of our financial products and increase awareness of our brand. A significant portion of our investments in our sales and marketing and research and development activities will precede the benefits from such investments, and we cannot be sure that we will receive an adequate return on our investments.

Our growth has placed, and will likely continue to place, a significant strain on our managerial, administrative, operational, financial and other resources. We intend to further expand our overall business with no assurance that our revenues will continue to grow. As we grow, we will be required to continue to improve our operational and financial controls and reporting procedures, and we may not be able to do so effectively. Furthermore, some members of our management do not have significant experience managing a large business operation, so our management may not be able to manage such growth effectively. In managing our growing operations, we are also subject to the risks of over-hiring and/or overcompensating our employees and over-expanding our operating infrastructure. As a result, we may be unable to manage our expenses effectively in the future, which may negatively impact our gross profit or operating expenses.

As a result of our growth, some of our employees have been with us for a short period of time, and many have joined in a remote work environment. As we continue to grow, we must effectively integrate, develop and motivate employees. We may find it difficult to maintain our corporate culture, which could limit our ability to innovate and operate effectively. Any failure to preserve our culture could also negatively affect our ability to recruit and retain personnel, to continue to perform at current levels or to execute on our business strategy effectively and efficiently.

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***Our brand is int*** ***egral to our success. If we fail to effectively maintain, promote and enhance our brand, our business and competitive position may be harmed.***

We believe that maintaining, promoting and enhancing brands is critical to expanding our business. Maintaining and enhancing our brand will depend largely on our ability to provide high-quality, well-designed, useful, reliable and innovative financial solutions, which we may not do successfully.

Errors, defects, data breaches, disruptions, outages or other performance problems with our technology or related services, including with third-party applications, may harm our reputation and brand. We may introduce new financial solutions or terms of service that SMBs do not like, which may negatively affect our brand. Additionally, if our customers have a negative experience using our financial solutions, such an experience may affect our brand, especially as we try and gain market acceptance.

Any unfavorable media coverage or negative publicity about our industry or our company, including, for example, publicity relating to our financial products, our privacy and security practices, our product changes, our financial reporting, pending or threatened litigation, regulatory activity, or the actions of our partners or our customers, could seriously harm our reputation, even if inaccurate or misleading. Such negative publicity could also adversely affect the size, demographics, engagement, and loyalty of our customers and result in decreased revenue, which could seriously harm our business.

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We believe that the importance of brand recognition will increase as competition in our market increases. In addition to our ability to provide reliable and useful solutions at competitive prices, successful promotion of our brand will depend on the effectiveness of our marketing efforts. The success of our brand promotion efforts is partly dependent on our visibility on third-party advertising platforms and changes in the way these platforms operate or changes in their terms or data use practices could make marketing and promotion of our platform and brand more expensive and difficult. Our efforts to market our brand have involved significant expenses. Our marketing spend may not yield increased revenue, and even if it does, any increased revenue may not offset the expenses we incur in building and maintaining our brand.

***Our growth depends in p*** ***art on the success of our strategic relationships with third parties.***

We anticipate that the growth of our business will continue to depend on third-party relationships, including strategic partnerships and relationships with our service providers and suppliers, including syndicate brokers, underwriters, brokers, real estate professionals and other partners. In addition to growing our third-party partner ecosystem, we have entered into agreements with, and intend to pursue additional relationships with, other third parties, such as technology and content providers. Some of the third parties that sell our services have direct contractual relationships with our customers, and in these circumstances, we risk the loss of such customers if those third parties fail to perform their contractual obligations, including in the event of any such third party's business failure. These third-party providers may choose to terminate their relationship with us or to make material changes to their businesses, products or services in a manner that is adverse to us.

***Security breaches, denial of service attacks, or other hacking and phishing attacks on our systems or other security breaches, including internal security failures, could harm our reputation or subject us to significant liability, and adversely affect our business and financial results.***

We operate in an industry that is prone to cyberattacks. Failure to prevent or mitigate security breaches and improper access to or disclosure of our data, customer data, or the data of their consumers, could result in the loss or misuse of such data, which could harm our business and reputation. The security measures we have integrated into our internal networks and platforms are designed to prevent or minimize security breaches but may not function as expected or may not be sufficient to protect our internal networks and platforms against certain attacks. In addition, incidents can originate on our partners' websites or systems, which can then be leveraged to access our website or systems, further preventing our ability to successfully identify and mitigate an attack. Threat actors are rapidly evolving the techniques used to sabotage or to obtain unauthorized access to networks in which data is stored or through which data is transmitted. As a result, we may be unable to anticipate these techniques or implement adequate preventative measures to prevent an electronic intrusion into our networks. While we have established cyberattack remediation plans to guide us in triaging and responding to such attacks, there can be no assurance that the measures set forth under such plan will be adequate in all circumstances nor that they will be effective in mitigating, or allowing us to recover from, the effects of such attacks. While we do not yet have insurance coverage and while we plan to obtain coverage in the near future, any coverage we acquire may be insufficient to compensate us for all liabilities that we may incur.

Our customers' storage and use of data to operate their businesses and deliver services to their consumers is essential to their use of our platform, which stores, transmits and processes our customers' proprietary information and personal information relating to them, their employees and their consumers. If a security breach were to occur, as a result of third-party action, employee error, breakdown of our internal security processes and procedures, malfeasance or otherwise, and the confidentiality, integrity or availability of our customers' data were disrupted, we could incur significant liability to our customers, to partners and to individuals whose information was being stored by our customers, and our platform may be perceived as less desirable, which could negatively affect our business and damage our reputation.

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Our platform and third-party applications available on, or that interface with, our platform have been and, in the future, may be subject to distributed denial of service attacks ("DDoS"), a technique used by hackers to take an internet service offline by overloading its services. Since techniques used to deliver DDoS attacks are evolving, we may be unable to implement adequate preventative measures or stop DDoS attacks or security breaches while they are occurring. We cannot guarantee that applicable recovery systems, security protocols, network protection mechanisms and other procedures are or will be adequate to prevent network and service interruption, system failure or data loss. In addition, computer malware, viruses, ransomware, extortion, and hacking and phishing attacks or social engineering incidents by third parties are prevalent in our industry. We have experienced such attacks and security incidents in the past and may experience them in the future. For example, in Fiscal 2024 we were the target of frequent phishing and distributed DDoS attempts. Any actual or perceived DDoS attack or security breach could damage our reputation and brand, expose us to a risk of litigation and possible liability and require us to expend significant capital and other resources to respond to and/or alleviate problems caused by the DDoS attack or security breach.

Moreover, our platform and third-party applications available on, or that interface with, our platform could be breached if vulnerabilities in our platform or third-party applications are exploited by unauthorized third parties or due to employee error, breakdown of our internal security processes and procedures, malfeasance, or otherwise. If these third parties fail to adhere to adequate data security practices, or in the event of a breach of their networks, our own and our customers' data may be improperly accessed, used or disclosed. Further, threat actors may attempt to fraudulently induce employees or customers into disclosing sensitive information such as usernames, passwords or other information or otherwise compromise the security of our internal networks, electronic systems and/or physical facilities in order to gain access to our data or our customers' data. As a result of our increased visibility, the size of our customer base, and the increasing amount of confidential information we process, we believe that we are increasingly a target for such breaches and attacks. This threat may intensify in the event of retaliatory cyberattacks stemming from geopolitical events such as Russia's invasion of Ukraine. In addition to our own platform and applications, some of the third parties we work with may receive information provided by us, by our customers, or by our customers' consumers through web or mobile applications. If these third parties fail to adhere to adequate data security practices, or in the event of a breach of their networks, our own and our customers' data may be improperly accessed, used or disclosed.

Some jurisdictions have enacted laws requiring companies to notify individuals and authorities of data security breaches involving certain types of personal or other data and our agreements with certain customers and partners require us to notify them in the event of a security incident. Similarly, if our suppliers experience data breaches and do not notify us or honor their notification obligations to authorities or users, we could be held liable for the breach. We may not be in a position to assess whether a data breach at one of our suppliers would trigger an obligation or liability on our part. Such mandatory disclosures are costly, could lead to negative publicity, and may cause our customers to lose confidence in the effectiveness of our data security measures. Moreover, if a high-profile security breach occurs with respect to another SaaS provider, customers may lose trust in the security of the SaaS business model generally, which could adversely impact our ability to retain revenue from existing customers or attract new ones. Similarly, if a high-profile security breach occurs with respect to a retailer or eCommerce platform, customers may lose trust in eCommerce more generally, which could adversely impact our customers' businesses. Any of these events could harm our reputation or subject us to significant liability, and materially and adversely affect our business and financial results.

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***System failures, interruptions*** ***, delays in service, catastrophic events, inadequate infrastructure and resulting interruptions in the availability or functionality of our platform could harm our reputation or subject us to significant liability and adversely affect our business and financial results.***

Our brand, reputation and ability to attract, retain and serve our customers are also dependent upon the reliable performance of our platform, including our underlying technical infrastructure. Our platform is mission critical for our customers who rely on it to manage their businesses, and the data collected in connection therewith, including transaction records, information about inventory and customers and other important business information and data. Our systems, those of our third- service providers may experience service interruptions, human error, earthquakes, hurricanes, floods, fires, natural disasters, power losses, disruptions in telecommunications services, fraud, military or political conflicts, terrorist attacks and other geopolitical unrest, cyberattacks or disruptions, computer viruses, ransomware, malware or other events. Our systems are also subject to break-ins, sabotage, and acts of vandalism.

***Interruptions or other issues in the proper functioning of or upgrades to our information technology systems could cause disruption to our operations.***

Our information technology systems require periodic modifications, upgrades, and replacement that subject us to costs and risks, including potential disruption to our internal control structure, substantial capital expenditures, additional administration and operating expenses, retention of sufficiently skilled personnel or outside firms to implement and operate existing or new systems, diversion of management's attention from other aspects of our business, and other risks and costs of delays or difficulties in transitioning to new or modified information technology systems or of integrating new or modified information technology systems into our current technical infrastructure.

We are continually improving and upgrading our information technology systems, including systems of the companies we have acquired, which acquired systems we have integrated to varying degrees. Implementation of new information technology systems is complex, expensive, and time-consuming. If we fail to timely and successfully implement new information technology systems, or improvements or upgrades to existing or integrated information technology systems, or if such information technology systems do not operate as intended, this could have an adverse impact on our business, internal controls (including internal controls over financial reporting), results of operations and financial condition.

We heavily rely on our information technology systems to manage our various business operations and regulatory compliance. Our technical infrastructure has in the past and may in the future be subject to damage or interruption from a variety of sources, including power outages, computer and telecommunications failures, fraud, computer viruses, cybersecurity breaches, vandalism, severe weather conditions, catastrophic events, military or political conflicts, terrorism, and human error. If our information technology systems are damaged, fail to function properly, or otherwise become compromised or unavailable, we may incur substantial costs to repair or replace them, and we may experience loss of critical data and interruptions or delays in our ability to perform critical functions, which could adversely affect our business, results of operations and financial condition.

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***We store personal and other information of our partners, our customers and their consumers and our employees. If the security of this information is compromised or is otherwise accessed without authorization or is perceived to be compromised or accessed without authorization, our reputation may be harmed, and we may be exposed to liability and loss of business.***

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We store personal information and other confidential information of our partners and our customers and may also store credit card information of our customers. We also collect and maintain personal information of our employees. We do not regularly monitor or review the content that our customers upload and store, or the information provided to us through the applications integrated with our platform, and, therefore, we do not control the substance of the content hosted within our platform, which may include personal information. Additionally, we use third-party service providers and sub processors to help us deliver services to customers and their consumers. These service providers and sub processors may store personal information, credit card information and/or other confidential information.

We have in the past experienced and may in the future experience successful attempts by third parties to obtain unauthorized access to the personal information of our partners, our customers and our customers' consumers, and events or situations as a result of which this information was or could be exposed through human error, malfeasance or otherwise. The unauthorized or inadvertent release or access, or other compromise of this information could have a material adverse effect on our business, financial condition and results of operations. Even if such a data breach were to affect one or more of our competitors or our customers' competitors, rather than us, the resulting consumer concern could negatively affect our customers and/or our business.

We are also subject to federal, state, provincial and foreign laws regarding cybersecurity and the protection of data. The regulatory framework in Canada, the United States, Europe and many other jurisdictions in respect of privacy issues is constantly evolving and is likely to remain uncertain for the foreseeable future. Numerous laws and regulations, including Canada's Personal Information Protection and Electronic Documents Act, Québec's Law 25, the European Union's General Data Protection Regulation ("GDPR"), the UK's General Data Protection Regulation, the California Consumer Privacy Act as modified by the California Consumer Privacy Rights Act, the Virginia Consumer Data Protection Act, the Colorado Privacy Act, the Connecticut Data Privacy Rights Act, and the Utah Consumer Privacy Act, have detailed requirements concerning the collection, use, disclosure, transfer, safeguarding, and retention of personal data and grant individuals certain rights related to their personal data.

As of early 2025, at least 20 states have passed comprehensive privacy laws that go beyond breach notification to regulate how businesses collect, use, and protect personal data. These laws grant consumers rights like access, deletion, and opting out of data sales, while requiring "reasonable" security measures. Newer laws in states like Texas (Texas Data Privacy and Security Act, effective 2024) and New Jersey (effective 2025) follow this model, with variations in scope and enforcement.

The enactment of such laws could have potentially conflicting requirements that would make compliance challenging. Restrictions imposed by such laws may also impair our merchant's ability to sell or market their products or adversely impact our product development efforts, which could affect our operating results.

In addition to the foregoing, a breach of cybersecurity and data protection laws could result in regulatory investigations, reputational damage, orders to cease or change our data processing, enforcement notices, and / or assessment notices (for a compulsory audit). We may also face civil claims including representative actions and other class action type litigation (where individuals have suffered harm), potentially amounting to significant compensation or damages liabilities, as well as associated costs, diversion of internal resources, and reputational harm.

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The interpretation and application of the above laws are often uncertain and such laws may be interpreted and applied in a manner inconsistent with our current policies and practices or require us to make changes to our platform. Additionally, laws in some jurisdictions, as well as our contracts with certain customers, require us to use industry-standard or reasonable measures to safeguard personal information or confidential information, and thereby mitigate the risk of a security incident. These laws and contractual obligations, which tend to focus on individuals' financial and payment related information, are increasingly relevant to us, as we have started to process more information from our customers' consumers through our platform.

Our failure to comply with legal or contractual requirements around the security of personal information could lead to significant fines and penalties imposed by regulators, as well as claims by our partners, our customers and their consumers, our employees or other relevant stakeholders. These proceedings or violations could force us to spend money in defense or settlement of these proceedings, result in the imposition of monetary liability or injunctive relief, diversion of management's time and attention, increase our costs of doing business, and materially adversely affect our reputation and the demand for our solutions.

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***Significant increases in the cost or decreases in the availability of the insurance we maintain could adversely impact our financial condition.***

 **

To protect the Company against various potential liabilities, we maintain a variety of insurance programs, including key man insurance, workers' compensation and omissions and error insurance. We may reevaluate and change the types and levels of insurance coverage that we purchase. We are self-insured when insurance is not available or not available at reasonable premiums. We are currently looking into acquiring general liability insurance, and cyber security insurance. There are types of losses we may incur but against which we cannot be insured or which we believe are not economically reasonable to insure, such as losses due to acts of war, employee and certain other crime, certain wage and hour and other employment-related claims, including class actions, actions based on certain customer protection laws, and some natural and other disasters or similar events. If we incur such losses and they are material, our business could suffer. Risks associated with insurance plans include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Insurance
 costs could increase significantly, or the availability of insurance may decrease, either
 of which could adversely impact our financial condition;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Deductible
 or retention amounts could increase, or our coverage could be reduced in the future and to
 the extent losses occur, there could be an adverse effect on our financial results depending
 on the nature of the loss and the level of insurance coverage we maintained;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Insurance
 may not be available to us at an economically reasonable cost, or our insurance may not adequately
 cover our liability in connection with claims brought against us; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• As
 our business inherently exposes us to claims, we may become subject to claims for which we
 are not adequately insured. Unanticipated payment of a large claim may have a material adverse
 effect on our business.

***Because we are a "Smaller Reporting Company," we may take advantage of certain scaled disclosures available to us, resulting in holders of our securities receiving less company information than they would receive from a public company that is not a Smaller Reporting Company.***

We are a "smaller reporting company" as defined in the Exchange Act. As a smaller reporting company, we may take advantage of certain of the scaled disclosures available to smaller reporting companies and will be able to take advantage of these scaled disclosures for so long as (i) our voting and non-voting common stock held by non-affiliates is less than $250 million measured on the last business day of our second fiscal quarter, or (ii) our annual revenue is less than $100 million during the most recently completed fiscal year and our voting and non-voting common stock held by non-affiliates is less than $700 million measured on the last business day of our second fiscal quarter. To the extent we take advantage of any reduced disclosure obligations, it may make it harder for investors to analyze the Company's results of operations and financial prospectus in comparison with other public companies.

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 ***Our reliance on syndication partners and contractual arrangements for funding MCAs exposes us to risks if such partners reduce participation, fail to perform, or terminate agreements***

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A portion of our revenue is generated through syndication transactions, where third-party investors co-fund merchant cash advances. In these transactions, we typically act as the servicer under syndication agreements, which entitles us to servicing fees, retained participations, and profit allocations after repayment of the advance amount. These syndication arrangements expand our funding capacity but also create dependence on external partners whose decisions and capital commitments are outside our control.

If our syndication partners were to reduce their participation levels, delay capital deployment, terminate agreements, or demand terms less favorable to us, our revenue from syndication activities could be materially reduced. Because these arrangements are often concentrated among a limited number of investors, we are exposed to partner concentration risk. In addition, our reliance on contractual agreements creates the possibility of disputes regarding servicing performance, allocation of profits, or interpretation of key provisions. Any disruption in these relationships or disputes under these agreements could impair our ability to originate and service merchant cash advances at scale, reduce our revenue, and materially and adversely affect our business and results of operations.

 ***Our dependence on ISOs and other third-party distribution partners for a significant portion of originations subjects us to risks relating to partner performance, regulatory compliance, customer quality, and potential concentration of deal flow.***

We rely on independent sales organizations (ISOs) and other third-party distribution partners to originate a significant percentage of our merchant applications. Our agreements with ISOs typically provide for referral compensation based on funded amounts. If a material number of these ISOs were to cease submitting applications to us, shift their business to competitors, or demand higher compensation, our funded deal volume could decline, and our customer acquisition costs could increase. Because our internal business development resources are limited, we may not be able to quickly replace lost ISO-originated volume with direct originations, which could negatively affect our growth and revenues.

In addition, ISOs operate as independent contractors and are not subject to our direct supervision or control, which exposes us to operational and compliance risks. Misconduct, misrepresentation, or non-compliance by an ISO could harm our reputation, lead to regulatory scrutiny, or result in legal claims against us. Further, increased regulatory attention on ISOs and broker practices in the alternative lending industry could impose new compliance obligations on us as the funder, which may increase costs or reduce the attractiveness of ISO-originated transactions.

Our dependence on third-party ISOs and distribution partners therefore creates both financial and operational risks. If we are unable to effectively manage these relationships, ensure compliance with applicable laws, or diversify our origination channels, our business, financial condition, and results of operations could be materially and adversely affected.

 ***Our use of AI, machine learning, and automated tools, together with reliance on third-party data providers, exposes us to risks involving accuracy, operational continuity, data security, and regulatory scrutiny, any of which could materially affect our ability to underwrite, detect fraud, and manage credit risk.***

We rely on artificial intelligence ("AI"), machine learning ("ML"), and automation tools, in combination with human oversight, to support our underwriting, fraud detection, and data analysis processes. While we believe these technologies improve efficiency, reduce fraud risk, and enhance credit decision-making, they also introduce risks that could materially and adversely affect our business, financial condition, and results of operations.

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Our underwriting process depends on sensitive data provided by merchants, including bank statements, financial records, tax filings, and transactional histories. This information is analyzed using AI-enabled tools that structure, authenticate, and evaluate the data. Although we implement strict safeguards, including encryption, access controls, audit trails, and limiting the use of such data exclusively to underwriting and servicing activities, there is a risk that these systems could be subject to unauthorized access, cyberattacks, or data breaches. Any such event could expose us to liability under data privacy laws, regulatory enforcement actions, reputational harm, and loss of customer confidence.

We also rely on third-party providers to aggregate and authenticate financial data, provide credit bureau information, and detect potential fraud. If these providers experience service disruptions, errors, inaccuracies, or terminate their services to us, our ability to process applications efficiently could be materially impaired. Because AI and ML models require continual updates to remain accurate, reliance on third parties introduces the risk that errors in their models could lead to inaccurate underwriting decisions, higher default rates, or lost business opportunities.

In addition, AI-driven analysis is based on patterns and assumptions derived from historical data. These models may fail to predict merchant behavior in changing macroeconomic conditions, during unexpected events, or when applied to businesses with limited operating histories. If our reliance on AI or ML produces inaccurate risk assessments, we could experience increased loss rates or fail to identify fraudulent applications.

Finally, while our AI-enabled underwriting process is designed to accelerate decision-making compared to traditional lenders, it is subject to significant regulatory scrutiny. Regulators may adopt new rules regarding the use of AI, ML, or alternative data in underwriting that could require changes to our processes, increase compliance costs, or limit our ability to use certain data sources. Any such developments could adversely affect our operations and results.

 ***Our debt financing arrangement with Stewards International Funds PCC (on behalf of the Stewards Private Credit Fund) increases our fixed debt obligations and may result in shareholder dilution upon the future exercise of associated warrants.***

On September 1, 2025, we entered into a financing arrangement with Stewards International Funds PCC (on behalf of the Stewards Private Credit Fund) pursuant to which we may raise up to $50 million through the issuance of unsecured and unsubordinated debt notes (the "Favo Debt Notes"). While this financing provides us with additional capital resources, it also introduces risks. The Favo Debt Notes carry a fixed annual interest rate of 8.0% and mature in August 2030. Servicing this debt will require ongoing cash interest payments, which may limit the funds available for operations, growth initiatives, or other strategic investments. Because the notes are unsecured, in the event of financial distress we would remain fully liable for repayment without the benefit of collateral-based restructuring flexibility.

In connection with the issuance of the Favo Debt Notes, we also agreed to issue warrants exercisable for ordinary shares at a fixed price of $0.76 per share. Although the warrants are subject to a delayed exercise period, commencing no earlier than 12 months following an IPO or the maturity date, whichever is later, the eventual exercise of these warrants could result in dilution to existing shareholders. Furthermore, while the warrants are structured to minimize dilution around the time of our planned public offering, investor perception of potential dilution may nevertheless impact the trading price of our common stock.

The proceeds from this financing are required to be used exclusively for (i) refinancing existing debt, including obligations maturing in June 2026 that currently carry an effective interest rate of approximately 15%, and (ii) funding the Company's general operational needs. The Favo Debt Notes are unsecured and unsubordinated obligations of the Company and are not secured against any particular assets. While this structure provides immediate interest savings and reduces our overall cost of capital, it does not generate incremental discretionary growth capital. If we are unable to refinance or repay the remaining portion of our indebtedness as it comes due, or if future financing is not available on acceptable terms, our liquidity and ability to execute our business strategy could be materially and adversely affected.

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 **Risks Related to the 1818 Park Acquisition and Our Real Estate Business and Industry**

 ***Our high leverage, upcoming loan maturity, and dependence on refinancing expose us to significant risks, including increased sensitivity to property performance and interest rates, and the possibility that we may be unable to refinance on acceptable terms or may be forced to sell the property under adverse conditions.***

 

Block 40, LLC, the entity through which we own 1818 Park, has a senior secured mortgage loan expected to be approximately $73.6 million by quarter-end. This loan matures on June 1, 2026. Our level of indebtedness increases our financial leverage and magnifies the impact that adverse changes in property operations, market conditions, or interest rates may have on our financial condition and results of operations. A high degree of leverage reduces our flexibility to respond to changing business and economic conditions, limits our ability to fund capital expenditures or other operational needs, and increases the risk of default if property-level cash flows decline.

Because the loan matures in less than one year, we will be required to either repay or refinance this indebtedness. Our ability to refinance the mortgage on acceptable terms will depend on numerous factors, many of which are outside our control, including the appraised value and performance of the property, the level of interest rates at the time of refinancing, credit market conditions, and lender appetite for real estate exposure in our markets. If we are unable to refinance on acceptable terms, we may be required to contribute additional equity, restructure the loan on unfavorable terms, or sell the property under distressed conditions, any of which could materially and adversely affect our liquidity, financial condition, and results of operations.

Furthermore, the mortgage is secured by 1818 Park, and a failure to meet our debt service obligations could result in foreclosure, which would cause us to lose the property and its associated income streams. Even if refinancing is available, rising interest rates or changes in lending standards could result in materially higher debt service costs, further constraining cash flows available for distribution or reinvestment.

 ***Our exposure to floating interest rates increases our sensitivity to changes in market rates, and rising interest rates could significantly increase our debt service costs, reduce cash flow, and adversely affect our financial condition.***

  ****

While we have entered into an interest rate cap agreement that provides protection against increases in one-month SOFR above 4% on $73.6 million of notional principal through to 1 July 2026, this protection is limited in both duration and scope. The cap only applies to the SOFR index and does not cover the credit spread we are required to pay under our loan. Moreover, once the cap expires, we will be fully exposed to prevailing floating rates unless we are able to secure new hedging protection, which may be more costly or unavailable on acceptable terms. If benchmark interest rates increase materially, or if replacement protection is unavailable after the cap's termination, our debt service obligations could rise significantly, reducing our cash flow available for operations, impairing our ability to meet our debt covenants, and adversely affecting our financial condition and results of operations.

In addition, the need to refinance our mortgage loan upon maturity exposes us to further interest rate risk, as prevailing rates at the time of refinancing may be significantly higher than current levels. A sustained increase in market interest rates could therefore reduce the attractiveness of 1818 Park as an investment, depress its valuation, and adversely affect our overall financial condition and results of operations.

 

 

 ***Our ability to generate rental income depends on maintaining high occupancy levels and stable tenant performance, and any decline in occupancy, increased lease turnover, or tenant defaults could reduce cash flows and adversely affect our financial condition.***

 

The success of our investment in 1818 Park, and of our broader real estate strategy, depends heavily on our ability to attract and retain tenants on favorable terms. Rental income constitutes the primary source of cash flow for servicing debt and funding operating expenses. If occupancy levels decline due to competitive properties, unfavorable market conditions, or tenant relocations, we may be unable to generate sufficient revenue to cover our costs.

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In addition, tenants may fail to perform under their leases for a variety of reasons, including financial difficulties, bankruptcy, or broader economic downturns. Tenant defaults or non-renewals would require us to incur additional leasing costs, offer rent concessions, or spend significant capital on tenant improvements in order to attract replacement tenants, all of which could materially reduce our cash flows. Even if we are able to re-lease space, there is no assurance that new tenants will pay rental rates equal to or greater than those paid by prior tenants, or that new leases will not include more burdensome terms.

Furthermore, high turnover in occupancy not only increases leasing and marketing costs but also creates potential downtime between tenants, during which no rental income is generated. A sustained decline in occupancy, or the loss of one or more significant tenants, would adversely affect our ability to meet debt service obligations, reduce cash available for distribution, and impair the value of our properties. These risks are heightened by the concentration of income from a limited number of tenants, making us more vulnerable to the performance and creditworthiness of those tenants than if we had a more diversified tenant base.

 ***A significant portion of our rental income is derived from a limited number of tenants, and if these tenants experience financial difficulties, default on their leases, or choose not to renew, our revenues could be materially and adversely affected.***

  ****

Our rental revenue at 1818 Park, and potentially at other properties we may acquire, is concentrated among a limited number of tenants. As a result, the financial performance of a small group of tenants has a disproportionate impact on our overall cash flow and our ability to meet debt service obligations. If any of these tenants were to experience financial distress, bankruptcy, or operational challenges, they could seek to renegotiate lease terms, delay or withhold payments, or default altogether, materially reducing our revenue.

Even if tenants remain in good financial condition, we are subject to renewal risk at lease expiration. Tenants may elect not to renew their leases for reasons outside of our control, such as relocation, downsizing, or changes in their business strategy. Replacing a departing tenant could require us to offer significant lease concessions, incur material tenant improvement costs, or accept lower rental rates, any of which would negatively affect our cash flow. Additionally, periods of vacancy between tenants would generate no rental income, increasing our reliance on reserves or other sources of liquidity.

Given the limited number of tenants, the loss or default of even one major tenant could materially and adversely affect our results of operations, financial condition, and ability to satisfy debt obligations. This concentration risk reduces the diversification of our income stream and makes us more vulnerable to tenant-specific risks than a portfolio with a broader tenant base.

 ***Our financial performance is heavily influenced by local market conditions and broader economic trends, and adverse changes in employment levels, consumer demand, interest rates, or the supply of competitive properties could materially and adversely affect occupancy rates, rental income, and property values.***

 

The performance of 1818 Park, and any other properties we may acquire, is closely tied to conditions in the surrounding local market as well as broader national and regional economic trends. Local employment levels, population growth, and consumer spending patterns directly affect demand for both residential and commercial space within our properties. An increase in unemployment, a decline in consumer demand, or other adverse economic events in our market could lead to reduced demand for rental units, lower rental rates, and higher vacancy levels.

In addition, interest rates and capital market conditions affect not only the cost of our financing but also the purchasing power and financing ability of prospective tenants and buyers. Rising interest rates or tightening credit conditions may reduce tenant demand, constrain our ability to refinance debt, and lower property valuations. Moreover, increased supply of competitive residential or mixed-use properties in the same market could create downward pressure on occupancy levels, limit our ability to raise rents, and force us to offer greater concessions to attract and retain tenants.

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Because our real estate portfolio is not widely diversified across geographic regions, negative developments in the local economy or broader economic environment could have a disproportionately adverse effect on our business, results of operations, and financial condition.

 ***We may require additional capital to support operations, fund improvements, or meet debt service obligations, and if we are unable to generate sufficient cash flow from the property or access financing on favorable terms, our liquidity could be constrained, forcing us to defer capital projects, seek dilutive equity, or dispose of assets under unfavorable conditions.***

 

The successful operation of 1818 Park requires sufficient liquidity to cover property-level operating expenses, debt service obligations, and periodic capital expenditures, including maintenance, renovations, or tenant improvements. If rental income and other cash flows generated by the property are insufficient, we may need to secure additional capital through borrowings, equity issuances, or asset sales. Our ability to obtain additional financing is subject to numerous factors, including the performance of the property, prevailing interest rate and credit conditions, the strength of the commercial real estate market, and our overall financial condition.

There can be no assurance that financing will be available on acceptable terms, or at all. If we are unable to refinance existing debt at maturity, raise additional debt or equity capital, or sell non-core assets on favorable terms, we may be forced to defer necessary capital projects, reduce operating flexibility, issue additional equity securities at prices that may be dilutive to existing stockholders, or dispose of assets under adverse market conditions, potentially at values below their carrying amounts. Any such outcome could materially and adversely affect our business, liquidity, results of operations, and financial condition.

 ***Our ownership and operation of 1818 Park exposes us to property-specific risks, including physical condition issues, unanticipated capital expenditures, changes in local market demand, competition from nearby properties, and compliance with zoning, building, and environmental regulations, any of which could increase costs, reduce occupancy, or adversely affect the value and cash flow of the property.***

 

Owning and operating 1818 Park involves risks unique to the property itself. The physical condition of the building may require ongoing repairs, capital expenditures, or upgrades that are more extensive than originally anticipated, particularly as the property ages or as building systems deteriorate. Unforeseen maintenance needs or structural issues could significantly increase operating costs and disrupt tenant occupancy.

In addition, the property's financial performance depends on local market dynamics, including demand for rental units, competition from newly developed or nearby properties, and demographic or economic shifts that may affect tenant demand. If competing properties offer more attractive amenities, pricing, or locations, 1818 Park could experience reduced occupancy or require rent concessions, thereby decreasing revenues.

The property is also subject to extensive regulation, including zoning restrictions, building codes, health and safety requirements, and environmental laws. Failure to comply with these regulations, or changes in applicable laws, could result in increased compliance costs, restrictions on operations, delays in improvements or redevelopment efforts, or the imposition of fines and penalties.

Together, these property-specific risks could impair our ability to maintain stable occupancy, generate consistent cash flow, or preserve the long-term value of 1818 Park, which in turn could adversely affect our financial condition and results of operations.

 ***Integration of 1818 Park into our broader company operations may present challenges, including aligning property management systems, financial reporting, compliance controls, and strategic priorities, which could increase costs, divert management attention, or limit our ability to realize expected synergies.***

 

The acquisition of 1818 Park requires integration into our broader company operations, which presents operational and strategic risks. Property management systems may not seamlessly align with our existing platforms, potentially requiring additional investment in new technology, staff training, or third-party services. Similarly, integrating financial reporting processes and compliance controls across both our private credit and real estate divisions may be complex, time-consuming, and costly.

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In addition, integrating a large mixed-use property into our overall business strategy requires management attention and resources that could otherwise be directed toward our private credit operations or new real estate acquisitions. If our leadership is diverted from core business activities, we may experience inefficiencies, delays in execution, or reduced performance in other parts of our business.

Finally, we may not achieve the expected synergies from combining 1818 Park with our broader operations. Challenges in aligning property-level decision-making with corporate objectives, or in balancing capital allocation priorities across different business lines, may limit our ability to realize the financial and strategic benefits we anticipate. If integration costs are higher than expected or synergies fail to materialize, our financial results, cash flows, and overall growth strategy could be adversely affected.

 ***Our acquisition of 1818 Park through a stock-for-liabilities transaction and the subsequent exchange of EB-5 investor interests for equity expose us to risks related to leverage, dilution, regulatory oversight, and investor relations.***

In July 2025, we acquired Block 40, LLC, the owner of 1818 Park, through a $190 million stock-for-liabilities transaction. This acquisition required us to assume significant property-level debt and obligations, which could increase our leverage and limit our financial flexibility. If property performance declines or if real estate market conditions deteriorate, the carrying value of the asset and its contribution to our balance sheet could be adversely affected.

In addition, we initiated an offer to EB-5 investors in Block 40 to exchange their preferred membership interests for shares of our common stock. While intended to align investor interests with our long-term growth strategy, this exchange could result in shareholder dilution and potential disputes if investors challenge the terms, valuation, or tax treatment of the exchange. Further, the EB-5 program itself is subject to federal regulatory oversight, and any changes in interpretation or enforcement could affect investor participation or create compliance risks.

Taken together, the property-level debt and EB-5 exchange expose us to risks related to leverage, dilution, regulatory oversight, and investor relations, any of which could adversely affect our business, financial condition, or results of operations.

 

 ***Because we have limited operating history in real estate relative to more established participants, we may face challenges in executing and scaling our strategy, which could materially and adversely affect our results.***

 

We established our real estate division in 2025, and our operating history in this segment is limited compared to many established real estate owners, operators, and developers. As a result, we lack the depth of historical performance data, tenant relationships, operating infrastructure, and institutional knowledge that more seasoned participants rely upon when managing risk and pursuing growth. This relative inexperience may limit our ability to anticipate or respond effectively to market cycles, leasing trends, redevelopment challenges, or shifts in financing conditions.

In addition, our ability to scale our real estate platform will require significant investment in property management, leasing capabilities, compliance, and reporting systems. Building these competencies may take longer or prove more costly than anticipated. If we are unable to attract and retain the personnel, third-party partners, or systems necessary to operate at scale, our performance may lag behind competitors, reducing our ability to generate consistent rental income or execute value-enhancement strategies.

Moreover, because our broader business is rooted in private credit, there is a risk that real estate operations could be under-resourced or deprioritized relative to other initiatives, further limiting the effectiveness of our execution. If our limited operating history results in missteps in property management, capital allocation, or market selection, our financial results, growth trajectory, and reputation in the real estate market could be materially and adversely affected.

 

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 ***Because repositioning, redevelopment, or execution of our real estate investment strategy may involve construction risk, leasing challenges, regulatory delays, or cost overruns, we may not achieve anticipated returns, and our results of operations and financial condition could be materially and adversely affected.***

 

Our real estate strategy includes repositioning, redevelopment, and other value-enhancement initiatives, all of which expose us to execution risks that may prevent us from realizing expected returns. Construction and redevelopment projects are inherently subject to risks such as unexpected structural or environmental conditions, labor shortages, contractor defaults, supply chain disruptions, and material price volatility. These factors can lead to delays or cost overruns that materially increase the capital required to complete a project and extend the time before a property generates stabilized income.

In addition, redevelopment and repositioning require successful leasing execution, which depends on prevailing market demand, competitive supply, and tenant creditworthiness. There can be no assurance that newly redeveloped or repositioned space will be leased on acceptable terms, or within anticipated timeframes. Prolonged lease-up periods, increased concessions, or elevated tenant improvement costs could reduce rental income and delay the achievement of targeted returns.

Regulatory risks also pose challenges to execution. Zoning restrictions, permitting delays, changes in building codes, or unexpected regulatory requirements may materially increase costs or prevent us from proceeding with a planned repositioning or redevelopment. Because such projects often require substantial upfront capital, any inability to complete them as planned could materially reduce our liquidity and constrain our ability to fund other business operations.

Taken together, these risks mean that redevelopment and repositioning initiatives may not deliver the returns we anticipate. If costs materially exceed budget, projects are delayed, or leasing results fall short of expectations, our financial condition, results of operations, and ability to meet debt service obligations could be materially and adversely affected.

 

 ***Because the value of our properties securing mortgage loans may decline due to market conditions, operational performance, or other factors, the collateral may not be sufficient to repay the indebtedness in the event of a foreclosure or forced sale, which could materially and adversely affect our financial condition and results of operations.***

 

The mortgage loans secured by our real estate holdings are collateralized by the value of the underlying properties. If property values decline as a result of adverse market conditions, weakened tenant demand, unfavorable changes in interest rates, increased competition, or other operational factors, the collateral supporting our loans may not be sufficient to cover the outstanding debt in the event of foreclosure or a forced sale. In such circumstances, we could be required to recognize significant losses, impairments, or write-downs that would adversely affect our financial condition and results of operations.

Real estate values are inherently volatile and subject to factors outside of our control, including local economic conditions, employment trends, capital market liquidity, demographic shifts, and changes in governmental regulations such as zoning, property taxes, and building codes. Additionally, operational factors—such as declining occupancy, tenant defaults, or unexpected capital expenditures—can negatively impact property performance, further reducing collateral value.

If we are unable to maintain property values at levels sufficient to support our mortgage obligations, lenders could foreclose on the property and we could lose our investment, while still remaining liable for any deficiency between the foreclosure proceeds and the outstanding loan balance. Even if we avoid foreclosure, we may be forced to sell properties at depressed valuations to raise liquidity, which could result in significant realized losses. Any such outcomes would materially and adversely impact our ability to meet debt service requirements, execute our business strategy, and protect shareholder value.

 

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 ***Because our ability to grow our real estate portfolio depends on sourcing and successfully closing attractive acquisitions on favorable terms, any inability to identify, negotiate, or complete acquisitions in a timely manner, or at expected values, could adversely affect our growth strategy and financial results****.*

 

Our real estate growth strategy is predicated on identifying, evaluating, and acquiring properties that meet our investment criteria. The success of this strategy depends on our ability to source attractive opportunities, conduct thorough due diligence, negotiate favorable terms, and close transactions efficiently. Competition for high-quality assets is intense, and we face established real estate companies, institutional investors, and private equity firms with greater resources, stronger relationships, and broader operating histories. As a result, we may not be able to acquire desirable properties on terms that meet our return objectives or in sufficient volume to achieve our growth targets.

In addition, acquisitions are subject to numerous uncertainties, including the availability and cost of capital, the accuracy of third-party information, potential regulatory or legal challenges, and the risk that a property may underperform relative to underwriting assumptions. If we are unable to identify and complete acquisitions on favorable terms, our ability to expand our portfolio, diversify revenue streams, and achieve economies of scale will be limited.

Even when acquisitions are successfully completed, integration challenges, such as aligning property management systems, incorporating assets into our compliance framework, and managing financing structures, may delay or prevent us from realizing expected returns. If our acquisitions do not perform as anticipated, or if we are unable to scale our real estate platform through disciplined and timely acquisitions, our growth strategy could be materially and adversely affected, which would negatively impact our financial condition, results of operations, and long-term prospects. 

 

 

 ***Because our real estate portfolio is concentrated in select geographic markets, our operating results are subject to local economic conditions, regulatory environments, and real estate market trends in those areas, and adverse developments in these markets could disproportionately affect our performance and financial results.***

 

Our real estate investments are concentrated in a limited number of U.S. markets, which exposes us to risks associated with the specific economic, demographic, and regulatory conditions of those regions. Local factors such as employment levels, population growth, consumer demand, infrastructure development, and the availability of financing all directly influence property performance, occupancy rates, and asset values. If one or more of these markets experience an economic downturn, declining real estate demand, or adverse demographic shifts, our revenues and property values could be materially and disproportionately affected.

In addition, local regulations, including zoning laws, rent control measures, property tax assessments, building codes, and environmental restrictions, can significantly impact property operations and profitability. Changes in these laws, or stricter enforcement, could increase our costs, delay redevelopment or repositioning projects, and limit our ability to optimize returns.

Because our current portfolio is not broadly diversified across many geographic areas, the effects of negative developments in one market cannot be easily offset by stronger performance in others. As a result, adverse conditions in the select markets where we operate could materially and adversely impact our financial condition, results of operations, and growth prospects.

 

 ***We face competition from established real estate owners, operators, and developers with greater resources, market presence, and operating experience, which may limit our ability to source acquisitions, attract tenants, achieve favorable lease terms, or realize our business objectives.***

 

The real estate industry is highly competitive, and we compete with a large number of established owners, operators, and developers who have substantially greater financial resources, broader market presence, deeper operating experience, and longer-standing industry relationships than we do. Many of these competitors are able to access capital at lower costs, pursue larger or more complex transactions, and absorb operating risks more effectively than we can.

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As a result, we may be at a disadvantage in identifying, negotiating, and acquiring attractive properties, particularly those located in supply-constrained or high-demand markets. We may also face challenges in attracting and retaining tenants, as larger and more established landlords may be able to offer more favorable lease terms, greater tenant improvement allowances, or stronger reputational benefits.

In addition, developers with significant resources may introduce new properties that increase competition for tenants in our markets, placing downward pressure on rental rates and occupancy. These dynamics could reduce the performance of our properties, delay or impair our growth strategy, and limit our ability to achieve our business objectives.

 

 ***The valuation of our real estate assets is inherently uncertain and may not accurately reflect the prices we could realize upon sale or refinancing, which could result in material differences between reported values and actual transaction outcomes.***

 

The value of our real estate assets is inherently subjective and depends on numerous factors, many of which are beyond our control. Independent appraisals, broker opinions, and management estimates rely on assumptions regarding property income, operating expenses, market rent levels, capitalization rates, and broader economic conditions. These assumptions may not prove accurate over time, particularly in periods of market volatility or when comparable transaction data is limited.

Because real estate markets are influenced by local supply and demand dynamics, interest rates, capital availability, and investor sentiment, the values we assign to our properties may differ materially from the amounts we would realize in an actual sale, refinancing, or other transaction. In addition, the carrying values reported in our financial statements may not reflect current market conditions or the liquidity of our properties.

If actual transaction outcomes are materially lower than reported or estimated values, we could be required to record impairment charges, accept less favorable refinancing terms, or dispose of properties under adverse conditions. Any such developments could adversely affect our financial condition, results of operations, and ability to execute our business strategy.

 

 ***Market rents and real estate sales prices are subject to fluctuations driven by local supply and demand dynamics, interest rate environments, capital market conditions, and broader economic cycles, and such volatility could materially impact our rental income, asset valuations, and the proceeds we realize upon a sale or refinancing.***

 

The performance and value of our real estate assets are highly dependent on external market conditions that we do not control. Market rents can decline if supply of comparable properties increases, demand from tenants weakens, or broader economic conditions reduce consumer or business spending. Similarly, the sales prices achievable for our properties may be adversely affected by higher interest rates, reduced availability of financing, capital market dislocations, or declines in investor appetite for real estate in our target markets.

Volatility in rental rates and property values directly influences our ability to generate stable cash flows and realize expected returns. Lower rental income could reduce operating margins and impair our ability to service debt or fund property improvements, while lower sales prices could limit the proceeds we receive upon a disposition or refinancing. Periods of market stress may also increase the risk that we are forced to sell properties at depressed prices or accept refinancing terms that are less favorable than anticipated.

If market rents or sales prices decline significantly, the value of our assets, our revenues, and our ability to execute our business strategy could be materially and adversely affected.

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 ***Our real estate revenues depend on our ability to successfully attract condominium buyers and tenants through broker networks, advertising campaigns, referrals, and promotional efforts, and any failure or increased cost in executing these strategies could materially impact sales velocity, occupancy rates, and pricing power.***

The success of our condominium sales and leasing activities depends on our ability to effectively market properties to potential buyers and tenants. We rely on broker networks, digital and traditional advertising, referral programs, and on-site promotional campaigns to generate sales and leasing activity. If these strategies are unsuccessful, ineffective, or become more costly, we may experience slower sales velocity, higher vacancy rates, extended absorption periods, or reduced rental pricing power.

Competition from other developers and landlords offering comparable residential or commercial properties may also limit our ability to attract buyers and tenants on favorable terms. Market conditions, such as rising interest rates, shifts in consumer demand, or broader macroeconomic downturns, could further weaken the effectiveness of our marketing efforts and diminish demand for our properties.

In addition, the success of our marketing strategies depends on our ability to allocate resources efficiently across multiple projects and adapt to evolving consumer preferences, including increased reliance on digital platforms and broker incentives. Failure to implement effective, targeted, and cost-efficient marketing and sales strategies could materially and adversely affect our real estate revenues, profitability, and overall business performance.

**Risks Related to Acquisitions**

***We have in the past made, and in the futu*** ***re may make, acquisitions and investments that could divert management's attention, result in operating difficulties and dilution to our shareholders and otherwise disrupt our operations and adversely affect our business, operating results or financial position.***

Pursuing strategic and value-enhancing acquisitions or investment opportunities is one of our key growth strategies and has been an important contributor to our past growth. We may also in the future evaluate potential divestitures to align with our growth strategy. Any transactions that we enter into could be material to our financial condition and results of operations. Acquisitions and integrations or divestitures could create unforeseen operating difficulties and expenditures, whether or not such transactions are ultimately completed. Acquisitions, divestitures, and investments involve a number of risks, such as:

• diversion
 of management time and focus from operating our business;

• use
 of resources that are needed in other areas of our business;

• in
 the case of an acquisition, implementation or remediation of controls, procedures and policies
 of the acquired company;

• in
 the case of an acquisition, difficulty integrating the accounting systems and operations
 of the acquired company;

• in
 the case of an acquisition, coordination of product, engineering and selling and marketing
 functions, including difficulties and additional expenses associated with supporting legacy
 services and products and hosting infrastructure of the acquired company and difficulty converting
 the customers of the acquired company onto our systems, platforms and contract terms, including
 disparities in the revenues, licensing, support or professional services model of the acquired
 company;

• in
 the case of an acquisition, difficulty integrating, supporting or enhancing acquired product
 lines or services, including difficulty in transitioning acquired solutions developed with
 different source code architectures to our integrated platforms, difficulty in supporting
 feature development across our full suite of house-built and acquired solutions and strain
 on resources from marketing and supporting multiple platforms prior to integration;

• in
 the case of an acquisition, retention and integration of employees from the acquired company,
 and preservation of our corporate culture;

• in
 the case of an acquisition, reliance on certain existing executive teams of acquired companies
 in new industries;

• in
 the case of an acquisition or divestiture, difficulty delivering on our product strategy,
 including building a platform that enables us to drive value across our full ecosystem of
 merchants, suppliers and consumers;

• unforeseen
 costs or liabilities;

• adverse
 effects to our existing business relationships with partners and customers as a result of
 the acquisition, investment or divestiture;

• the
 possibility of adverse tax consequences;

• in
 the case of an acquisition or divestiture, we may not be able to secure required regulatory
 approvals or otherwise satisfy closing conditions for a proposed transaction in a timely
 manner, or at all;

• fluctuations
 in the value of our investments, impairment to the value of our investments, or the failure
 to realize a return on such investments;

• regulatory
 risks, litigation or other claims inherited from or arising in connection with the acquired
 company, investment or divestiture;

• in
 the case of a divestiture, unforeseen loss of institutional knowledge, resources, know-how,
 or other assets;

• in
 the case of a divestiture, potential contractual obligations may trigger, such as change
 of control obligations, which may negatively impact our ability to execute on such divestiture,
 our business, our financial condition, or our operating results; and

• in
 the case of foreign acquisitions, the need to integrate operations across different cultures
 and languages and to address the particular economic, currency, political and regulatory
 risks associated with specific countries.

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Acquisitions and investments may also result in dilutive issuances of equity securities, which could adversely affect our share price, or result in issuances of securities with superior rights and preferences to the subordinate voting shares or the incurrence of debt with restrictive covenants that limit our future uses of capital in pursuit of business opportunities. Divestitures may also not be well-received by the market, which could adversely affect our share price.

We may not be able to identify acquisition or investment opportunities that meet our strategic objectives, or to the extent that such opportunities are identified, we may not be able to negotiate terms with respect to the acquisition or investment that are acceptable to us. In addition, the acquisitions and investments that we consummate may fail to achieve our strategic objectives, in which case we may shut down, divest, or otherwise exit the acquired business or investment, which could harm our reputation and adversely affect our financial position and results of operations.<br>***Businesses we acquire may not have disclosure controls and procedures and internal controls over financial reporting, cybersecurity controls and data*** ***privacy compliance programs, or their existing controls and programs may be weaker than or otherwise not in conformity with ours.***

Upon consummating an acquisition, we seek to implement our disclosure controls and procedures, our internal controls over financial reporting as well as procedures relating to cybersecurity and compliance with data privacy laws and regulations at the acquired company as promptly as possible. Depending upon the nature and scale of the business acquired, the implementation of our disclosure controls and procedures as well as the implementation of our internal controls over financial reporting at an acquired company may be a lengthy process and may divert our attention from other business operations. Our integration efforts may periodically expose deficiencies or suspected deficiencies in the controls, procedures and programs of an acquired company that were not identified in our due diligence undertaken prior to consummating the acquisition. Where there exists a risk of deficiencies in controls, procedures or programs, we may not be in a position to comply with our obligations under applicable laws, regulations, rules and listing standards or we may be required to avail ourselves of scope limitations with respect to certifications required thereunder, and, as a result, our business and financial condition may be materially harmed.

***We may consider potential business or asset acquisitions in different industries, and stockholders may have no basis at this time to ascertain the merits or risks of any business or asset that we may ultimately operate or acquire.***

Our business strategy contemplates the potential acquisition of one or more additional operating businesses or other assets that we believe will provide better returns on equity than our previous businesses and/or enhance the returns achieved from our current operating segments. There is no current basis for stockholders to evaluate the possible merits or risks of a target business or asset with which we may ultimately consummate a business combination, acquisition, or other investment. Although we will seek to evaluate the risks inherent in any particular business or acquisition opportunity, we cannot assure stockholders that all of the significant risks present in that opportunity will be properly assessed. Even if we properly assess those risks, some of them may be outside of our control or ability to assess. We may pursue business combinations, asset acquisitions, or investments that do not require stockholder approval and, in those instances, stockholders will most likely not be provided with an opportunity to evaluate the specific merits or risks of any such transaction before we become committed to the transaction(s).

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***Resources will be expended in researching potential acquisitions and investments that might not be consummated.***

The investigation of target businesses and assets and the negotiation, drafting, and execution of relevant agreements, disclosure documents, and other instruments has required and will continue to require substantial management time and attention, in addition to costs for accountants, attorneys, and others engaged from time to time to assist management. If a decision is made not to complete a specific business combination, asset acquisition, or other investment, the costs incurred up to that point relating to the proposed transaction likely would not be recoverable and would be borne by us. Furthermore, even if an agreement is reached relating to a specific opportunity, we may fail to consummate the transaction for any number of reasons, including those beyond our control.

***Subsequent to an acquisition or business combination, we may be required to take write-downs or write-offs, incur restructuring costs, and incur impairment or other charges that could have a significant negative effect on our financial condition, results of operations, and share price, which could cause stockholders to lose some or all of their investments.***

Even if we conduct extensive due diligence on a target business with which we combine or an asset which we acquire, we cannot assure stockholders that this diligence will identify all material issues that may be present with respect to a particular target business or asset, that it would be possible to uncover all material issues through a customary and reasonable amount of due diligence, or that factors outside of the target business and outside of our control will not later arise. As a result of these factors, we may be forced to later write-down or write-off assets, restructure our operations, or incur impairment or other charges that could result in our reporting losses. Even if our due diligence successfully identifies certain risks, unexpected risks may arise, and previously known risks may materialize in a manner not consistent with our preliminary risk analysis. Even though these charges may be non-cash items and therefore will not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute to negative market perceptions about us or our securities. In addition, charges of this nature may cause us to violate net worth or other covenants to which we may be subject as a result of assuming pre-existing debt held by a target business or associated with a target asset, or by virtue of our obtaining debt financing in connection with our future operations. Accordingly, stockholders could suffer a significant reduction in the value of their shares.

**Risks Related to Our Management and Control Persons**

***We rely heavily on our management, and the loss of their services could adversely affect our business.***

Our success is highly dependent upon a well-structured and diversely appointed Board of Directors, Officers and Directors. The loss of Key Personal within the organization could have a material adverse effect on the Company and its business operations.

The market for skilled employees is highly competitive, especially for employees in our industry. Although we expect that our planned compensation programs will be intended to attract and retain the employees required for us to be successful, there can be no assurance that we will be able to retain the services of all our key employees or a sufficient number to execute our plans, nor can there be any assurance we will be able to continue to attract new employees as required.

 ***Our status as a controlled company and the concentration of voting power among our Founders could limit your ability to influence corporate matters.***

  ****

As of the date of this prospectus, there are [\*] shares of common stock, 64,020,000 shares of Series A preferred Stock, and 10,000,000 shares of Series B Preferred Stock outstanding.

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If listed on Nasdaq, we would be a "controlled company" within the meaning of Nasdaq Listing Rule 5615(c) because Vincent Napolitano, Shaun Quin, and Glen Steward (the "Founders"), through a voting agreement governing 10,000,000 shares of Series B Preferred Stock, each with 50 votes per share, collectively control approximately 87% of the voting power of our company.

Upon completion of this Offering, our Founders will have the ability to control the outcome of matters submitted to the shareholders for approval, including the election of directors and any merger, consolidation, or sale of all or substantially all of our assets.

Our status as a controlled company and the concentration of voting power among our Founders could limit your ability to influence corporate matters. This concentrated voting power could discourage others from initiating any potential merger, takeover or other change-of-control transaction that may otherwise be beneficial to our stockholders. Furthermore, this concentrated control will limit the practical effect of your influence over our business and affairs, through any stockholder vote or otherwise. Any of these effects could depress the price of our common stock.

***If we are unable to attract and retain qualified personnel, especially our design and technical personnel, we may not be able to execute our business strategy effectively.***

 ****

Our future success depends on our ability to retain, attract and motivate qualified personnel, including our management, sales and marketing, finance, and especially our design and technical personnel. As the source of our technological and product innovations, our design and technical personnel represent a significant asset. Any inability to retain, attract or motivate such personnel could have a material adverse effect on our business and results of operations.

***Provisions in the Nevada Revised Statutes and our Bylaws could make it very difficult for an investor to bring any legal actions against our directors or officers for violations of their fiduciary duties or could require us to pay any amounts incurred by our directors or officers in any such actions.***

Members of our board of directors and our officers will have no liability for breaches of their fiduciary duty of care as a director or officer, except in limited circumstances, pursuant to provisions in the Nevada Revised Statutes and our Bylaws as authorized by the Nevada Revised Statutes ("NRS"). Specifically, NRS 78.138 provides that a director or officer is not individually liable to the company or its shareholders or creditors for any damages as a result of any act or failure to act in his or her capacity as a director or officer unless it is proven that (1) the director's or officer's act or failure to act constituted a breach of his or her fiduciary duties as a director or officer and (2) his or her breach of those duties involved intentional misconduct, fraud or a knowing violation of law.

This provision is intended to afford directors and officers protection against and to limit their potential liability for monetary damages resulting from suits alleging a breach of the duty of care by a director or officer. Accordingly, you may be unable to prevail in a legal action against our directors or officers even if they have breached their fiduciary duty of care.

In addition, our Bylaws allow us to indemnify our directors and officers from and against any and all costs, charges and expenses resulting from their acting in such capacities with us. This means that if you were able to enforce an action against our directors or officers, in all likelihood, we would be required to pay any expenses they incurred in defending the lawsuit and any judgment or settlement they otherwise would be required to pay. Accordingly, our indemnification obligations could divert needed financial resources and may adversely affect our business, financial condition, results of operations and cash flows, and adversely affect prevailing market prices for our common stock.

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***Our officers and directors have limited experience managing a public company.***

Our officers and directors have limited experience managing a public company. Consequently, we may not be able to raise any funds or run our public company successfully. Our executive officer's and director's lack of experience of managing a public company could cause you to lose some or all of your investment.

**Risks Related to Legal Uncertainty**

***Claims made against us from time to time can result in litigation that could distract management from our business activities and result in significant liability or damage to our brand.***

As a company with expanding operations, we increasingly face the risk of litigation and other claims against us. We have no such claims at present. Litigation and other claims may arise in the ordinary course of our business and include employee claims, commercial disputes, landlord-tenant disputes, intellectual property issues, product-oriented allegations and slip and fall claims. These claims can raise complex factual and legal issues that are subject to risks and uncertainties and could require significant management time. Litigation and other claims against us could result in unexpected expenses and liabilities, which could materially adversely affect our operations and our reputation.

In addition, the industries in which we operate, funding and real estate, are characterized by extensive litigation and, from time to time, we may become subject of various claims. Regardless of outcome, such claims are expensive to defend and divert management and operating personnel from other business issues. A successful claim or claims against us could result in payment of significant monetary damages and/or injunctive relief.

***We may be classified as an inadvertent investment company if we acquire investment securities in excess of 40% of our total assets.***

We are engaged in the business of being a diversified holding company engaged in significant finance and real estate activities while we continue to seek to acquire or establish other finance or operating businesses or assets. Our acquisition strategy focuses on evaluating acquisition targets that have reasonable growth prospects, and our management spends a significant portion of its time reviewing potential acquisitions, conducting due diligence, and seeking to negotiate transaction terms. From time to time, we may purchase investment securities as part of a deliberate strategy to obtain control of an operating business.

Under the Investment Company Act of 1940 (the "ICA"), a company may fall within the scope of being an "inadvertent investment company" under Section 3(a)(1)(C) of the ICA if the value of its investment securities (as defined in the ICA) is more than 40% of the company's total assets on an unconsolidated basis (exclusive of government securities and cash and cash equivalents). We do not believe that we are engaged in the business of investing, reinvesting, or trading in securities, and we do not hold ourselves out as being engaged in the business of investing, reinvesting, or trading in securities. However, we seek prudently to hold excess liquid resources in marketable securities to preserve resources needed to acquire operating businesses or assets and fund our finance and real estate activities.

The Board of Directors and management regularly monitor our status relative to the inadvertent investment company test under the ICA and believe that the Company is not currently an inadvertent investment company based on the assets test under Section 3(a)(1)(C) of the ICA.

If we were deemed to be an inadvertent investment company and determined to or were required to become a registered investment company, we would be subject to burdensome and costly compliance requirements and restrictions that would limit our activities, including limitations on our capital structure, additional corporate governance requirements, and other limitations on our ability to transact business as currently conducted. We do not believe that it would be practical or feasible for a company of our size, management, and financial resources to operate as a registered investment company. To avoid being deemed an inadvertent investment company or becoming a registered investment company, we may decide or be required to sell certain of our investments on disadvantageous terms, hold a greater proportion of our investments in marketable securities in U.S. government securities or cash equivalents that have a lower rate of return than other investment securities, or make other material modifications to our business operations and strategy, any or all of which could have a material adverse effect on our business, financial condition, results of operations, and future prospects.

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***We may be subject to tax and regulatory audits which could subject us to liabilities.***

We are subject to tax and regulatory audits which could result in the imposition of liabilities that may or may not have been reserved. We are subject to audits by taxing and regulatory authorities with respect to certain of our income and operations. These audits can cover periods for several years prior to the date the audit is undertaken and could result in the imposition of liabilities, interest and penalties if our positions are not accepted by the auditing entity.

***Changes in regulations or user concerns regarding privacy and protection of user data, or any failure to comply with such laws, could adversely affect our business.***

Federal, state, and international laws and regulations govern the collection, use, retention, disclosure, sharing and security of data that we receive from and about our users. The use of consumer data by online service providers is a topic of active interest among federal, state, and international regulatory bodies, and the regulatory environment is unsettled. Many states have passed laws requiring notification to users where there is a security breach for personal data, such as California's Information Practices Act. We face similar risks in international markets where our products and services are offered. Any failure, or perceived failure, by us to comply with or make effective modifications to our policies, or to comply with any applicable federal, state, or international privacy, data-retention or data-protection-related laws, regulations, orders or industry self-regulatory principles could result in proceedings or actions against us by governmental entities or others, a loss of user confidence, damage to our business and brand, and a loss of users, which could potentially have an adverse effect on our business.

In addition, various federal, state and foreign legislative or regulatory bodies may enact new or additional laws and regulations concerning privacy, data retention, data transfer and data protection issues, including laws or regulations mandating disclosure to domestic or international law enforcement bodies, which could adversely impact our business, our brand or our reputation with users. For example, some countries are considering or have enacted laws mandating that user data regarding users in their country be maintained in their country. In addition, there currently is a data protection regulation applicable to member states of the European Union that includes operational and compliance requirements that are different than those currently in place and that also includes significant penalties for non-compliance.

The interpretation and application of privacy, data protection, data transfer and data retention laws and regulations are often uncertain and in flux in the United States and internationally. These laws may be interpreted and applied inconsistently from country to country and inconsistently with our current policies and practices, complicating long-range business planning decisions. If privacy, data protection, data transfer or data retention laws are interpreted and applied in a manner that is inconsistent with our current policies and practices, we may be fined or ordered to change our business practices in a manner that adversely impacts our operating results. Complying with these varying international requirements could cause us to incur substantial costs or require us to change our business practices in a manner adverse to our business and operating results.

***Nevada law and certain anti-takeover provisions of our corporate documents could entrench our management or delay or prevent a third party from acquiring us or a change in control even if it would benefit our shareholders.***

Certain provisions of Nevada law may have an anti-takeover effect and may delay or prevent a tender offer or other acquisition transaction that a shareholder might consider to be in his or her best interest. The summary of the provisions of Nevada law set forth below does not purport to be complete and is qualified in its entirety by reference to Nevada law.

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The issuance of shares of preferred stock, the issuance of rights to purchase such shares, and the imposition of certain other adverse effects on any party contemplating a takeover could be used to discourage an unsolicited acquisition proposal. For instance, the issuance of a series of preferred stock might impede a business combination by including class voting rights that would enable a holder to block such a transaction. In addition, under certain circumstances, the issuance of preferred stock could adversely affect the voting power of holders of our common stock.

Under Nevada law, a director, in determining what he reasonably believes to be in or not opposed to the best interests of the corporation, does not need to consider only the interests of the corporation's shareholders in any takeover matter but may also, in his discretion, may consider any of the following:

(i) The interests of the corporation's employees, suppliers, creditors and customers;

(ii) The economy of the state and nation;

(iii) The impact of any action upon the communities in or near which the corporation's facilities or operations are located;

(iv) The long-term interests of the corporation and its shareholders, including the possibility that those interests may be best served by the continued independence of the corporation; and

(v) Any other factors relevant to promoting or preserving public or community interests.

Because our board of directors is not required to make any determination on matters affecting potential takeovers solely based on its judgment as to the best interests of our shareholders, our board could act in a manner that would discourage an acquisition attempt or other transaction that some, or a majority, of our shareholders might believe to be in their best interests or in which such shareholders might receive a premium for their stock over the then market price of such stock. Our board presently does not intend to seek shareholder approval prior to the issuance of currently authorized stock, unless otherwise required by law or applicable stock exchange rules.

***If we fail to maintain an effective system of internal control over financial reporting in the future, we may not be able to accurately report our financial condition, results of operations or cash flows, which may adversely affect investor confidence in us and, as a result, the value of our common shares.***

We are required, under Section 404 of the Sarbanes-Oxley Act, to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting. This assessment includes disclosure of any material weaknesses identified by our management in our internal control over financial reporting. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting that results in more than a reasonable possibility that a material misstatement of annual or interim financial statements will not be prevented or detected on a timely basis. Section 404 of the Sarbanes-Oxley Act also generally requires an attestation from our independent registered public accounting firm on the effectiveness of our internal control over financial reporting. However, for as long as we remain a smaller reporting company, we intend to take advantage of the exemption permitting us not to comply with the independent registered public accounting firm attestation requirement.

Our compliance with Section 404 will require that we incur substantial accounting expense and expend significant management efforts. We may not be able to complete our evaluation, testing and any required remediation in a timely fashion. During the evaluation and testing process, if we identify one or more material weaknesses in our internal control over financial reporting, we will be unable to assert that our internal control over financial reporting is effective.

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***Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud.***

Our disclosure controls and procedures are designed to reasonably assure that information required to be disclosed by us in reports we file or submit under the Securities Exchange Act of 1934 is accumulated and communicated to management, recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. We believe that any disclosure controls and procedures or internal controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by an unauthorized override of the controls. Accordingly, because of the inherent limitations in our control system, misstatements or insufficient disclosures due to error or fraud may occur and not be detected.

***Deficiencies in disclosure controls and procedures and internal control over financial reporting could result in a material misstatement in our financial statements.***

We could be adversely affected if there are deficiencies in our disclosure controls and procedures or in our internal controls over financial reporting. The design and effectiveness of our disclosure controls and procedures and our internal controls over financial reporting may not prevent all errors, misstatements or misrepresentations. Consistent with other entities in similar stages of development, we have a limited number of employees currently in the accounting group, limiting our ability to provide for segregation of duties and secondary review. A lack of resources in the accounting group could lead to material misstatements resulting from undetected errors occurring from an individual performing primarily all areas of accounting with limited secondary review. Deficiencies in internal controls over financial reporting which may occur could result in material misstatements of our results of operations, restatements of financial statements, other required remediations, a decline in the price of our common shares, or otherwise materially adversely affect our business, reputation, results of operations, financial condition or liquidity.

***There may be deficiencies with our internal controls that require that require improvements, and if we are unable to adequately evaluate internal controls, we may be subject to sanctions by the SEC.***

We are exposed to potential risks from legislation requiring companies to evaluate internal controls under Section 404a of the Sarbanes-Oxley Act of 2002. As a smaller reporting company, we will not be required to provide a report on the effectiveness of our internal controls over financial reporting until our second annual report, and we will be exempt from the auditor attestation requirements concerning any such report so long as we are a smaller reporting company. We have not yet evaluated whether our internal control procedures are effective and therefore there is a greater likelihood of undiscovered errors in our internal controls or reported financial statements as compared to issuers that have conducted such evaluations. If we are not able to meet the requirements of Section 404a in a timely manner or with adequate compliance, we might be subject to sanctions or investigation by regulatory authorities, such as the SEC.

***We may be unable to protect our intellectual property from infringement by third parties, and the third parties may claim that we are infringing on their intellectual property, either of which could materially or adversely affect us.***

We intend to rely on patent protection, trade secrets, technical know-how and continuing technological innovation to protect our intellectual property, and we expect to require any employees, consultants and advisors that we may hire or engage in the future to execute confidentiality and assignment of inventions agreements in connection with their employment, consulting or advisory relationships. There can be no assurance, however, that these agreements will not be breached or that we will have adequate remedies for any such breach.

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Despite our efforts to protect our intellectual property, third parties may infringe or misappropriate our intellectual property or may develop intellectual property competitive with ours. Our competitors may independently develop similar technology or otherwise duplicate our financial products and services. As a result, we may have to litigate to enforce and protect our intellectual property rights to determine their scope, validity or enforceability. Intellectual property litigation is particularly expensive, time-consuming, diverts the attention of management and technical personnel and could result in substantial cost and uncertainty regarding our future viability. The loss of intellectual property protection or the inability to secure or enforce intellectual property protection would limit our ability to produce and/or market our products and services in the future and would likely have an adverse effect on any revenues we may in the future be able to generate by the sale or license of such intellectual property.

We may be subject to costly litigation in the event our future services or technology infringe upon another party's proprietary rights. Third parties may have, or may eventually be issued, patents that would be infringed by our technology. Any of these third parties could make a claim of infringement against us with respect to our technology. We may also be subject to claims by third parties for breach of copyright, trademark or license usage rights. Any such claims and any resulting litigation could subject us to significant liability for damages or injunctions precluding us from utilizing our technology or services or marketing or selling any products or services under the same. An adverse determination in any litigation of this type could require us to design around a third party's patent, license alternative technology from another party or otherwise result in limitations in our ability to use the intellectual property subject to such claims.

***We may be exposed to liabilities under the Foreign Corruption Practices Act and any determination that we violated these laws could have a materially adverse effect on our business.***

We are subject to the Foreign Corrupt Practices Act ("FCPA"), and other laws that prohibit improper payments or offers of payments to foreign governments and their officials and political parties by U.S. persons and issuers as defined by the statute, for the purpose of obtaining or retaining business. It is our policy to implement safeguards to discourage these practices by our employees. However, our existing safeguards and any future improvements may prove to be less than effective, and our employees, consultants, sales agents or distributors may engage in conduct for which we might be held responsible. Violations of the FCPA may result in severe criminal or civil sanctions and we may be subject to other liabilities, which could negatively affect our business, operating results and financial condition.

**Risks Related to Our Securities**

***We have the right to issue additional common stock and preferred stock without the consent of our stockholders, which would have the effect of diluting investors' ownership and could decrease the value of their investment.***

We have additional authorized, but unissued shares of our common stock that may be issued by us for any purpose without the consent or vote of our stockholders that would dilute stockholders' percentage ownership of our company.

Our articles of incorporation authorize the issuance of shares of preferred stock and/or the conversion of existing outstanding preferred stock into common stock, the rights, preferences, designations and limitations of which may be set by the board of directors. Our articles of incorporation have authorized the issuance of up 500,000,000 shares of common stock and up to 100,000,000 shares of preferred stock in the discretion of our Board.

Any authorized but unissued preferred stock may be issued upon board of directors' approval; no further stockholder action is required. If issued, the rights, preferences, designations and limitations of such preferred stock would be set by our Board and could operate to the disadvantage of the outstanding common stock. Such terms could include, among others, preferences as to dividends and distributions on liquidation.

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 ***Our Series A Preferred Stock and all of our existing and future indebtedness rank senior to our common stock in the event of a liquidation, winding up or dissolution of our business.***

In the event of our liquidation, winding up or dissolution, our assets would be available to make payments to holders of all existing and future indebtedness and holders of the Series A Preferred Stock, before payments to holders of our common stock. In the event of our bankruptcy, liquidation or winding up, there may not be sufficient assets remaining, after paying amounts to the holders of our indebtedness and preferred stockholders, to pay anything to common stockholders. As of June 30, 2025, we had total consolidated liabilities of approximately $42,958,453 million, with 69,020,000 shares of Series A Preferred Stock outstanding. As of the date of this prospectus, there are 59,020,000 shares of Series A Preferred Stock outstanding. Any liquidation, winding up or dissolution of our company or of any of our wholly or partially owned subsidiaries would have a material adverse effect on the holders of our common stock.

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***We do not expect to pay dividends on our common stock in the foreseeable future. Any return on investment may be limited to the value of our common stock.***

Since inception, we have never declared a dividend on our common stock, and we do not intend to declare dividends on our common stock in the foreseeable future. The terms of our Series A Preferred stock provide an annual dividend of six percent (6%) of the Stated Value times the number of preferred shares held by such holder. Dividends on the Series A Preferred Stock is payable on a quarterly basis and may be payable, at our option, in cash or shares of our common stock, or a combination thereof.

Other than with respect to our Series A Preferred Stock, our board of directors declares dividends when, in its discretion, it determines that a dividend payment, as opposed to another use of cash, is in the best interests of the stockholders. Such decisions are based on the facts and circumstances then existing including, without limitation, our results of operations, financial condition, contractual restrictions, restrictions imposed by applicable law and other factors our board of directors deems relevant. As a result, we cannot predict when, or whether, another dividend on our common stock will be declared in the future. If we do not pay dividends, our common stock may be less valuable because a return on your investment will occur only if our stock price appreciates.

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**Risks Related to the Market for our Stock**

***If a market for our common stock does not develop, shareholders may be unable to sell their shares.***

Our common stock is quoted under the symbol "FAVO" on the OTCPink operated by OTC Markets Group, Inc., an electronic inter-dealer quotation medium for equity securities. We do not currently have an active trading market. There can be no assurance that an active and liquid trading market will develop or, if developed, that it will be sustained.

Our securities are very thinly traded. Accordingly, it may be difficult to sell shares of our common stock without significantly depressing the value of the stock. Unless we are successful in developing continued investor interest in our stock, sales of our stock could continue to result in major fluctuations in the price of the stock.

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***The market price of our common stock is likely to be highly volatile and could fluctuate widely in price in response to various factors, many of which are beyond our control.***

Our stock price is subject to a number of factors, including:

• Technological
 innovations or new products and services by us or our competitors;

• Government
 regulation of our financial products and services;

• The
 establishment of partnerships with other financial services companies;

• Intellectual
 property disputes;

• Additions
 or departures of key personnel;

• Sales
 of our common stock;

• Our
 ability to integrate operations, technology, products and services;

• Our
 ability to execute our business plan;

• Operating
 results below or exceeding expectations;

• Whether
 we achieve profits or not;

• Loss
 or addition of any strategic relationship;

• Industry
 developments;

• Changes
 in accounting principles;

• General
 and industry-specific economic conditions; and

• Period-to-period
 fluctuations in our financial results.

The market prices of the securities of early-stage companies, particularly companies like ours without consistent revenues and earnings, have been highly volatile and are likely to remain highly volatile in the future. This volatility has often been unrelated to the operating performance of particular companies. In the past, companies that experience volatility in the market price of their securities have often faced securities class action litigation. Whether or not meritorious, litigation brought against us could result in substantial costs, divert our management's attention and resources and harm our financial condition and results of operations.

***Because we are subject to the "Penny Stock" rules, the level of trading activity in our stock may be reduced.***

The Securities and Exchange Commission has adopted regulations which generally define "penny stock" to be any listed, trading equity security that has a market price less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exemptions. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the risks in the penny stock market. The broker-dealer must also provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer's account. In addition, the penny stock rules generally require that prior to a transaction in a penny stock, the broker-dealer make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for a stock that becomes subject to the penny stock rules which may increase the difficulty Purchasers may experience in attempting to liquidate such securities.

***We will likely conduct further offerings of our equity securities in the future, in which case your proportionate interest may become diluted.***

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We will likely be required to conduct equity offerings in the future to finance our current projects or to finance subsequent projects that we decide to undertake. If our common stock shares are issued in return for additional funds, the price per share could be lower than that paid by our current shareholders. We anticipate continuing to rely on equity sales of our common stock shares in order to fund our business operations. If we issue additional common stock shares or securities convertible into shares of our common stock, your percentage interest in us could become diluted.

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***If securities or industry analysts do not publish research or reports about our business, or publish negative reports about our business, our share price and trading volume could decline.***

The trading market for our common stock will, to some extent, depend on the research and reports that securities or industry analysts publish about us or our business. We do not have any control over these analysts. If one or more of the analysts who cover us downgrade our shares or change their opinion of our shares, our share price would likely decline. If one or more of these analysts cease coverage of us or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our share price or trading volume to decline.

***FINRA sales practice requirements may limit a stockholder's ability to buy and sell our securities.***

Effective June 30, 2020, the SEC implemented Regulation Best Interest requiring that "A broker, dealer, or a natural person who is an associated person of a broker or dealer, when making a recommendation of any securities transaction or investment strategy involving securities (including account recommendations) to a retail customer, shall act in the best interest of the retail customer at the time the recommendation is made, without placing the financial or other interest of the broker, dealer, or natural person who is an associated person of a broker or dealer making the recommendation ahead of the interest of the retail customer." This is a significantly higher standard for broker-dealers to recommend securities to retail customers than before under FINRA suitability rules. FINRA suitability rules do still apply to institutional investors and require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending securities to their customers, broker-dealers must make reasonable efforts to obtain information about the customer's financial status, tax status, investment objectives and other information, and for retail customers determine the investment is in the customer's "best interest" and meet other SEC requirements. Both SEC Regulation Best Interest and FINRA's suitability requirements may make it more difficult for broker-dealers to recommend that their customers buy speculative, low-priced securities. They may affect investing in our common stock or our preferred stock, which may have the effect of reducing the level of trading activity in our securities. As a result, fewer broker-dealers may be willing to make a market in our common stock or our preferred stock, reducing a stockholder's ability to resell shares of our common stock or our preferred stock.

**Risks Relating to this Offering and our Reverse Stock-Split**

 ***The market price of our common stock may be volatile or may decline regardless of our operating performance, and you may not be able to resell your shares at or above the public offering price.***

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Recently, there have been instances of extreme stock price run-ups followed by rapid price declines and strong stock price volatility with a number of recent initial public offerings, especially among companies with relatively smaller public floats. The offering price for our primary offering will be determined through negotiations between the underwriters and us and may vary from the market price of our common stock following our primary offering. If you purchase our common stock in our primary offering and resale offering, you may not be able to sell those shares at or above the primary offering price or the resale offering price. In particular, our common stock may be subject to rapid and substantial price volatility, low volumes of trades and large spreads in bid and ask prices, given that we will have relatively small public floats after this offering, and the selling stockholders of the Company are offering resale shares through the resale prospectus. Such volatility, including any stock-run up, may be unrelated to our actual or expected operating performance, financial condition or prospects.

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We cannot assure you that the primary offering price of our common stock, or the market price following our primary offering, will equal or exceed prices in privately negotiated transactions of our shares that have occurred from time to time prior to our primary offering. The market price of our common stock may fluctuate significantly in response to numerous factors, many of which are beyond our control, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ▪ actual or anticipated fluctuations in our revenue and other operating results;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ▪ the sale of resale shares by our selling stockholders in the open market;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ▪ the financial projections we may provide to the public, any changes in these projections or our failure to meet these projections;

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ▪ announcements by us or our competitors of significant services or features, technical innovations, acquisitions, strategic relationships, joint ventures, or capital commitments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ▪ price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ▪ lawsuits threatened or filed against us; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ▪ other events or factors, including those resulting from war or incidents of terrorism, or responses to these events.

In addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. Stock prices of many companies have fluctuated in a manner unrelated or disproportionate to the operating performance of those companies. Stockholders may filed securities class action litigation following periods of market volatility. In the event that we were to become involved in securities litigation, it could subject us to substantial costs, divert resources and the attention of management from our business, and adversely affect our business.

Holders of our common stock may also not be able to readily liquidate their investment or may be forced to sell at depressed prices due to low volume trading. Broad market fluctuations and general economic and political conditions may also adversely affect the market price of our Common Stock. As a result of this volatility, investors may experience losses on their investment in our Common Stock. Furthermore, the potential extreme volatility may confuse the public investors of the value of our stock, distort the market perception of our stock price and our company's financial performance and public image, negatively affect the long-term liquidity of our Common Stock, regardless of our actual or expected operating performance. If we encounter such volatility, including any rapid stock price increases and declines seemingly unrelated to our actual or expected operating performance and financial condition or prospects, it will likely make it difficult and confusing for prospective investors to assess the rapidly changing value of our Common Stock and understand the value thereof.

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 ***The purchase price of our common stock in the resale offering could be higher or lower than the primary offering.***

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Our common stock is offered in two different offerings: the primary underwritten offering and the resale offering. The latter will follow the closing of the former. Although our common stock will be offered at a fixed price in the primary offering determined by the underwriters and us, we cannot guarantee that the selling stockholders will also offer their shares at the same price. As a result, if you participate in the resale offering, you could pay more or less than the price in our primary offering, depending on the actual price of the resale shares at the time of the sale.

***Investors in this offering will experience immediate and substantial dilution in net tangible book value.***

The public offering price will be substantially higher than the net tangible book value per share of our outstanding shares of common stock. As a result, investors in this offering will incur immediate dilution of $[\*] per share based on the assumed public offering price of $[\*] per share. Investors in this offering will pay a price per share that substantially exceeds the book value of our assets after subtracting our liabilities. See "<u>Dilution</u>" for a more complete description of how the value of your investment will be diluted upon the completion of this offering.

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***Participation in this offering by certain of our directors and their affiliates would reduce the available public float for our shares***.

It is possible that one or more of our directors or their affiliates or related parties could purchase common stock in this offering at the public offering price and on the same terms as the other purchasers in this offering. However, these persons or entities may determine not to purchase any shares in this offering, or the underwriter may elect not to sell any shares in this offering to such persons or entities. Any purchases by our directors or their affiliates or related parties would reduce the available public float for our shares because such shareholders would be restricted from selling the common stock by a lock-up agreement they have entered into with the underwriter and by restrictions under applicable securities laws. As a result, any purchase of common stock by such shareholders in this offering may reduce the liquidity of our common stock relative to what it would have been had this common stock been purchased by investors that were not affiliated with us.

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***Our management will have broad discretion as to the use of proceeds from this offering, and we may not use the proceeds effectively.***

Our management will have broad discretion in the application of the net proceeds from this offering and could spend the proceeds in ways that do not improve our results of operations or enhance the value of our common stock. You will not have the opportunity, as part of your investment decision, to assess whether these proceeds are being used appropriately. Our failure to apply these funds effectively could have a material adverse effect on our business and cause the price of our common stock to decline.

***Even if the reverse stock split achieves the requisite increase in the market price of our common stock, we cannot assure you that we will be able to continue to comply with the minimum bid price requirement of the Nasdaq Capital Market***.

Even if the reverse stock split achieves the requisite increase in the market price of our common stock to be in compliance with the minimum bid price of the Nasdaq Capital Market, there can be no assurance that the market price of our common stock following the reverse stock split will remain at the level required for continuing compliance with that requirement. It is not uncommon for the market price of a company's common stock to decline in the period following a reverse stock split. If the market price of our common stock declines following the effectuation of the reverse stock split, the percentage decline may be greater than would occur in the absence of a reverse stock split. In any event, other factors unrelated to the number of shares of our common stock outstanding, such as negative financial or operational results, could adversely affect the market price of our common stock and jeopardize our ability to meet or maintain the Nasdaq Capital Market's minimum bid price requirement.

***Even if the reverse stock split increases the market price of our common stock and we meet the initial listing requirements of the Nasdaq Capital Market, there can be no assurance that we will be able to comply with the continued listing standards of the Nasdaq Capital Market, a failure of which could result in a de-listing of our common stock***.

The Nasdaq Capital Market requires that the trading price of its listed stocks remain above one dollar in order for the stock to remain listed. If a listed stock trades below one dollar for more than 30 consecutive trading days, then it is subject to delisting from the Nasdaq Capital Market. In addition, to maintain a listing on the Nasdaq Capital Market, we must satisfy minimum financial and other continued listing requirements and standards, including those regarding director independence and independent committee requirements, minimum stockholders' equity, and certain corporate governance requirements. If we are unable to satisfy these requirements or standards, we could be subject to delisting, which would have a negative effect on the price of our common stock and would impair your ability to sell or purchase our common stock when you wish to do so. In the event of a delisting, we would expect to take actions to restore our compliance with the listing requirements, but we can provide no assurance that any such action taken by us would allow our common stock to become listed again, stabilize the market price or improve the liquidity of our common stock, prevent our common stock from dropping below the minimum bid price requirement, or prevent future non-compliance with the listing requirements.

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***The reverse stock split may decrease the liquidity of the shares of our common stock***.

The liquidity of the shares of our common stock may be affected adversely by the reverse stock split given the reduced number of shares that will be outstanding following the reverse stock split, especially if the market price of our common stock does not increase as a result of the reverse stock split. In addition, the reverse stock split may increase the number of shareholders who own odd lots (less than 100 shares) of our common stock, creating the potential for such shareholders to experience an increase in the cost of selling their shares and greater difficulty effecting such sales.

***Following the reverse stock split, the resulting market price of our common stock may not attract new investors, including institutional investors, and may not satisfy the investing requirements of those investors. Consequently, the trading liquidity of our common stock may not improve***.

Although we believe that a higher market price of our common stock may help generate greater or broader investor interest, there can be no assurance that the reverse stock split will result in a share price that will attract new investors, including institutional investors. In addition, there can be no assurance that the market price of our common stock will satisfy the investing requirements of those investors. As a result, the trading liquidity of our common stock may not necessarily improve.

***There is no assurance that once listed on the Nasdaq Capital Market we will not continue to experience volatility in our share price***.

The OTC Pink, where our common stock is currently quoted, is an inter-dealer, over-the-counter market that provides significantly less liquidity than the Nasdaq Capital Market. Our stock is thinly traded due to the limited number of shares available for trading on OTC Pink thus causing large swings in price. As such, investors and potential investors may find it difficult to obtain accurate stock price quotations, and holders of our common stock may be unable to resell their securities at or near their original offering price or at any price. Our public offering price per share of common stock may vary from the market price of our common stock after the offering. If an active market for our stock develops and continues, our stock price may nevertheless be volatile. If our stock experiences volatility, investors may not be able to sell their common stock at or above the public offering price per share. Sales of substantial amounts of our common stock, or the perception that such sales might occur, could adversely affect prevailing market prices of our common stock and our stock price may decline substantially in a short period of time. As a result, our shareholders could suffer losses or be unable to liquidate their holdings. No assurance can be given that the price of our common stock will become less volatile if and when listed on the Nasdaq Capital Market.

 ***The number of shares being registered for resale with this offering is significant in relation to our outstanding shares.***

As noted above, pursuant to a separate resale prospectus included in the registration statement of which this prospectus forms a part, we are also registering 20,621,250 shares of common stock for resale by certain selling stockholders. No resales of the common stock covered by this prospectus shall occur until the closing of our primary underwritten offering. Once the primary offering is completed, the selling stockholders may sell their shares from time to time at the market price prevailing at the time of offer and sale, or at prices related to such prevailing market prices or in negotiated transactions or a combination of such methods.

All of the shares registered for resale on behalf of the selling stockholders are "restricted securities" as that term is defined in Rule 144 under the Securities Act. We have included the resale prospectus in the registration statement to register these restricted shares for sale into the public market by the selling stockholders. These restricted securities, if sold in the market all at once or at about the same time, could depress the market price and also could affect our ability to raise equity capital. Any outstanding shares not registered in the resale prospectus will remain as "restricted shares" in the hands of the holders, except for those sales that satisfy the requirements under Rule 144 or another exemption to the registration requirements under the Securities Act.

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**USE OF PROCEEDS**

We estimate that the net proceeds from this offering will be approximately $[\*] after deducting estimated underwriting discounts and estimated offering expenses payable by us. If the underwriter's over-allotment option is exercised in full, we estimate that our net proceeds will be approximately $[\*] million. We intend to use the net proceeds from this offering for the following purposes:

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| | |
|:---|:---|
| Proceeds: |  |
| Gross Proceeds | $|
| Discounts |  |
| Fees and Expenses<sup>(1)</sup> |  |
| **Net Proceeds** | $|
| Uses: |  |
| Expansion of Direct Merchant Cash Advance Originations <sup>(2)</sup> |  |
| Debt Repayment <sup>(3)</sup> | $|
| AI and Automation Infrastructure Development <sup>(4)</sup> |  |
| **Total Uses** | $|

---

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| | |
|:---|:---|
| (1) | In the event that our estimated offering expenses are less than the amounts indicated above, any such excess funds shall be applied toward our working capital and other corporate purposes. |
| (2) <br>(3) <br>(4)  | Approximately $10 million of the net proceeds will be used to expand our direct merchant cash advance portfolio. By allocating additional capital to originations, we intend to increase the volume of directly funded transactions, which carry higher gross margins compared to syndicated deals. Expanding our direct funding base is expected to enhance profitability, improve risk control, and strengthen long-term shareholder returns. <br>We intend to use approximately $10 million of the net proceeds from this offering to repay a portion of our outstanding debt. As of the date of this filing, the Company has approximately $30.0 million of total indebtedness outstanding at an effective annual interest rate of approximately 15% and maturing in June 2026. The repayment of $10.0 million will reduce our aggregate debt balance by roughly one-third, thereby lowering our overall interest expense and improving free cash flow available to support growth initiatives. Reducing this high-cost debt is expected to strengthen our balance sheet, lower our weighted average cost of capital, and enhance financial flexibility. While the remaining balance of our indebtedness will continue to bear interest at the current rate, the partial repayment will provide immediate savings in cash interest expense and better position the Company to access more competitively priced financing in the future. <br>Approximately $2.5 million of the net proceeds will be allocated to the development of artificial intelligence and automation infrastructure to support the growth of our MCA operations. These investments will focus on enhancing our underwriting capabilities, improving fraud detection, streamlining data aggregation, and increasing efficiency across the origination and servicing process. By building scalable technology infrastructure, we aim to lower unit processing costs, accelerate funding timelines, and improve credit performance outcomes. We will prioritize investments that enhance capital efficiency, reduce reliance on manual processes, and position the Company to originate and manage a larger MCA portfolio with greater consistency and profitability over time.  |

---

The expected use of net proceeds from this Offering represents our intentions based on our current plans and business conditions, which could change in the future as our plans and business conditions evolve and change. As of the date of this prospectus, we cannot specify with certainty all of the particular uses for the net proceeds we will have upon completion of this Offering or the order of priority in which we may use such proceeds. Circumstances that may cause us to alter our anticipated uses and allocations of proceeds from this Offering include (i) the size of the Offering and, (ii) our cash flow from operations during fiscal year 2025 . Accordingly, we will retain broad discretion over the use of these proceeds and the Company reserves the right to change the above use of proceeds if management believes it is in the best interests of the Company. In addition, while we have not entered into any agreements, commitments or understandings relating to any significant transaction as of the date of this prospectus supplement, we may use a portion of the net proceeds to pursue acquisitions, joint ventures and other strategic transactions.

A 50% increase (decrease) in the assumed public offering price of $[\*] per share would increase (decrease) the expected net proceeds of the offering to us by approximately $[\*] million, assuming that the number of shares of common stock sold by us remains the same. We may also increase or decrease the number of shares we are offering.

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**CAPITALIZATION**

The following unaudited table sets forth our capitalization as of June 30, 2025:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• on an
 actual basis;

• on pro
 forma as-adjusted basis to reflect the sale of [\*] shares of Common Stock, based on an offering price of $[\*] per share, after deducting
 the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

The pro forma as-adjusted information below is illustrative only and our capitalization following the completion of this Offering is subject to adjustment based on the initial public offering price of our common shares and other terms of this Offering determined at pricing.

You should read this table together with our financial statements and the related notes included elsewhere in this prospectus and the information under "*Management's Discussion and Analysis of Financial Condition and Results of Operations.*"

---

| | |
|:---|:---|
|  | June 30, 2025 |
|  | Pro Forma As Adjusted |
| Cash and cash equivalents | $— |
| Preferred Stock, 100,000,000 shares authorized, par value $0.0001, [\*] shares issued and outstanding, actual, [\*] pro forma as adjusted |  |
| Common stock, 500,000,000 shares authorized, $0.0001 par value, [\*] shares issued and outstanding, actual, [\*] pro forma as adjusted |  |
| Additional paid-in capital |  |
| Accumulated deficit |  |
| Total stockholders' equity (deficit) |  |
| Total capitalization | $— |

---

The number of shares of common stock to be outstanding after this offering is based on [\*] shares outstanding as of June 30, 2025, and does not give effect to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 20,000,000
 shares of our common stock that were reserved for equity awards under our Favo Capital, Inc. 2024 Equity Incentive Plan adopted on
 August 21, 2024;

• 8,000,000
 shares issuable upon exercise of warrants, with an initial exercise price of $0.40 per share;

• 120,000
 shares issuable upon exercise of prefunded warrants, with an initial exercise price of $0.0001 per share; and

• 69,020,000
 shares issuable upon conversion of our outstanding Series A Preferred Stock.

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**MARKET FOR OUR COMMON STOCK**

Our common stock is currently quoted on the OTC Pink under the trading symbol "FAVO." Quotations on the OTC Pink reflect inter-dealer prices, without retail mark-up, mark-down commission, and may not represent actual transactions. On September [\*], 2025, the last reported sale price of our common stock was $[\*] per share.

**Holders**

As of September [\*], 2025, we had approximately 213 shareholders of record of our common stock. The number of stockholders of record does not include certain beneficial owners of our common stock, whose shares are held in the names of various dealers, clearing agencies, banks, brokers and other fiduciaries.

**DIVIDEND POLICY**

We have never declared nor paid any cash dividends on our common stock and currently intend to retain all of our cash and any earnings for use in our business and, therefore, do not anticipate paying any cash dividends in the foreseeable future. Any future determination to pay cash dividends on our common stock will be at the discretion of the Board of Directors and will be dependent upon our consolidated financial condition, results of operations, capital requirements and such other factors as the Board of Directors deems relevant.

**DILUTION**

If you invest in our common stock in this offering, your ownership interest will be diluted immediately to the extent of the difference between the public offering price per share of our common stock and the as adjusted net tangible book value per share of our common stock immediately after this offering.

Our net tangible book value is the amount of our total tangible assets less our total liabilities. Net tangible book value per share is determined by dividing the net tangible book value of our Company by the number of outstanding shares of our common stock.

Our net tangible book value as of June 30, 2025 was a negative $(), or $() per share of common stock (based upon [\*] shares of common stock outstanding).

Pro forma as adjusted net tangible book value is our net tangible book value after taking into account the effect of the sale of common stock in this offering at the assumed public offering price of $[\*] per share and after deducting the underwriting discounts and commissions and other estimated offering expenses payable by us. Our pro forma as adjusted net tangible book value as of September 30, 2024, would have been approximately $[\*], or $[\*] per share. This amount represents an immediate increase in as adjusted net tangible book value of approximately $[\*] per share to our existing stockholders, and an immediate dilution of $[\*] per share to new investors participating in this offering. Dilution per share to new investors is determined by subtracting pro forma as adjusted net tangible book value per share after this offering from the public offering price per share paid by new investors.

The following table illustrates this per share dilution:

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| | |
|:---|:---|
| Assumed public offering price per share | $— |
| Net tangible book value per share as of June 30, 2025 | $() |
| Pro forma net tangible book value per share as of June 30, 2025 | $— |
| Increase in as adjusted net tangible book value per share after this offering | $— |
| Pro forma as adjusted net tangible book value per share after giving effect to this offering | $— |
| Dilution in as adjusted net tangible book value per share to new investors | $— |

---

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A $1.00 increase (decrease) in the assumed public offering price of $[\*] per share would increase (decrease) the as adjusted net tangible book value per share by $[\*], and the dilution per share to new investors in this offering by $[\*], assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the underwriting discounts and commissions and estimated offering expenses payable by us.

The information above assumes that the underwriter does not exercise its over-allotment option. If the underwriter exercises its over-allotment option in full, the as adjusted net tangible book value will increase to $[\*] per share, representing an immediate increase to existing stockholders of $[\*] per share and an immediate dilution of $[\*] per share to new investors.

We may choose to raise additional capital due to market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of these securities could result in further dilution to our stockholders.

The above discussion and table are based on [\*] shares outstanding as of June 30, 2025. The discussion and table do not include (except as otherwise indicated), as of that date:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 20,000,000
 shares of our common stock that were reserved for equity awards under our Favo Capital, Inc. 2024 Equity Incentive Plan adopted on
 August 21, 2024;

• 8,000,000
 shares issuable upon exercise of warrants, with an initial exercise price of $0.40 per share;

• 120,000
 shares issuable upon exercise of prefunded warrants, with an initial exercise price of $0.0001 per share; and

• 69,020,000
 shares issuable upon conversion of our outstanding Series A Preferred Stock.

**DESCRIPTION OF THE BUSINESS**

**Company Overview**

We are a diversified financial services company with two complementary business platforms: Private Credit and Real Estate. Our strategy is to provide alternative financing solutions to small and medium-sized businesses (SMBs) underserved by traditional lenders, while also building a portfolio of income-producing and value-enhancing real estate assets. Together, these businesses are designed to broaden our revenue base, strengthen the balance sheet with tangible assets, and support long-term, capital-efficient growth.

The Private Credit Division provides revenue-based funding and related financing products to SMBs nationwide. Since 2020, we have originated more than $153 million in funding and supported over 10,000 businesses across the United States. The Real Estate Division, launched in 2025, targets strategic investments in residential, mixed-use, and commercial properties designed to generate stable rental income and have the potential for long-term value appreciation. These real estate holdings improve our overall capital efficiency by anchoring the balance sheet with durable, income-producing assets, lowering our blended cost of capital, and providing recurring cash flows that enhance liquidity management.

While each division operates independently, they are designed to complement one another. The real estate business provides steady, long-term income and strengthens overall financial stability, while the private credit business offers faster-turnover funding with attractive near-term returns. Together, they create a balanced model in which real estate adds stability and efficiency, while private credit drives growth.

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 **Private Credit Overview**

Our Private Credit Division provides alternative financing solutions to SMBs across the United States. The core of our business is the origination and funding of merchant cash advances (MCAs), both directly and through syndication arrangements with our partners. These MCA activities represent our principal line of business and generate the substantial majority of our revenues.

Since 2020, we have originated over $153 million in capital and supported more than 10,000 SMBs nationwide. We are headquartered in Fort Lauderdale, Florida, with operations in New York and the Dominican Republic. In addition to our MCA business, we occasionally act as a broker for other funders, earning commissions when SMB customers we refer obtain financial products such as MCA or lines of credit. These brokerage activities are ancillary to our MCA operations and represent a smaller portion of our business.

Our MCA business is conducted through operating subsidiaries that sit under our private credit holding company. These subsidiaries include FAVO Funding LLC, Honeycomb LLC, and Fore Funding LLC, which originate and service MCA transactions. Our brokerage activities, which consist of referring merchants to third-party funders and earning commissions, are conducted through Fore Funding LLC and DBOSS Funding LLC, also held within the same private credit platform.

 **Merchant Cash Advances**

Merchant cash advances ("MCAs") have evolved as an alternative capital source primarily for small businesses, and they represent the principal product we currently originate and fund. In our MCA transactions, a merchant sells a portion of its future receipts to us at a discount in exchange for an upfront lump-sum payment. The merchant then remits a specified percentage of its sales receipts, typically through daily Automated Clearing House ("ACH") transfers, until we have received the full amount of purchased receipts.

Unlike loans or securities, MCAs are structured as purchases and sales of future receipts and the assignment of related rights. Our small and medium-sized business ("SMB") customers typically use these advances for working capital, such as inventory purchases, equipment financing, or other immediate business needs.

While MCAs represent the substantial majority of our revenues today, we also generate brokerage income on a limited basis by referring merchants to third-party funders for products such as MCAs and lines of credit. These brokerage activities account for a smaller share of our business relative to our directly originated and syndicated MCA portfolios.

We operate a direct and syndication revenue-based funding platform to serve SMBs in need of liquidity to fulfill their financial responsibilities. Through our direct sales, marketing, underwriting, and operational platform, and in collaboration with our six primary Syndication Partners, each of which operates in the same revenue-based financing business as FAVO Capital, we provide funding solutions for customers. These syndication arrangements allow us to participate in a percentage of approved transactions, with participation amounts ranging from 10% to 95% of the deal value. Pursuant to Master Participation Agreements and related agreements, FAVO Capital not only originates and funds transactions but also provides servicing and collection services on behalf of itself and its Syndication Partners. This structure enables us to diversify risk, leverage partner deal flow, and expand the scale of our funding platform while maintaining consistency with our underwriting criteria.

We originate and provide revenue-based financing to businesses primarily through MCAs. We provide convenient, fully automated financial solutions to our customers. An SMB customer who enters into an MCA commits to delivering a percentage of its receipts through ACH or wire debits or by splitting credit card receipts until all purchased receipts are remitted to us.

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We believe traditional lenders face a number of challenges and limitations that make it difficult to address the capital needs of SMBs, such as:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ▪ *Organizational and Structural Challenges*. The costly combination of physical branches and manually intensive underwriting procedures makes it difficult for traditional lenders to efficiently serve SMBs. They also serve a broad set of customers, including both consumers and enterprises, and are not solely focused on addressing the needs of SMBs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ▪ *Technology Limitations*. Many traditional lenders use legacy or third-party systems that are difficult to integrate or adapt to the shifting needs of small businesses. These technology limitations make it challenging for traditional lenders to aggregate new data sources, leverage advanced analytics and streamline and automate credit decisions and funding.

 *Products not Designed for SMBs*. SMBs are not well served by traditional loan products. We believe that traditional lenders often offer products characterized by larger loan sizes, longer durations and rigid collateral requirements. By contrast, SMBs often seek small loans for short-term investments.

As a result, we believe that SMBs feel underserved by traditional lenders. Our solution was built specifically to address SMBs' capital needs. We offer products to SMBs to enable them to access capital. We facilitate eligible merchants to secure cash advances and accelerate the growth of their business by providing access to simple, fast, and convenient working capital under MCAs. This structure has some advantages over the structure of a conventional loan. Most importantly, payments towards an MCA can be modified for hardships suffered by a business, giving the merchant greater flexibility with which to manage their cash flow, particularly during an unforeseen event. MCAs are processed much faster than a typical loan, giving borrowers quicker access to capital.

 **Direct and Syndicated Funding**

A key challenge in the merchant cash advance industry is securing sufficient capital to meet strong demand from small businesses. We address this challenge through two complementary channels: (i) direct funding, where we originate, underwrite, fund, and service MCAs on our own balance sheet, and (ii) syndicated funding, where we participate alongside six established syndication partners under Master Participation Agreements. Syndication participation levels generally range from 10% to 95% of each transaction, subject to our investment guidelines.

Our direct portfolio consists of MCAs that we originate and service end-to-end, allowing us to capture full economics, including origination and administrative fees. By contrast, syndicated transactions are originated by our partners, with our participation aligned to our underwriting standards. To manage risk, we actively monitor exposures and do not participate in any syndication arrangement where our share would exceed 40% of a partner's total portfolio.

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We generate revenues from both models: (i) factor rate returns, origination, and administrative fees on our direct portfolio, and (ii) participations in syndicated transactions, supplemented by servicing and collection fees earned on receivables we manage on behalf of partners. This approach balances higher-margin direct fundings with the capital efficiency and risk diversification benefits of syndication. The table below outlines key differences between the two models.

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| | | |
|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Aspect** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Direct Funding** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Syndicated Funding** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Definition* | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; A single funder provides the entire merchant cash advance directly. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Multiple funders co-fund a single MCA through a syndication structure. |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Revenue Model* | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Factor-rate revenues accrue entirely to the direct funder. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Revenues are shared pro rata among participants; the lead funder typically earns servicing fees and profit allocations. |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Capital Deployment* | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Fully funded from the company's own capital. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Capital is pooled from several investors, enabling larger transactions. |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Risk Exposure* | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 100% of performance risk rests with the direct funder. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Risk is distributed among participants, limiting exposure for any one investor. |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Underwriting* | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Relies solely on the funder's internal, AI-enabled data-driven underwriting process. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The lead funder applies its underwriting and servicing standards to all participants' portions. |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Funding Scale* | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Constrained by the funder's available reserves. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Greater capacity to fund larger or multiple deals through pooled participation (e.g., 10%–95% of deal size). |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Administration* | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Originator manages servicing, collections, and remittances directly. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The lead funder administers servicing and distributes proceeds to syndicate participants under Master Participation Agreements. |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Economic Participation* | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; All returns (and losses) accrue to the originator. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Returns are distributed according to participation levels; lead funder receives priority servicing fees. |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Speed of Execution* | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Often faster, with fewer parties involved. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; May require additional coordination but leverages partner networks for deal flow. |

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 **Direct vs. Syndicated Funding Structures**

In direct fundings, the merchant enters into a bilateral purchase and sale agreement with a single funder. The funder advances its own capital, bears all risk of non-performance, and retains all revenue, including origination fees, administrative fees, and MCA income. The agreement is relatively straightforward, with no third-party stakeholders.

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By contrast, syndicated fundings involve multiple parties: the merchant, a lead funder, and syndicate participants (investors or co-funders). The merchant contract is executed with the lead funder, while the syndicate participants enter into a Master Participation Agreement (and, where applicable, Independent Sales Organization agreements) governing their respective rights and obligations. These agreements outline servicing authority, profit-sharing mechanics, and the allocation of risk among participants. Syndicated contracts are inherently more complex than direct fundings, as amendments or enforcement actions require coordination among multiple parties.

In direct fundings, the funder provides the entire advance from its own capital and assumes 100% of the exposure. In syndicated fundings, the lead funder may contribute a portion (e.g., 60%) while syndicate partners contribute the balance (e.g., 40%). Losses are borne pro rata, and syndicate participants typically have limited recourse against the lead funder, except in cases of mismanagement or breach of fiduciary duty. Most syndicated MCAs are structured as non-recourse transactions, meaning the risk of merchant non-performance is shared collectively across all participants.

Syndicated transactions may also carry additional costs, such as platform fees charged by syndication partners (generally 3%–5% of remittances), and administrative costs associated with servicing multiple stakeholders. These fees can increase the effective cost of capital relative to direct fundings.

For direct fundings, our revenue includes origination fees, administrative fees, MCA income, and ancillary fees (e.g., non-sufficient funds, collections, Uniform Commercial Code filings), all recognized over the contract term as payments are received.

For syndicated fundings, we do not typically retain origination or administrative fees. Instead, our revenue is derived from:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • our proportionate share of MCA income

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • servicing and collection fees earned as lead funder and servicer, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • rebates from syndication partners, based on portfolio size and volume.

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| | | | |
|:---|:---|:---|:---|
| &nbsp;&nbsp; Year <br>| &nbsp;&nbsp; Direct Funding | &nbsp;&nbsp; Syndicated Funding <br>| &nbsp;&nbsp; Total Funding <br>|
| &nbsp;&nbsp; 2023 | &nbsp;&nbsp; $17284157 | &nbsp;&nbsp; $17351122 | &nbsp;&nbsp; $34635279 |
| &nbsp;&nbsp; 2024 | &nbsp;&nbsp; $12997355 | &nbsp;&nbsp; $18025300 | &nbsp;&nbsp; $31022655 |
| &nbsp;&nbsp; YTD Q2 2025 | &nbsp;&nbsp; $5859035 | &nbsp;&nbsp; $9785698 | &nbsp;&nbsp; $15644733 |

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Our direct funding portfolio has SMBs across multiple segments and industry types, but most of our merchants fall into the services, construction, and retail industries. These include restaurants, construction and development projects, physical fitness facilities, accounting and bookkeeping practices, home furnishings and equipment stores, and automotive repair shops, among others.

The composition of our syndication portfolio closely aligns with that of our direct investments, both of which are strategically shaped by evolving market dynamics. Key determinants include macroeconomic conditions, the influence of domestic and international government policy decisions, and the relative advantages of specific U.S. geographic regions. Regulatory and policy environments, whether supportive or restrictive, impact sector performance and are carefully considered in our portfolio construction and allocation strategy.

Although syndication currently represents a larger share of total funding volume, our strategic priority is to expand direct funding given its higher margin profile and greater control over underwriting and servicing economics. The Simplified Acquisition was undertaken specifically to increase our capacity for direct originations. Over time, we expect direct funding to comprise a greater portion of total originations, with syndication continuing to play a complementary role in providing capital efficiency and risk diversification.

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 ***MCA – Syndication Partners***

We identify leading funders in the industry through market research, funding forums, the Revenue Based Funding Coalition (RBFC), and long-term business relationships, all of which have established underwriting and operational capabilities that allow partners to participate in their deal flow. The RBFC includes funders, brokers, Independent Sales Organizations, and industry vendors that provide technology and operational services to the sector. It was established to educate policymakers and regulators on issues affecting the non-bank commercial finance industry and to support responsible growth of revenue-based financing. At the same time, the MCA industry remains subject to ongoing regulatory scrutiny at both the federal and state levels, and participation in industry groups such as the RBFC reflects our effort to stay aligned with evolving standards and compliance expectations.

We currently maintain relationships with six syndication partners, three core partners and three secondary partners, all of whom operate in the Merchant Cash Advance industry and provide revenue-based financing solutions. From time to time, we syndicate on various deals that our partners have approved for funding, with syndication participation amounts typically ranging from 10% to 95% of the transaction value. These arrangements are governed by Master Participation Agreements and Independent Sales Organization agreements, which establish the terms of engagement and responsibilities of each party.

As part of these syndication arrangements, FAVO Capital originates, funds, and services transactions, including collections, both for its own account and on behalf of its syndication partners. To manage concentration risk, we do not participate in any syndication arrangement where our exposure exceeds 40% of a partner's total portfolio. We also actively manage participation amounts to ensure diversification and maintain a balanced portfolio mix. All syndication partners are provided with investment guidelines aligned with our internal underwriting standards, and they are required to adhere to those criteria, ensuring consistency and risk alignment across all investments. This framework enables FAVO to leverage the scale and capabilities of its partners to expand access to funding for SMBs while maintaining rigorous risk management discipline.

 **Brokered Products**

In addition to our direct and syndicated MCA operations, we act as an intermediary in brokering financial products, earning commissions from funders when transactions close. Within this category, merchant cash advances and lines of credit are the meaningful contributors, while equipment financing and business term loans comprised the balance. Our activity in U.S. Small Business Administration (SBA) loans and invoice factoring was not material during the reporting period, though these products remain available as part of our platform and may contribute to revenues in the future as merchant demand evolves.

Our role in these transactions is limited to acting as an intermediary: we identify merchants with financing needs, match them with appropriate funders, and earn referral or brokerage fees, typically calculated as a percentage of the funded amount, once the transaction is completed. We do not originate or fund these products directly and do not assume credit risk on the underlying obligations.

This brokerage activity complements our MCA operations by broadening merchant relationships and creating repeat commission opportunities. Applications are sourced through marketing initiatives, including online advertising, outbound calling, trade show participation, and referrals, with additional support from a call center located in the Dominican Republic. We maintain relationships with a network of funding sources, such as commercial banks, online lenders, SBA-approved institutions, and factoring companies.

Once a funder approves and funds a transaction, our role is complete, and we earn compensation directly from the funder, typically built into the financing cost. By offering MCAs and lines of credit through third-party partners alongside our direct activities, we diversify our revenue streams and expand our reach, while continuing to maintain our primary focus on revenue-based funding solutions.

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While brokerage commissions represented approximately 20% of our total revenues for the year ended December 31, 2024, we do not view this segment as a core growth driver. We position brokerage primarily as a complementary offering that broadens merchant relationships, rather than as a business line we intend to scale.

 ***MCA - Cost of Sales***

We incur sales commissions costs for direct and syndicated originations. Commission expense is recognized over the term of the deal. Additionally, we incur marketing expenses associated with direct MCA originations. Marketing expenses consist of various lead generation, internet, phone, advertising, and other costs associated with new account originations. Marketing expenses are recognized as incurred.

 ***MCA Platform and Service Fees***

For each Syndicated MCA origination, we are charged a platform or servicing fee. The fee is calculated as a percentage of the advance receipt collected on our behalf and is deducted from the amount disbursed.

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 ***MCA Credit Losses***

Under the current expected credit loss (CECL) model of ASC 326, we recognize an allowance for a portion of the receipts at the time of concluding a deal and additional allowances based on the amount of time since a payment was last received and whether the receivable has been handed over to collections. The approach is based on the Company's internal knowledge and historical default rates over the expected life of the receipts and is adjusted to reflect current economic conditions. This evaluation takes into account the customer's ability and intention to pay the consideration when it is due along with incorporating changes in the forward-looking estimates. If the expected financial condition of the Company's customers were to improve, the allowances may be reduced accordingly.

 **Underwriting Process and Credit Assessment of Merchant Customers** 

Our underwriting process is central to both our direct MCA portfolio and our syndicated funding activities. Each merchant applicant is evaluated using a structured combination of automated data analysis, artificial intelligence (AI), and human review to assess the business's ability to generate consistent receivables and meet repayment obligations.

We apply a multi-step framework designed to filter out higher-risk applicants and identify merchants most likely to perform, with fewer than 5% of applications proceeding to funding. This process integrates anomaly detection and fraud-prevention tools with professional underwriter judgment, allowing us to evaluate applications efficiently while maintaining credit discipline. Over time, this selective approach has resulted in portfolio performance with loss and default levels consistent with the high thresholds established by our underwriting standards.

 ***Integration of Artificial Intelligence and Automation***

We employ a combination of automation, machine learning, and human oversight within our underwriting process. These tools help authenticate documents, identify inconsistencies, and structure raw data into decision-ready formats. Human underwriters remain responsible for final approvals, ensuring that technology outputs are reviewed within a controlled decision framework.

AI-driven capabilities are applied within secure, compliance-oriented environments. All merchant data is collected with applicant consent, either through direct submissions (e.g., bank statements, tax filings, credit reports) or third-party data-aggregation providers. Data is handled under encryption and access-controlled systems. We do not disclose, sell, or repurpose merchant data for non-underwriting uses.

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Key capabilities include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • **Document authentication and fraud detection**: Identifying tampering or inconsistencies in submitted records.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • **Anomaly detection**: Flagging unusual cash-flow activity or mismatches in bank transaction data.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • **Automated structuring**: Converting bank statements and financial documents into standardized data for review.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **•** **Risk scoring**: Predictive models that compare applicants against internal credit parameters.

Applications flagged by automation are escalated for manual review. This blended model allows for efficient processing while maintaining oversight and compliance.

 ***Data Collection and Analysis***

We collect a range of information from merchants during the application process, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Traditional credit bureau data (e.g., consumer and commercial credit histories).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Government and legal records (e.g., state filings, tax records, liens, judgments).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Behavioral and transactional data (e.g., bank activity, repayment patterns, landlord feedback).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Digital presence and reputation data (e.g., online visibility, reviews, social media).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Network-shared performance data from other funders on defaults or fraud.

Because small businesses lack a standardized credit score equivalent to consumer FICO ratings, we supplement bureau data with these alternative sources. Greater emphasis is placed on demonstrated business performance, cash-flow resilience, and repayment history than on an owner's personal credit profile.

Below is a description of our underwriting process for applicant merchants, with four steps to completion.

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| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1. Initial Screening <br>✔ Verify document integrity and application completeness. <br> ✔ Apply automatic decline rules (e.g., prohibited industries, prior defaults, negative banking history). <br> ✔ Use anomaly-detection tools to flag inconsistencies in financial submissions. <br> ✔ Confirm business legitimacy through entity verification and basic fraud checks. <br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2. Full Underwriting <br>✔ Analyze business expenses, legal compliance, and online presence. <br> ✔ Review historical bank statements and repayment trends. <br> ✔ Assess revenue concentration, seasonality, and debt obligations. <br> ✔ Supplement automated scoring with underwriter review. <br> ✔ Price transactions according to internal risk models and repayment capacity. <br>|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3. Approval <br>✔ Transactions are escalated based on size and risk profile: <br> ✔ Up to $35,000: approved by senior underwriters. <br> ✔ $35,000 – $100,000: requires underwriting committee approval.✔ Above $100,000: reviewed by the CFO and requires final approval from the CEO. <br> ✔ Decisions incorporate both model outputs and manual judgment. <br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4. Final Verification and Funding <br>✔ Conduct background checks for legal and financial risks. <br> ✔ Re-verify revenue consistency using most recent bank data. <br> ✔ Confirm terms with a recorded verification call. <br> ✔ Wire transfers are executed by the CFO or Credit Controller, subject to executive authorization.  |

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 ***Efficiency and Risk Considerations***

Our process is designed to be more efficient than traditional bank lending, generally allowing approvals and funding within 24–72 hours versus weeks for banks. Efficiency is achieved through automated data aggregation, AI-driven anomaly detection, and human oversight.

We depend on third-party providers for certain inputs, such as bank-statement verification, credit bureau data, and fraud detection. Disruptions in these services could affect our ability to process applications efficiently, as described in our risk factors.

Over time, we believe that this disciplined, technology-enhanced underwriting process has contributed to portfolio performance consistent with our selective funding standards, supporting stable cash flows and risk-adjusted returns.

 **Real Estate Overview**

Our Real Estate Division, launched in 2025, focuses on acquiring and managing income-producing properties that complement our private credit platform. We target residential, mixed-use, and commercial assets in strategic U.S. markets that provide stable cash flows and have the potential for long-term value appreciation.

The division emphasizes stabilized, cash-flowing properties that diversify revenue streams and strengthen the Company's overall asset base with tangible collateral. By anchoring the balance sheet in real estate, we enhance institutional creditworthiness, improve access to competitively priced financing, and support capital efficiency. These investments are conducted through wholly owned subsidiaries dedicated to property acquisition and management, with the objective of broadening our revenue base and supporting sustainable long-term growth.

 **Strategic Role of the Real Estate Division**

The Real Estate Division plays a complementary role to our MCA and broader private credit operations. Tangible, income-generating real estate assets enhance the depth and quality of our balance sheet, which broadens the collateral base available for institutional financing arrangements and supports access to lower-cost capital. This stronger asset position improves lender confidence and provides flexibility in structuring credit facilities, ultimately enhancing net yields across our MCA originations and related credit activities.

In addition, recurring income from rental streams and condominium sales provides supplemental cash flow that offsets variability inherent in the MCA portfolio. Over time, appreciation in property values may further enhance shareholder value through refinancing or selective asset sales, though the division's primary role is to improve capital efficiency and financial resilience rather than to serve as a direct source of short-term liquidity.

By combining the steady, asset-backed stability of real estate with the faster turnover and scalability of private credit, the Company aims to create a balanced model that enhances credit quality, reduces overall cost of capital, and supports sustainable growth across both business segments.

 **Target Acquisition Strategy**

Our real estate division is focused on acquiring well-located, income-producing properties at attractive entry prices relative to replacement cost or market comparables. We target assets in the US that have strong underlying fundamentals and sustained tenant demand, seeking opportunities where operational, leasing, or capital structure enhancements can drive value creation. Our acquisition approach is disciplined and data-driven, evaluating both current income potential and future upside through repositioning or improved capital deployment.

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Acquisitions are guided by defined financial criteria. We generally target properties expected to deliver internal rates of return (IRR) and capitalization rate spreads that are accretive to our weighted average cost of capital (WACC). We also consider loan-to-value (LTV) thresholds, projected funds from operations (FFO) contribution, and the stability of expected cash flows in assessing each opportunity. This framework provides consistency in evaluating potential transactions and ensures that capital is allocated with the objective of balancing risk, return, and liquidity.

Value creation is achieved through two primary models:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • **Rental Model**: We focus on maintaining high occupancy levels, capturing market rent growth, controlling operating expenses, and implementing targeted capital improvements to enhance tenant experience and asset performance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • **Condominium Model:** Where applicable, we seek to optimize unit pricing, manage sales velocity, and implement focused marketing campaigns to maximize sales proceeds. While condominium projects may involve higher development and redevelopment costs relative to stabilized rental assets, we evaluate them within a disciplined financial framework that considers expected absorption rates, pricing sensitivity, and project-level return thresholds. Our intent is to maintain a balanced mix, with stabilized rental assets representing the core of the portfolio and condominium projects pursued selectively where market demand and projected returns justify the added risk. In condominium transactions, we also assess occupancy and absorption targets as key performance indicators to ensure that projected timelines and sales velocity align with overall capital allocation discipline.

 **Exit Strategies** 

We evaluate multiple exit strategies for each asset at the time of acquisition and throughout the hold period, with the objective of maximizing total return and maintaining flexibility in capital deployment. Our primary strategy is a long-term hold, whereby properties are retained to generate recurring rental income and potential capital appreciation. This approach supports predictable cash flows and strengthens the balance sheet, which in turn improves the Company's overall capital efficiency and weighted average cost of capital (WACC).

Where market conditions, interest rate environments, or asset performance create favorable opportunities, we may pursue a sale, refinancing, or recapitalization to optimize return on invested capital (ROIC). These decisions are guided by disciplined financial criteria, including expected yields, debt costs, and projected cash-on-cash returns, rather than reliance on asset sales for short-term liquidity. Potential strategies may include selling an asset outright, entering into a joint venture with new capital partners, or refinancing to unlock equity while retaining ownership.

For condominium projects, we may implement a phased sell-down strategy to optimize pricing and absorption rates while managing supply risk. Select units may be retained within the rental portfolio to generate ongoing income and preserve long-term optionality. Across all property types, our exit planning is structured to align with long-term capital allocation discipline, balancing current income generation with capital recycling into higher-yielding opportunities.

 **Leasing & Sales** 

We employ a disciplined, market-responsive approach to both leasing and sales activities, designed to optimize occupancy, rental yields, and asset value across its portfolio. For rental assets, lease structures may include fixed-term agreements, percentage-based leases tied to tenant sales performance, or hybrid models that combine base rent with variable components. Renewal options are strategically incorporated to enhance tenant retention, minimize downtime, and maintain consistent revenue streams. Lease terms are negotiated to align with market demand, asset positioning, and long-term strategic objectives, while protecting downside risk through creditworthy tenant selection and appropriate security provisions.

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For assets operated under a condominium sales model, we implement a phased release strategy to manage market absorption and achieve optimal pricing. Units are brought to market in stages, allowing us to respond dynamically to buyer demand, interest rate conditions, and competitive supply. This approach is supported by targeted marketing campaigns, pre-sale strategies, and selective retention of certain units for ongoing rental income or future disposition. By maintaining flexibility in leasing and sales strategies, we seek to balance predictable cash flows with opportunities for potential capital appreciation and value realization.

 **Property Management** 

Our property management practices are designed to preserve and enhance asset value while ensuring the operational integrity of our real estate portfolio. Currently, properties are managed by experienced third-party firms engaged under agreements that include defined performance benchmarks addressing occupancy levels, tenant retention, service quality, and cost efficiency.

Management activities focus on timely and responsive tenant service, preventative maintenance programs to extend the useful life of building systems and improvements, and disciplined control of operating expenses. Performance is monitored on an ongoing basis, with operational adjustments implemented as necessary to maintain market competitiveness, mitigate vacancy risk, and support stable long-term income generation.

 **Performance Monitoring** 

We employ a structured, data-driven approach to monitoring the performance of our real estate assets to ensure they meet targeted financial and operational benchmarks. Key performance indicators include occupancy levels, net operating income (NOI), lease expiration schedules, rent collection trends, and, for condominium projects, sales velocity and absorption rates. These metrics are reviewed regularly at both the property and portfolio levels, enabling management to identify trends, risks, and opportunities in real time.

Insights derived from this monitoring process inform tactical and strategic decisions, including adjustments to marketing campaigns, leasing incentives, and tenant mix optimization. In addition, capital expenditure priorities are continuously reassessed to ensure that property improvements deliver measurable returns and align with evolving market conditions. This active management framework is intended to maintain asset competitiveness, maximize revenue, and preserve long-term value.

 **1818 Park**

 **Overview** 

On July 11, 2025, we entered into multi-entity member interest purchase agreements to acquire 1818 Park, a 281,493-square-foot mixed-use property located in Hollywood, Florida. The asset comprises approximately 237,173 square feet of residential space, 19,737 square feet of commercial space, 16,800 square feet of parking facilities, 5,171 square feet of office space, and 2,612 square feet of storage. The residential component includes 273 rental units in a mix of studios, one-bedroom, two-bedroom, and three-bedroom layouts, of which two are penthouse residences, the largest of which spans 2,319 square feet. The commercial component features a diversified tenant mix including a national bank branch, a hair salon, multiple food and beverage operators, and a 12,000-square-foot food hall. The office component includes one 4,113-square-foot office currently under development and nearing completion. As of August 1, 2025, occupancy was approximately 93%, supported by an established tenant base.

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The acquisition of 1818 Park aligns closely with our real estate division's acquisition criteria. The property was secured at a favorable price relative to replacement cost and market comparables, in a location (Young Circle) characterized by strong population growth, robust tenant demand, and ongoing economic investment. The asset's diversified mix of residential, commercial, and food hall space provides multiple income streams and diversification benefits that reduce reliance on any single segment.

Operationally, we intend to pursue initiatives aimed at enhancing occupancy, optimizing lease terms, and implementing targeted capital improvements to support rental growth and tenant retention. In addition, we are evaluating potential refinancing options with respect to the existing Blackstone senior mortgage loan. Any such refinancing, if achieved, may reduce the interest burden and improve the relationship between operating cash flows and debt service requirements. There can be no assurance, however, that such refinancing will be completed on favorable terms, or at all. These initiatives, together with the property's established tenant base and location within a growth corridor, are expected to strengthen the property's long-term positioning, while also addressing current cash flow challenges.

 **Purchase Price and Consideration** 

On July 11, 2025, we completed the acquisition of the 1818 Park property in Hollywood, Florida through a multi-entity transaction structured as follows:

• Block
 40 Managers, LLC – Acquired 100% of the membership interests in the property management company responsible for day-to-day
 operations, tenant services, and facility oversight.

• Block
 40 Investment Holdings, LLC – Acquired 100% of the membership interests in the investment holding entity, which owns certain
 contractual rights and interests related to 1818 Park.

• Block
 40, LLC – Acquired 100% of the membership interests in the investment holding entity, which holds all assets and certain liabilities
 of the primary property-owning entity, including the real estate, fixtures, and contracts, as well as the existing Blackstone secured
 mortgage debt and other obligations.

The total purchase price was $190 million, structured entirely as a stock-for-liabilities transaction. Consideration consisted of the issuance of shares of our common stock to the sellers and the assumption of certain indebtedness and other liabilities.

Issuing equity rather than using cash or additional debt preserved liquidity for our private credit operations and avoided incremental leverage that could restrict future financing flexibility. The structure strengthened our balance sheet by adding a substantial income-generating real estate asset, which enhances the Company's overall capital efficiency, broadens the collateral base considered by institutional lenders, and supports access to more competitively priced financing. By making the seller a shareholder, the transaction further aligns their interests with the Company's long-term performance and value creation, reinforcing management's focus on sustainable growth and shareholder returns.

This multi-entity structure ensured continuity of operations, preserved key contractual rights, and facilitated a seamless transition for tenants, positioning the asset for operational stability and long-term value creation.

 **Acquisition and Financing Structure**

The acquisition of 1818 Park was completed through the purchase of all of the membership interests of Block 40, LLC, the entity that owns the property and its related liabilities. As a result, the Company acquired indirect ownership of the real estate asset together with the obligations tied to it. As part of this transaction, the Company assumed a senior secured mortgage loan originally in the principal amount of $84.0 million. Following scheduled principal repayments in the weeks after closing, the outstanding loan balance will be reduced to approximately $73.6 million by Q3 2025.

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On June 1, 2022, Block 40 Property, LLC entered into a senior secured mortgage loan in the original principal amount of $84.0 million with Deutsche Bank, maturing on June 1, 2025. On June 1, 2025, Blackstone, as the new holder of the loan, extended the maturity date by one month. On July 1, 2025, Blackstone further extended the maturity date to June 1, 2026. In connection with the June and July 2025 extensions, the interest rate increased from Term SOFR plus 2.75% to Term SOFR plus 3.00%, and the existing interest rate cap agreement remains in effect. As part of the extension agreements, the borrower was also required to make scheduled principal curtailments, which reduce the outstanding loan balance in line with agreed amortization milestones, to approximately $73.6 million.

The loan is secured by a first-priority mortgage lien on the property, an assignment of leases and rents, and certain reserve and cash accounts, and is generally non-recourse subject to customary carve-outs.

 ***Key Loan Features***

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• Borrower:
 Block 40 Property, LLC (entity that owns the property and subsidiary of Block 40, LLC)

**•** Original Loan Amount:
 $84.0 million

**•** Current Balance (post-closing
 repayments): Approximately $73.6 million (expected by Q3 2025)

**•** Lender / Agent: Blackstone
 (successor to Deutsche Bank AG, New York Branch)

**•** Interest Rate: Term
 SOFR + 3.00% per annum (floating)

**•** Interest Rate Protection:
 Interest rate cap agreement in place to mitigate rate risk

**•** Maturity Date: June
 1, 2026

**•** Collateral: First
 priority mortgage lien on 1818 Park, assignment of leases and rents, security interest in reserve/cash management accounts, and collateral
 assignment of the interest rate cap

**•** Recourse: Non-recourse
 except for customary carve-outs (fraud, misappropriation, certain covenant breaches)

**•** Guaranty of Carry
 Costs: Personal guaranties from prior owners covering debt service shortfalls, taxes, insurance, and essential operating expenses

 **EB-5 Investor Exchange Offer**

As part of the July 11, 2025 acquisition of the Block 40 Entities and Hollywood Circle Capital, LLC, we assumed the obligations associated with EB-5 investors in Block 40, LLC. These investors held preferred membership interests with accumulating preferred return features that, absent conversion or repurchase, would have continued indefinitely. The total EB-5 preferred membership interests were included in the $190 million purchase price allocation for the transaction.

Following the acquisition on August 28, 2025, we initiated an offer to these EB-5 investors to exchange their preferred membership interests for shares of our common stock. The objective of this exchange is to reduce the long-term accrual burden associated with the EB-5 preferred return structure, simplify the capital structure, and align the interests of these legacy investors with those of our common stockholders. These obligations are specific to the 1818 Park real estate transaction and are structurally distinct from the Company's other preferred return arrangements in its private credit business.

 **Tenant Base** 

The property generates rental income from both residential and commercial tenants, with residential units comprising the majority of leased space and retail, dining, office, and co-working uses contributing additional revenue. The residential portion consists of multiple unit types, with leases generally structured as fixed-term agreements that include renewal options and periodic rent escalations, and occupancy has remained consistently high across a diversified tenant base. The commercial component includes retail, dining, service, and food hall tenants operating under fixed-rent, percentage-of-sales, and hybrid lease structures, with agreements typically providing base rent, renewal rights, and customary landlord protections, while office and co-working areas are also available for lease to professional tenants and are expected to further contribute to revenue diversification as leasing progresses. No individual tenant represents a material portion of the property's total rental revenue, and the tenant base is diversified across residential and commercial categories, reducing concentration risk and limiting reliance on any single tenant or use type.

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 ***Strategic Integration with Private Credit Operations***

The inclusion of 1818 Park in our real estate portfolio strengthens our balance sheet by adding a sizable income-producing asset that generates recurring cash flows. While the property is subject to a first-priority mortgage, both its operating performance and equity value may be considered by institutional lenders in evaluating our credit profile, which could enhance our ability to obtain or negotiate credit facilities at more favorable terms.

The property's tenant base is diversified across residential and commercial leases. Longer-term commercial leases provide a stable source of revenue, while the recurring turnover and renewal cycle of residential units creates opportunities to adjust pricing in line with prevailing market conditions. This diversification reduces reliance on any single tenant category and mitigates cash flow volatility.

By integrating income-generating real estate into our capital structure, we aim to improve overall capital efficiency by anchoring our balance sheet with tangible assets, providing supplemental cash flows to offset variability in merchant cash advance performance, and supporting access to competitively priced debt financing. This complementary structure aligns with our broader strategy of balancing the higher-velocity nature of private credit activities with the stability and asset backing provided by long-term real estate holdings.

 **Revenue Model and Distribution by Offering**

We generate revenue through two primary business lines: (i) merchant cash advances and related financing solutions for small and medium-sized businesses, and (ii) real estate activities, including the sale of condominium units and the leasing of residential and commercial spaces. For each of these offerings, our revenue model is defined by the contractual terms of our agreements, and our ability to reach customers and counterparties is supported by a mix of direct marketing, referral networks, broker relationships, and strategic partnerships. The following provides a detailed description of how we generate revenue, the types of agreements that govern these activities, our distribution methods, and the degree of customer concentration associated with each line of business.

 **Merchant Cash Advances (MCAs)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • **Revenue Model**: We generate revenue from MCAs primarily through factor rates applied to the purchase of future receipts. These receipts are remitted by merchants via daily or weekly automated debits until the purchased amount is satisfied.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • **Related Agreements:** Each MCA is documented by a standardized purchase and sale agreement, which sets forth the advance amount, purchased receipts amount, remittance schedule, and factor rate. In syndicated MCA transactions, we act as servicer under syndication agreements, earning servicing fees, retained participations, and profit allocations. Syndication agreements generally provide that we manage collections and distribute remittances, with servicing compensation paid on a priority basis.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • **Distribution:** Applications are sourced through direct marketing, referrals, industry partnerships, and independent sales organizations (ISOs). ISOs submit merchant applications under broker agreements, which typically provide for referral compensation based on funded amounts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • **Customer Dependence:** Our MCA activities are diversified across a large number of small and medium-sized businesses. We are not dependent on any single merchant or a small group of merchants, and no individual customer accounts for a material portion of our MCA revenues.

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 **Real Estate Activities**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • **Revenue Model:** Our real estate strategy contemplates generating revenue from both (i) recurring rental income from residential and commercial leases and (ii) the marketing and sale of condominium units. At present, our revenues are derived exclusively from rental income, which is generated under tenant lease agreements providing for monthly rental payments, security deposits, and customary landlord protections. While the marketing and sale of condominium units remain part of our long-term strategy, no condominium sales have been completed to date, and no revenue has been recognized from condominium transactions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • **Related Agreements:** Leasing revenue is governed by lease agreements that specify rental rates, term lengths, renewal options, and maintenance obligations. In the future, condominium sales will be documented through purchase and sale agreements that define purchase price, deposit requirements, and closing conditions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • **Distribution:** We market rental opportunities through broker networks, digital and traditional advertising campaigns, referral programs, and on-site promotional activities directed at potential tenants. In anticipation of future condominium sales, we also maintain marketing infrastructure that can be extended to prospective buyers. In certain cases, we establish relationships with co-investors and developers through joint ventures or co-investment agreements to support property development and positioning.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • **Customer Dependence:** While real estate revenues are inherently more concentrated by project than our MCA activities, we maintain a diversified base of tenants across properties, which reduces reliance on any single tenant. We are not dependent on any single tenant, buyer, or co-investor for our real estate activities.

 **Distribution**

Our financing solutions are marketed and distributed through both direct channels and independent sales organizations (ISOs). A significant percentage of our MCA deal flow is sourced through ISOs, who submit merchant applications to us under broker agreements. We also acquire customers directly through online marketing, referrals, and industry partnerships. We are not dependent on any single customer or a small group of customers for our financing or real estate activities. Our customer base is diversified across a wide range of merchants, developers, and investment partners, which reduces concentration risk and limits dependence on any individual relationship

Our real estate activities currently generate revenue solely from the leasing of residential and commercial spaces within our projects. Leasing revenue is supported by marketing efforts directed at potential tenants, which may include broker networks, digital and traditional advertising, referral programs, and on-site promotional campaigns. While our long-term real estate strategy also contemplates revenue from the marketing and sale of condominium units, no such sales have yet occurred. Compared to our MCA distribution network, real estate revenues are more concentrated by project, but we maintain a diversified base of tenants across properties, which reduces reliance on any single party.

 **Listing on the Nasdaq Capital Market**

Our common stock is currently quoted on the OTC Pink Market. In connection with this offering, we have applied to list our common stock on the Nasdaq Capital Market ("Nasdaq"). If our listing application is approved, we expect to list our common stock on Nasdaq upon consummation of the offering, at which point our common stock will cease to be traded on the OTC Pink Market. No assurance can be given that our listing application will be approved. This offering will occur only if Nasdaq approves the listing of our common stock. Nasdaq listing requirements include, among other things, a stock price threshold. As a result, prior to effectiveness, we will need to take the necessary steps to meet Nasdaq listing requirements, including but not limited to a reverse split of our outstanding common stock (as further discussed below). If Nasdaq does not approve the listing of our common stock, we will not proceed with this offering. There can be no assurance that our common stock will be listed on Nasdaq.

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 **Implications of Being a Controlled Company**

If listed on Nasdaq, we would be a "controlled company" within the meaning of Nasdaq Listing Rule 5615(c) because Vincent Napolitano, Shaun Quin, and Glen Steward (the "Founders"), through a voting agreement governing 10,000,000 shares of Series B Preferred Stock, each with 50 votes per share, collectively control approximately 87% of the voting power of our company.

Upon completion of this Offering, our Founders will have the ability to control the outcome of matters submitted to the shareholders for approval, including the election of directors and any merger, consolidation, or sale of all or substantially all of our assets.

Under the Nasdaq Listing Rules, a company of which more than 50% of the voting power for the election of directors is held by an individual, group, or another company is a "controlled company" and is permitted to elect to rely, and may rely, on certain exemptions from the obligation to comply with certain corporate governance requirements, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ▪ the requirement that a majority of the board of directors consisting of independent directors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ▪ the requirement that a listed company having a compensation committee that is composed entirely of independent directors with a written charter addressing the committee's purpose and responsibilities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ▪ the requirement that we have a corporate governance and nominating committee that is composed entirely of independent directors with a written charter addressing the committee's purpose and responsibilities; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ▪ the requirement for an annual performance evaluation of the nominating and governance committee and compensation committee;

On the other hand, a controlled company must still comply with the exchange's other corporate governance standards. These include having an audit committee and the special meetings of independent or non-management directors. As a "controlled company," we are permitted to elect not to comply with certain corporate governance requirements. Although we do not intend to rely on the controlled company exemptions under the Nasdaq listing standards even if we are deemed a controlled company, we could elect to rely on these exemptions in the future, and if so, you would not have the same protection afforded to shareholders of companies that are subject to all of the corporate governance requirements of the Nasdaq Capital Market.

 **Name Change** 

On August 7, 2025, the Board of Directors and a majority of shareholders of the Company approved a change in the name of the Company from Favo Capital Inc. to Stewards, Inc. The Company has submitted an application with FINRA for a market effective date for the name change, as well as a change in symbol.

 **Reverse Stock Split**

On August 7, 2025, our board and a majority of our shareholders approved a reverse stock split within the range of 1-for-2 to 1-for-100 of our issued and outstanding shares of common stock and authorized the Board, in its discretion, to determine the final ratio in connection with the reverse stock split. The reverse stock split will occur no sooner than the market effective date established by FINRA. The reverse stock split will not impact the number of authorized shares of common stock, which will remain at 500,000,000 shares. The share and per-share information in this prospectus do not reflect the proposed reverse stock split of the issued and outstanding shares of our common stock to occur on or immediately following the effective date of the registration statement of which this prospectus forms a part. This prospectus will be amended by an amendment to this registration statement to reflect the reverse stock split ratio and the effect of such reverse stock split.

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 **Competition** 

The small business lending market is competitive and fragmented. We expect competition to continue to increase in the future. We believe the principal factors that generally determine a company's competitive advantage in our market include the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ▪ less stigma associated with MCAs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ▪ ease of process to apply for MCAs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ▪ brand recognition and trust;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ▪ MCA features;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ▪ MCA product fit for business purpose;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ▪ transparent description of key terms;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ▪ effectiveness of customer acquisition; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ▪ customer experience.

Our principal competitors include traditional banks, revenue-based funders, legacy merchant cash advance providers, and newer, technology-enabled lenders. In our direct space, we face competition from providers of other competing forms of alternative funding that target the same type of small businesses served by the MCA industry and may also compete for use of the capital of potential syndication participants interested in deploying capital in the alternative funding market. While the MCA industry has grown beyond meeting the needs of high-risk businesses and become more well known within the alternative funding market, some of the initial stigma and hesitation towards MCAs remains, and this may provide a competitive advantage to providers of other forms of alternative funding.

The decreasing stigma and recognition of the critical needs of small businesses met by MCA funding has made it an attractive area for well-recognized companies that have not traditionally participated in the alternative funding market. Some of these companies, including Shopify, have created MCA divisions to provide MCA funding as a complementary service to their existing small business customers.

As noted above, a significant issue within the MCA industry is procuring enough capital to meet merchant demand for MCAs. The entry of larger and established companies to the MCA market provides these companies with the advantage of (i) established name recognition, (ii) an existing merchant customer base that can be readily accessed for MCA offerings, potentially producing more volume and reducing third party fees owed for merchant advertising and recruiting, (iii) easier access to capital to support significant MCA volume, (iv) increased access to merchants' financial and payment data, and (v) in the event that regulatory changes cause significant structural changes to the MCA industry, these companies may have greater resources in place to quickly adapt to such changes or be able to absorb the costs of such changes.

While the entry of established companies into the MCA market may increase the competition faced by our business, it also provides a discernable benefit as these companies bring increased credibility and attention to the MCA industry and highlight the availability of MCAs as a viable funding source to a broader array of small businesses.

 **Governmental Regulations** 

The MCA industry is subject to laws and regulations that apply to businesses in general, including laws and regulations that address information privacy, unfair or deceptive acts or practices, and credit reporting, among other legal requirements.

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Because MCAs are structured as purchases and sales of receipts or future cashflow from revenue, instead of loans, the MCA industry has not historically been subject to specific laws and regulations, such as licensing requirements, applicable to lenders. Recently, however, there has been increased legislative and regulatory scrutiny of the MCA industry, which could result in the enactment of specific laws and regulations.

There have been enactments in New York and California and discussions in several other states to implement regulations on the industry. State usury laws may not apply against merchant cash advance providers, but New York and California, for example, have state laws requiring merchant cash advance providers and other nonbank lenders to provide disclosures similar to those required under the Truth in Lending Act. These laws were enacted in order to create more transparency for small business borrowers surrounding their application for credit from nonconventional banking institutes.

There are also federal laws that apply to the industry. The Federal Trade Commission (FTC), for example, has the authority to sue merchant cash advance providers that engage in deceptive or predatory lending practices. Any merchant cash advance provider that engages in unfair or deceptive trade practices can be subjected to compensatory damages, civil penalties, and a permanent injunction from marketing, selling, or collecting merchant cash advances.

The Gramm-Leach-Bliley Act (GLBA) has provisions that prohibit creditors from making false statements to obtain a customer's bank account information. These laws apply to merchant cash advance providers.

Section 1071 of the Dodd-Frank Wall Street Reform and Consumer Protection Act requires covered financial institutions, including merchant cash advance providers, to collect and report to the Consumer Financial Protection Bureau (CFPB) data on small business applications for credit. The rules generally require financial institutions that originate at least 100 small business credit transactions annually to collect and report loan application, origination, and pricing information, as well as certain applicant/borrower demographic information, in a "small business lending application register." For purposes of the rules, a small business is one with no more than $5 million of gross revenues in its most recent fiscal year.

The merchant cash advance industry faces potential regulation from the U.S. Department of Treasury. With the growing emergence of revenue-based funders and merchant cash advance providers as well as concerns raised by small business advocacy groups, the U.S. Department of Treasury (the "Treasury") released a statement outlining its objectives regarding small business financing, calling for more robust small business borrower protections and effective oversight, with commentators arguing that small businesses should receive enhanced protections. The statement also details the Treasury's desire to expand small business access to capital through partnerships between traditional and nontraditional lenders. The Treasury highlights two possible types of partnerships: (i) a referral partnership in which merchants that are unable to meet certain criteria or seeking products not offered by their financial institution are directed to a merchant cash advance provider or other alternative financing provider and (ii) co-branded or whitelabel partnerships, where financial institutions contract with non-traditional lenders to integrate technology services.

The legal requirements applicable to both non-traditional and traditional financing institutions may vary depending on the type of partnership. These laws may include consumer protection statutes and regulations, anti-money laundering regulations, and fair lending requirements, in addition to relevant state laws or regulations. Before engaging in these partnerships, traditional financiers may request all transactions be monitored by the institutions' prudential regulator to the extent and merchant cash advance provider is performing functions on behalf of the financial institution. An increasing number of partnerships may cause the Treasury to re-examine registration requirements for non-traditional financing lenders, including merchant cash advance providers.

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We cannot predict whether there will be any regulations adopted either by the federal government or individual state governments with respect to the merchant cash advance industry. If any such regulations are adopted and implemented, such regulations could place restrictions on the industry that could adversely affect our business.

 **Intellectual Property**

We believe that our intellectual property and proprietary rights are vital to our success. To protect our intellectual property and proprietary rights in our brand, technology, products, services, data, improvements and inventions, we plan to rely on a combination of patent, trademark, copyright, trade secret, and other laws, as well as contractual restrictions on disclosure, such as confidentiality agreements with strategic partners, employees, consultants and other third parties. However, we cannot guarantee that such laws or contractual restrictions will provide us with sufficient protection or that we have entered into confidentiality agreements with each party that has or may have had access to our confidential or proprietary information, know-how or trade secrets.

Furthermore, effective patent, trademark, trade dress, copyright, and trade secret protection may not be available in every region where we conduct business. In addition, the legal standards relating to the validity, enforceability and scope of protection of intellectual property rights are uncertain and still evolving.

**Employees**

We presently have 134 employees: Vincent Napolitano, our Chairman, Chief Executive Officer, Secretary, member of the Board of Directors, and a significant stockholder; Shaun Quin, our President and member of the Board of Directors, and a significant stockholder; Glen Steward, our Chief Strategy Officer and member of the Board of Directors and a significant stockholder; Katy Murless, our Chief Financial Officer effective September 1, 2025; and Vaughan Korte, our Chief Operating Officer effective September 1, 2025. In addition, our team includes 4 software engineers, 3 IT technicians, 20 administration staff, and 5 department managers. The balance of 102 employees are sales personnel located across New York, Florida, and the Dominican Republic.

Over time, we may be required to hire employees or continue to engage independent contractors in order to execute the projects necessary to grow and develop the business. These decisions will be made by our officers and directors, if and when appropriate.

**Properties**

Our real property at 1818 Park is discussed above. The Company has leased the following office locations:

1) 4300 N. University Drive Suite D-105 Lauderhill, Florida 33351. This location has a 3-year lease of which 1 year remains.

2) Calle La Privada esquina Dominicana Numero 96, sector La Paz, Monsenor Nouel, R.D. Bonao, Dominican Republic. This location has a yearly lease with automatic renewal each year. June 2026 is the current expiry.

3) Edificio JJ, en la calle Las Carreras, La Vega, R.D, Dominican Republic. This location has a yearly lease with automatic renewal each year. February 2026 is the current expiry.

4) 1025 Old Country Road, Suite 421, Westbury, NY 11590. The Company currently has a 6-year lease on the premises and is in the 3rd year of the term.

**Legal Proceedings**

Due to the nature of the Company's business, the Company may at times be subject to claims and legal actions. The Company is currently not involved in any material legal proceedings.

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

 *The following discussion should be read in conjunction with our audited financial statements and notes thereto included herein. We caution readers regarding certain forward-looking statements in the following discussion and elsewhere in this prospectus and in any other statement made by, or on our behalf, whether or not in future filings with the Securities and Exchange Commission. Forward-looking statements are statements not based on historical information and which relate to future operations, strategies, financial results or other developments. Forward-looking statements are necessarily based upon estimates and assumptions that are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control and many of which, with respect to future business decisions, are subject to change. These uncertainties and contingencies can affect actual results and could cause actual results to differ materially from those expressed in any forward-looking statements made by, or our behalf. We disclaim any obligation to update forward-looking statements.*

 

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**Results of Operations**

**Below is a summary of the results of operations for the years ended December 31, 2024, and 2023.**

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| | | | | |
|:---|:---|:---|:---|:---|
|  | For the Years Ended | For the Years Ended | | |
|  | December 31, | December 31, | | |
|  | 2024 | 2023 |<br>$Change |% Change |
| Revenue |  |  |  |  |
| &nbsp;&nbsp; Financing fees | $12787262 | $11800228 | $987034 | 8.4% |
|  | 12787262 | 11800228 | 987034 | 8.4% |
| &nbsp;&nbsp; Cost of revenue |  |  |  |  |
| &nbsp;&nbsp; Cost of sales | 2358114 | 3497364 | (1139250) | (32.6 %) |
|  | 2358114 | 3497364 | (1139250) | (32.6 %) |
| &nbsp;&nbsp; Gross profit | 10429148 | 8302864 | 2126284 | 25.6% |
| &nbsp;&nbsp; Operating expenses |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;General and administrative expenses | 7814809 | 5318338 | 2496471 | 46.9% |
| &nbsp;&nbsp; Allowance for credit losses | 4019840 | 5561517 | (1541677) | (27.7%) |
| &nbsp;&nbsp; Professional fees | 2517381 | 1728146 | 789235 | 45.7% |
| &nbsp;&nbsp; Total operating expense | 14352030 | 12608001 | 1744029 | 13.8% |
| &nbsp;&nbsp; Loss from operations | (3922882) | (4305137) | (382255) | (8.9 %) |
| &nbsp;&nbsp; Interest expense | (4643396) | (3350913) | 1292482 | 38.6% |
| &nbsp;&nbsp; Loss on write down of investment | (1917) | (17157) | (15240) | (88.8%) |
| &nbsp;&nbsp; Gain on sale of fixed asset | 4230 |  | 4230 | 100% |
| &nbsp;&nbsp; Foreign exchange loss | (38760) |  | 38760 | 100% |
| &nbsp;&nbsp; Total other income (expenses) | (4679843) | (3368070) | 1311773 | 38.9% |
| &nbsp;&nbsp; Net loss before income taxes | $(8602725) | $(7673207) | 929518 | 12.1% |
| &nbsp;&nbsp; Income tax expenses | (56055) |  | 56055 | 100% |
| &nbsp;&nbsp; Net loss | (8658780) | (7673207) | 985573 | 12.8% |
| &nbsp;&nbsp; Preferred shares interest expense | (462596) | (147955) | 314641 | 212.70% |
| &nbsp;&nbsp; Net loss to common shareholders | (9121376) | (7821162) | 1300214 | 16.6% |
| &nbsp;&nbsp; Net loss per common share – basic and diluted | $(0.10) | $(0.11) | (0.01) | (9.0 %) |
| &nbsp;&nbsp; Weighted average common shares outstanding – basic and diluted | 92638720 | 68039666 | 24599054 | 36.1% |
| &nbsp;&nbsp; Comprehensive loss: |  |  |  |  |
| &nbsp;&nbsp; Net loss | (9121376) | (7821162) | 1300214 | 16.6% |
| &nbsp;&nbsp; Unrealized gain on foreign currency translation | 2671 |  | 2671 | 100% |
| &nbsp;&nbsp; Total comprehensive loss | $(9118705) | (7821162) | 1297543 | 16.6% |

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**Revenue**

Revenue increased by 8.4% in the amount of $987,034 for the year ended December 31, 2024, compared to the same period in 2023. The increase in revenue was mainly as a result of the acquisition of the Simplified Group of Companies. For the year ended December 31, 2024, $2,165,300 of revenue was derived from brokered commissions directly linked to the Simplified Group of Companies. The growth in revenue from the Simplified Group of Companies was offset by a decrease in direct revenue of 7.45% for the year ended December 31, 2024, compared to the year ended 2023 as well as a decrease in syndicated revenue of 8.34% for the year ended December 31, 2024, compared to the year ended 2023. The decline in direct and syndicated revenue is due to decreased deal flow for the year ended December 31, 2024, compared to the year ended 2023.

We expect that our revenues will increase in future quarters as a result of additional capital raised for direct funding expansion as well as the recent real estate acquisition. A increase in direct funding is driven by the acquisition of our own call center which boosts lead generation as well as the onboarding of new ISO partners.

Our cost of revenue decreased by 32.6% in the amount of $1,139,250 for the year ended December 31, 2024, compared to the year ended 2023. The decrease in the cost of revenue is the result of a lower volume of direct and syndicated deals funded for the year. The lower funding volume in syndicated deals has a direct impact on the amount of fees paid as well as commissions paid for funding or participating in a deal. Discounts also declined 37.62% and collection charges on defaulted accounts declined 43.37% for the year ended December 31, 2024 vs December 31, 2023

Gross profit increased by 25.6% in the amount of $2,126,284 for the year ended December 31, 2024, compared to the year ended 2023. The increase in gross profit is the result of the increase in revenue and the acquisition of the Simplified Group of Companies which resulted in additional revenue driven from brokered commissions.

**Operating expenses**

Operating expenses increased by 13.8% in the amount of $1,744,029 for the year ended December 31, 2024, compared to the year ended 2023. Listed below are the major changes to operating expenses:

General and administrative expense increased by $2,496,471 for the year ended December 31, 2024, compared to the year ended 2023, mainly as a result of the acquisition of the Simplified Group of Companies. The total amount of general and administrative expenses related to the Simplified Group of Companies for the year ended December 31, 2024 was $2,839,269

Allowance for credit losses decreased by $1,541,677 for the year ended December 31, 2024, compared to the year ended 2023, mainly as a result of improved underwriting and fewer deals concluded for the year.

Professional fees increased by $789,235 for the year ended December 31, 2024, compared to the year ended 2023, primarily due to costs related to audits and legal fees in relation to the Company's desire to pursue the public listing.

We expect our overall operating expenses to increase on a quarterly basis for the balance of the year and into 2026 as we further implement our business plan. We expect increases in future quarters over all major categories as we engage in efforts to increase brand awareness with our products and services, including advertising campaigns and investor relation services. We also expect an increase in general operating costs and growth initiatives as we ramp up operations and seek to expand them.

We also anticipate that our professional fees will increase following our initial public offering as an SEC reporting issuer, and the increased fees for auditors, accountants and legal professionals for legal and accounting compliance.

**Other expense**

Other expense increased by $1,311,773 for the year ended December 31, 2024, compared to the year ended 2023, primarily as a result of increased interest expense on our outstanding notes.

**Net Loss**

We recorded a net loss of $8,658,780 for the year ended December 31, 2024, as compared with a net loss of $7,673,207 for the year ended 2023.

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 **Below is a summary of the results of operations for the six months ended June 30, 2025, and 2024.**

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Six Months Ended** | **Six Months Ended** | | |
|  | **June 30, 2025** | **June 30, 2024** |<br> **$ Change** |<br> **% Change** |
| &nbsp;&nbsp; Revenue | $6680404 | 6452878 | $227526 | 3.5% |
| &nbsp;&nbsp; Cost of revenue | 1376405 | 1124985 | 251420 | 22.3% |
| &nbsp;&nbsp; **Gross profit** | 5303999 | 5327893 | (23894) | (0.4 %) |
| &nbsp;&nbsp; Operating expenses: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; General and administrative expenses | 4181244 | 3654890 | 526354 | 14.4% |
| &nbsp;&nbsp;&nbsp;&nbsp; Provision for bad debt expense | 1047374 | 2562242 | (1514868) | (59.1%) |
| &nbsp;&nbsp;&nbsp;&nbsp; Professional fees | 1327412 | 1147580 | 179832 | 15.7% |
| &nbsp;&nbsp; **Total operating expenses** | 6556030 | 7364712 | (808682) | (11 %) |
| &nbsp;&nbsp; **Loss from operations** | (1252031) | (2036819) | (784788) | (38.5 %) |
| &nbsp;&nbsp; Other income (expense): |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Interest expense | (2782617) | (2127670) | 654947 | 30.8% |
| &nbsp;&nbsp;&nbsp;&nbsp; Interest income | 64583 |  | 64583 | 100% |
| &nbsp;&nbsp;&nbsp;&nbsp; Loss on write down of investment |  | (1685) | (1685) | (100%) |
| &nbsp;&nbsp;&nbsp;&nbsp; Other loss | (12461) | (12154) | 307 | 2.5% |
| &nbsp;&nbsp; **Total other expenses, net** | (2730495) | (2141509) | 588986 | 27.5% |
| &nbsp;&nbsp; **Net loss before income taxes** | (3982526) | (4178328) | (195802) | (4.7%) |
| &nbsp;&nbsp; Income tax provision |  |  |  |  |
| &nbsp;&nbsp; **Net loss** | (3982526) | (4178328) | (195802) | (4.7%) |
| &nbsp;&nbsp; Preferred shares interest expense | (349212) | (214946) | 134266 | 62.5% |
| &nbsp;&nbsp; **Net loss to common shareholders** | (4331738) | (4393274) | (61536) | (1.4 %) |
| &nbsp;&nbsp; Net loss per common share - basic and diluted | (0.04) | (0.05) | (0.01) | (20 %) |
| &nbsp;&nbsp; Weighted-average common shares outstanding - basic and diluted | 106508850 | 91136916 | 15371934 | 16.9% |
| &nbsp;&nbsp; Comprehensive loss: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Net loss | (4331738) | (4393274) | (61536) | (1.4%) |
| &nbsp;&nbsp;&nbsp;&nbsp; Unrealized gain (loss) on foreign currency translation | 2480 | (453) | 2933 | 647.5% |
| &nbsp;&nbsp; **Total comprehensive loss** | (4329258) | (4393727) | (64469) | (1.5 %) |

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**Revenue**

Revenue increased by 3.5% in the amount of $227,526 for the six months ended June 30, 2025, compared to the same period in 2024. The increase in revenue was a result of increased deal flow for syndicated deals and an increase in brokerage commissions mainly driven by improved call center operations. Brokered commissions increased 44.10% for the six months ended June 30, 2025, compared to the same period in 2024. Direct funding revenue decreased 28.94% and syndicated revenue increased 17.01% for the six months ended June 30, 2025, compared to the same period in 2024. Origination income reduced 40.31% for the six months ended June 30, 2025, compared to the same period in 2024 due to less direct deal volume.

Our cost of revenue increased by 22.3% in the amount of $251,420 for the six months ended June 30, 2025, compared to same period ended 2024. The increase in cost of revenue is mainly the result of increased fees with syndication partners due to the funding mix as well as increased collection fees from defaulted accounts. The increased volume of syndicated deals resulted in a 11.85% increase in fees for the six months ended June 30, 2025, compared to same period ended June 2024. Collection charges on defaulted deals increased from $4,165.01 for the period ended June 2024 to $74.267 for the period ended June 2025.

Gross profit decreased by 0.4% in the amount of $23,894 for the six months ended June 30, 2025, compared to same period ended 2024. The decrease in gross profit is the result of higher cost of sales offset by increased revenue.

We expect that our revenues will increase in future quarters as a result of additional capital raised for direct funding expansion as well as the recent real estate acquisition. A increase in direct funding is driven by the acquisition of our own call center which boosts lead generation as well as the onboarding of new ISO partners.

**Operating expenses**

Operating expenses decreased in the amount of $808,682 for the six months ended June 30, 2025, compared to the same period in 2024. Listed below are the major changes to operating expenses:

General and administrative expense increased by $526,354 for the six months ended June 30, 2025, compared to the same period in 2024, mainly as a result of increased payroll costs driven by the increase in call center agents and higher commissions driven by higher revenue. Payroll costs increased 17.14% for the six months ended June 30, 2025, compared to the same period in 2024. Other drivers for the increase in general and administration expenses include an increase in marketing cost of 23.8% as well as insurance costs (358.91%) due to the implementation of additional insurance policies. Telephone expenses, dues and subscriptions, travel and computer expenses also increased slightly for the six months ended June 30, 2025, compared to the same period in 2024.

Bad Debt allowance for credit losses decreased by $1,514,868 for the six months ended June 30, 2025, compared to the same period in 2024, as a result of lower overall funding and reduced defaults from syndication partners and direct due to better deal management.

Professional fees increased by $179,832 for the six months ended June 30, 2025, compared to the same period in 2024, mainly due to an increase in accounting fees related to audit finalization and quarter closes.

We expect our overall operating expenses to increase on a quarterly basis for the balance of the year and into 2026 as we further implement our business plan. We expect increases in future quarters over all major categories as we engage in efforts to increase brand awareness with our products and services, including advertising campaigns and investor relation services. We also expect an increase in general operating costs and growth initiatives as we ramp up operations and seek to expand them.

We also anticipate that our professional fees will increase following our initial public offering as an SEC reporting issuer, and the increased fees for auditors, accountants and legal professionals for legal and accounting compliance.

**Other expense**

Other expenses increased by $588,986 for the six months ended June 30, 2025, compared to the same period in 2024, primarily as a result of increased interest expenses related to notes payable.

**Net Loss**

We recorded a net loss of $4,331,738 for the six months ended June 30, 2025. The net loss for the same in 2024 was $4,393,274.

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**Liquidity and Capital Resources**

As part of our strategy to strengthen financial sustainability, we are focused on reducing and restructuring our current debt obligations. The company currently holds approximately $35,991,767 million in debt notes, with plans to repay or refinance a substantial portion using proceeds from the IPO and subsequent equity offerings. Our priority is to eliminate the highest-cost debt first, as this will have a direct impact on improving our bottom-line profitability. With annual interest payments currently at approximately $5.5 million, we estimate that reducing our debt load could add between $2.5 million and $5.5 million annually to our net income, depending on the Company's ability to successfully raise sufficient equity to pay down the debt. This could position the Company for profitability within two to 3 years. Additionally, we anticipate that implementing our proprietary software platform across operations will streamline efficiencies without requiring additional capital allocation to operating expenses, allowing for scalable growth without increasing costs.

The following is a summary of the cash and cash equivalents as of June 30, 2025, and December 31, 2024.

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **June 30, 2025** | **December 31, 2024** | &nbsp;&nbsp; **$** <br> **Change**  | **% Change** |
| &nbsp;&nbsp; Cash, cash equivalents and restricted cash | $900109 | 2751386 | $(1851277) | (67.3%) |

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**Summary of Cash Flows**

Below is a summary of our cash flows for the six months ended June 30, 2025 and 2024.

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| | | |
|:---|:---|:---|
|  | **Six Months Ended** | **Six Months Ended** |
|  | **June 30, 2025** | **June 30, 2024** |
| &nbsp;&nbsp; Net cash used in operating activities | (5241052) | (3814831) |
| &nbsp;&nbsp; Net cash provided by (used in) investing activities | (5135189) | (563217) |
| &nbsp;&nbsp; Net cash provided by financing activities | 8525000 | 4300000 |
| &nbsp;&nbsp; Net change in cash, cash equivalents and restricted cash | (1851241) | (78048) |

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**Operating activities**

Net cash used by operating activities was $5,241,052 during the six months ended June 30, 2025, and consisted of a net loss of $4,331,738, and increased by net changes in operating assets and liabilities of $2,999,365, mainly offset by non-cash items including $1,047,374 in bad debt expense.

Net cash used in operating activities was $3,814,831 during the six months ended June 30, 2024, and consisted of a net loss of $4,393,274, offset by net changes in operating assets and liabilities of $2,885,646, and by non-cash items including $2,562,242 in bad debt.

**Investing activities**

Net cash used in investing activities for the six months ended June 30, 2025, was $5,135,189 and consisted of fixed asset and business purchases.

Net cash used in investing activities for the three months ended June 30, 2024, was $563,217 and consisted of the purchase of the business in the Simplified acquisition.

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**Financing activities**

Net cash provided by financing activities was $8,525,000 for the six months ended June 30, 2025, and consisted of proceeds from notes payable and preferred shares proceeds.

Net cash provided by financing activities was $4,300,000 for the six months ended June 30, 2024, and consisted mainly of proceeds from notes payable.

Since our inception, we have financed our operations through private placements of common and preferred stock, convertible notes, and unsecured debt, and we have also issued debt in our company secured by all of our assets. As of June 30, 2025, we had notes payable of $35,991,767. We expect to continue to experience high interest payments in the future as a result of our outstanding liabilities. If we are unable to generate sufficient revenues and/or additional financing to service this debt, there is a risk the lenders will call the notes, secure our assets, as to those applicable secured notes, and demand payment. If after all these recourses are exhausted and the debt becomes unresolvable, like any other company, there's a risk we could go out of business.

**Going Concern**

The Company has an accumulated deficit of $35,848,153 as of December 31, 2024 and a net loss of $8,658,780 and negative cash generated from operating activities of $4,203,154 for the year ended December 31, 2024. These conditions raise substantial doubt regarding the Company's ability to continue as a going concern. However, the Company has established an ongoing source of revenues, but it is currently not sufficient to cover the Company's operating costs, and therefore, the Company is dependent upon debt and equity financing to fund its operations. Management of the Company is making efforts to increase its revenue and raise additional funding until a registration statement relating to an equity funding facility is in effect. In July and August, 2025, the Company raised $1,250,000 through issuance of Series A preferred shares and in July 2025, the Company raised $386,150 through issuance of Common Stock. In July 2025, the Company acquired a mixed use property and management expects to generate additional revenues from the property and improve access to alternative funding partners. While management of the Company believes that it will be successful in its capital formation and planned operating activities, there can be no assurance that the Company will be able to raise additional equity capital or be successful in the development and commercialization of the products it develops or initiate collaboration agreements thereon. The accompanying condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.

**Critical Accounting Policies**

In December 2001, the SEC requested that all registrants list their most "critical accounting polices" in the Management Discussion and Analysis. The SEC indicated that a "critical accounting policy" is one which is both important to the portrayal of a company's financial condition and results, and requires management's most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. There have been no material changes to our critical accounting policies as described in the footnotes to our financial statements for the year ended December 31, 2024; however, we consider our critical accounting policies to be those related to.

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*Principles of Consolidation*

The Company prepares its consolidated financial statements on the accrual basis of accounting. All intercompany accounts, balances and transactions have been eliminated in the consolidation as at, December 31, 2024 and December 31, 2023.

*Revenue Recognition*

 

The Company's main source of revenue is through agreements for the purchase and sale of future receivables/receipts, commonly referred to as a Merchant Cash Advance. Under the contract, the Company will agree to purchase a specified amount of the customer's future receipts/receivables (the "Purchased Amount") at a discount (the average discount being a factor of 1.4), in return for providing the customer with upfront proceeds (the "Purchase Price"). The customer is then contractually required to pay the cash related to the future receivables/receipts based on an estimated period which is dependent on the agreed-upon % of the customer's future receivables/receipts that the customer collects until such time as the purchased receipts have been fully repaid. The average duration of a contract is currently between 8 -12 months. The difference between the Purchased Amount that the customer will repay, and the discounted Purchase Price amount that the Company pays for the future receivables/receipts, is considered the "discount", which reflects the significant collection risk incurred by the Company for its purchase of future receivables/receipts. These purchase of future receipts arrangements do not constitute a revenue contract under ASC 606 "Revenue from Contracts with Customers". Accordingly, the Company accounts for them in accordance with ASC 310 "Receivables".

The Company recognizes revenue on remittances collected by applying the contractual discount to allocate the remittance against the initial principal held as a receivable and revenue. All upfront income from fees, such as origination and processing fees are booked as income on a straight-line method over the initial period of the contract. The same applies to all direct costs incurred upon the execution of the contract, which primarily consists of commissions paid to the Company's internal sales team or external partners for sourcing the contract.

As of December 31, 2024, and 2023, deferred commissions cost included within account receivables was $842,924 and $919,280, respectively. Similarly, deferred origination fees included within account receivables was $192,033 and $335,679 as of December 31, 2024, and 2023, respectively.

Following table provides the revenue recognized from each offering

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| | | |
|:---|:---|:---|
| **Revenue** | **December 31, 2024** | **December 31, 2023** |
| &nbsp;&nbsp; MCAs Income and Fees | $10225976 | $11286626 |
| &nbsp;&nbsp; Brokerage Commissions | 2483084 | 294472 |
| &nbsp;&nbsp; Management fee | 44874 |  |
| &nbsp;&nbsp; Others | 33328 | 219130 |
| &nbsp;&nbsp; Total Revenue | $**12787262** | $**11800228** |

---

 *Variable Interest Entities*

We determine at the inception of each arrangement whether an entity in which we have made an investment or in which we have other variable interests is considered a variable interest entity ("VIE"). We consolidate VIEs when we are the primary beneficiary. We are the primary beneficiary of a VIE when we have the power to direct activities that most significantly affect the economic performance of the VIE and have the obligation to absorb the majority of their losses or benefits. If we are not the primary beneficiary in a VIE, we account for the investment or other variable interests in a VIE in accordance with applicable GAAP.

Periodically, we assess whether any changes in our interest or relationship with the entity affect our determination of whether the entity is a VIE and, if so, whether we are the primary beneficiary.

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*Property, equipment and leasehold improvements.*

 

Property, equipment and leasehold improvements are stated at historical cost less accumulated depreciation and impairment. The historical cost of acquiring an item of property and equipment or undertaking leasehold improvements includes the costs necessarily incurred to bring it to the condition and location necessary for its intended use.

Maintenance and repairs are charged to expense as incurred. When items of property or equipment are sold or retired, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is included in the results of operations. Depreciation is calculated on a straight-line basis over the estimated useful lives of the respective assets.

The estimated useful lives of depreciable assets are as follows:

---

| | |
|:---|:---|
| &nbsp;&nbsp; Computers and equipment | &nbsp;&nbsp; 3-5 years |
| &nbsp;&nbsp; Office furniture and fixtures | &nbsp;&nbsp; 5-7 years |
| &nbsp;&nbsp; Vehicles | &nbsp;&nbsp; 5 years |
| &nbsp;&nbsp; Leasehold improvements | &nbsp;&nbsp; Shorter of the lease term or the estimated useful life |

---

 *Advance receivables*

Advance receivables are recorded at net realizable value, net of an allowance for expected credit losses.

*Credit Losses on Financial Instruments*

For its financial instruments subject to credit risk, consisting of its receivables related to its MCA's, the Company recognizes as an allowance its estimate of lifetime expected credit losses under the current expected credit loss (CECL) model of ASC 326. The approach is based on the Company's internal knowledge and historical default rates over the expected life of the receivables and is adjusted to reflect current economic conditions as well as industry and geographical specific risks. This evaluation takes into account the customer's ability and intention to pay the consideration when it is due along with incorporating changes in the forward-looking estimates. If the expected financial condition of the Company's customers were to improve, the allowances may be reduced accordingly.

Movement of Credit Losses for the Year:

---

| | | |
|:---|:---|:---|
| | **Year ended** | **Year ended** |
| | <br> **December 31**  | <br> **December 31**  |
| | **2024** | **2023** |
| Balance, beginning of period | $16102278 | $10842493 |
| Current period provision | 4019840 | 5561517 |
| Write-offs | (1087141) | (301732) |
| Recoveries |  |  |
| Balance, end of period | $**19034976** | $**16102278** |

---

The Company had increased write-offs for the period ended December 31, 2024 mainly due to the closing of some of the syndication funds in which the Company participated.

The Company will write off any deals that are deemed to be uncollectible as advised by the Company's third-party collections and legal team or in the event the merchant has filed for bankruptcy. With regards to deals where the Company has syndicated on the deal, the write off is done at the time the syndication partner identifies these deals are no longer collectable.

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*Fair Value of Financial Instruments*

ASC 825, "Disclosures about Fair Value of Financial Instruments", requires disclosure of fair value information about financial instruments. ASC 820, "Fair Value Measurements" defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of December 31, 2024 and 2023.

Authoritative literature provides a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument's categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement as follows:

Level 1 - Quoted market prices available in active markets for identical assets or liabilities that the Company has access to at the measurement date.

Level 2 - Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).

Level 3 - Unobservable inputs that reflect our assumptions about the assumptions that market participants would use in pricing the asset or liability.

The respective carrying values of certain on-balance-sheet financial instruments approximate their fair values. These financial instruments include cash, accrued liabilities, convertible note, notes payable, due to and from related parties and advanced receivables. Fair values were assumed to approximate carrying values for these financial instruments due to their short-term maturities.

*Provision for Income Taxes*

The Company accounts for income taxes in accordance with ASC 740 and other authoritative guidance utilizing the asset and liability method. This method requires the recognition of deferred assets or liabilities for the expected future tax consequences of events that have been included in the financial statements. Deferred tax assets or liabilities are calculated as the difference between the financial statements and the tax bases of assets and liabilities applying enacted tax rates in effect for the period in which the differences are expected to settle. The Company records deferred tax assets or liabilities when management determines it is more likely than not that the tax position will be sustained. A valuation allowance is required for deferred tax assets if, based on available evidence, it is more likely than not that all or some portion of the asset will not be realized due to the inability to generate sufficient taxable income in the period or of the character necessary to use the benefit of the deferred tax asset. On the basis of the evaluation, as of December 31, 2024, the Company has recorded a full valuation allowance against the Company's net deferred tax asset.

We record uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which (1) we determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The company has not identified any uncertain tax positions.

We recognize interest and penalties related to unrecognized tax benefits on the income tax expense line in the accompanying consolidated statement of operations. Accrued interest and penalties are included on the related tax liability line in the consolidated balance sheet.

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*Estimates*

 

The financial statements are prepared on the basis of accounting principles generally accepted in the United States of America. 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 as of December 31, 2024 and 2023, and expenses for the years ended December 31, 2024 and 2023, and cumulative from inception. Actual results could differ from those estimates made by management.

 *Stock Subscription Receivable*

Stock subscription receivables are recorded when the shares have been issued against future services from the subscriber. Since the shares had already been issued and the expense will be recorded when the services are received from the subscriber, the Company recorded the amount as stock subscriptions receivable in the equity section of the consolidated balance sheets.

 *Warrants*

The Company accounts for stock warrants granted either as a liability or equity in accordance with ASC 815-40, Derivatives and Hedging — Contracts in Entity's Own Equity ("ASC 815-40"). Under ASC 815-40, contracts that may require settlement for cash are liabilities, regardless of the probability of the occurrence of the triggering event. Liability-classified warrants are measured at fair value on the issuance date and at the end of each reporting period. Any change in the fair value of the warrants after the issuance date is recorded in the consolidated statements of operations and comprehensive loss as a gain or loss. If warrants do not require liability classification under ASC 815-40, in order to conclude warrants should be classified as equity, the Company assesses whether the warrants are indexed to its common stock and whether the warrants are classified as equity under ASC 815-40 or another applicable GAAP standard. Equity-classified warrants are accounted for at fair value on the grant date with no changes in fair value recognized after the issuance date.

The Company has issued warrants to purchase shares of its common stock in connection with its financing activities. The Company classifies these warrants as equity and recorded the warrants at fair value as of the date of issuance on the Company's consolidated balance sheet with no subsequent remeasurement. The issuance date fair value of the outstanding warrants was estimated using the Black-Scholes Model. The Black-Scholes Model required inputs such as the expected term of the warrants, expected volatility and risk-free interest rate. These inputs were subjective and required significant analysis and judgment. For the estimate of the expected term, the Company used the full remaining contractual term of the warrant. The estimate of expected volatility assumption is based on the volatility observed on the Company's peer group. The risk-free rate is based on the yield available on U.S. Treasury zero-coupon issues corresponding to the expected term of the warrants.

 *Syndicate Payable*

A portion of the Company's direct funding portfolio are funded by syndication partners who participate alongside the Company in the deal and therefore economically benefit directly from the performance of the deal but also bare the risk with regards to nonperformance. The syndicated portion of an individual deal will vary based on the size of the deal or the syndicated partners participation threshold. All syndication partners sign participation contracts with the Company which details the relationship between the syndicate partner and the Company as well as any relevant collection fees the Company will receive under the relationship.

All deals and the syndicates participation are tracked separately in the Company's customer relationship management ("CRM") which operates on a wallet basis. The syndicate partner has access to the CRM and therefore has the ability to track the performance of every deal as well as monitor any payments received.

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 *Foreign Currency Translation and Transactions*

The functional currency of our wholly owned subsidiaries is the applicable local currency. The translation of foreign currencies into U.S. dollars is performed for assets and liabilities using current foreign currency exchange rates in effect at the balance sheet date, and for revenues and expense accounts using average foreign currency exchange rates during the period. Capital accounts are translated at historical foreign currency exchange rates. Translation gains and losses are included in stockholders' equity as a component of accumulated other comprehensive income (loss). Adjustments that arise from foreign currency exchange rate changes on transactions denominated in a currency other than the functional currency are included in other loss on the consolidated statements of operations.

*Segment Reporting*

 

The Company's current source of revenue is from one main product, namely Merchant Cash Advances. Our revenue generation is limited to within the United States and although the Company is exploring alternative products to add to its alternative finance offering, none of these have been finalized yet. Our chief operating decision-maker ("CODM") is our Chief Executive Officer ("CEO"). The CEO reviews financial information presented on a consolidated basis for purposes of making operating decisions, assessing financial performance, and allocating resources. We manage our operations and allocate resources as a single operating segment.

*Leases*

 

The Company applies the accounting guidance ASC 842, Leases. The Company determines if an arrangement contains a lease at inception based on whether there is an identified property, plant or equipment and whether the Company controls the use of the identified asset throughout the period of use. Operating leases are included in the accompanying consolidated balance sheets. Operating lease right of use ("ROU") assets represent the Company's right to use an underlying asset for the lease term. Lease liabilities represent the Company's obligation to make lease payments arising from the lease and are included in current and non-current liabilities. Operating lease ROU assets and lease liabilities are recognized at the lease inception date based on the present value of lease payments over the lease term discounted based on the more readily determinable of (i) the rate implicit in the lease or (ii) the Company's incremental borrowing rate (which is the estimated rate the Company would be required to pay for a collateralized borrowing equal to the total lease payments over the term of the lease). Because the Company's operating leases generally do not provide an implicit rate, the Company estimates its incremental borrowing rate based on the information available at lease commencement date for borrowings with a similar term.

The Company's operating lease ROU assets are measured based on the corresponding operating lease liability adjusted for (i) payments made to the lessor at or before the commencement date, (ii) initial direct costs incurred and (iii) tenant incentives under the lease. The Company does not assume renewals or early terminations unless it is reasonably certain to exercise these options at commencement. The Company elected the practical expedient which allows the Company to not allocate consideration between lease and non-lease components. Variable lease payments are recognized in the period in which the obligation for those payments is incurred. In addition, the Company elected the practical expedient such that it does not recognize ROU assets or lease liabilities for leases with a term of 12 months or less of all asset classes. Operating lease expense is recognized on a straight-line basis over the lease term.

 *Business Combinations*

ASC 805, Business Combinations, provides a model for determining whether an acquisition represents a business combination. In order to be a business, the integrated set of activities of the acquired entity needs to have an input and a substantive process that together significantly contribute to the ability to create outputs. The acquired entity must also pass the "Screen Test" which involves determining whether the acquisition represents an in-substance asset acquisition based on whether the fair value of the gross assets acquired is "substantially all" concentrated in a single asset or group of similar assets.

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We use the acquisition method of accounting for business combination transactions, and, accordingly, recognize the fair values of assets acquired and liabilities assumed in our consolidated financial statements. Transaction costs related to the acquisition of the acquired company are expensed as incurred. The allocation of fair values may be subject to adjustment after the initial allocation for up to a one-year period as more information becomes available relative to the fair values as of the acquisition date. The consolidated financial statements include the results of operations of any acquired company since the acquisition date.

 *Goodwill and Intangible Assets*

We recognize the excess of the purchase price over the fair value of identifiable net assets acquired at the acquisition date as goodwill. In accordance with ASC 350, Intangibles-Goodwill and Other ("ASC 350"), Goodwill is not amortized but is reviewed for impairment annually and more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. We first perform a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying value. If the reporting unit does not pass the qualitative assessment, then the reporting unit's carrying value is compared to its fair value. If the fair value of the reporting unit is greater than the reporting unit's carrying value, then the carrying value of the reporting unit is deemed to be recoverable. If the carrying value of the reporting unit is greater than the reporting unit's fair value, goodwill is impaired and written down to the reporting unit's fair value.

Identifiable intangible assets include developed technology, customer relationships, and trade names resulting from acquisitions. Acquired intangible assets are recorded at fair value on the date of acquisition and amortized over their estimated economic lives on a straight-line basis. Acquired intangible assets are presented net of accumulated amortization on the consolidated balance sheets. We review the carrying amounts of intangible assets for impairment at the asset group level whenever events or changes in circumstances indicate that the carrying amount of the asset group may not be recoverable. We measure the recoverability of the asset group by comparing its carrying amount to the future undiscounted cash flows we expect the asset group to generate. If we consider the asset group to be impaired, the impairment to be recognized equals the amount by which the carrying value of the asset group exceeds its fair value. In addition, we periodically evaluate the estimated remaining useful lives of long-lived intangible assets to determine whether events or changes in circumstances warrant a revision to the remaining period of depreciation or amortization.

The Company amortizes intangible assets subject to amortization on the basis of their expected periods of benefit, generally 4 to 10 years. The Company does not have indefinite-lived intangible assets other than goodwill.

Useful life of the intangible assets are as follows:

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| | |
|:---|:---|
|  | &nbsp;&nbsp; **Useful life (In years)** |
| &nbsp;&nbsp; Trade Name | &nbsp;&nbsp; 10 |
| &nbsp;&nbsp; Developed Technology | &nbsp;&nbsp; 4 |
| &nbsp;&nbsp; Customer relationships | &nbsp;&nbsp; 4 |

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 *Deferred Consideration*

The Company elected to account for the deferred consideration under ASC 825, Financial Instruments ("ASC 825"). Accordingly, deferred consideration was recognized at their fair value at the closing of the transaction and are subsequently remeasured each reporting period with changes in fair value recorded in other income (expense) in the consolidated statements of operations and comprehensive loss until settlement. The fair value of the deferred consideration was determined by discounting future payments using the Company's cost of borrowing.

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 *Subsequent Event*

The Company evaluated subsequent events through the date when financial statements are issued for disclosure consideration.

 *Adoption of Recent Accounting Pronouncements*

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280 - Improvements to Reportable Segment Disclosures. ASU 2023-07 will improve reportable segment disclosure requirements, primarily through enhanced annual and interim disclosures about significant segment expenses that are regularly provided to the CODM. The disclosure required under ASU 2023-07 is required for public entities with a single reportable segment. ASU 2023-07 will be effective for the Company for annual periods beginning on January 1, 2024 and interim periods beginning on January 1, 2025. The amendments of this guidance apply retrospectively to all prior periods presented in the consolidated financial statements. Early adoption is permitted. The amendments were applied retroactively to all prior periods presented in the consolidated financial statements and adoption of ASU 2023-07 do not have a material impact on our consolidated financial statements.

 *Recently Issued Accounting Pronouncements*

The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company's Consolidated results of operation, financial position or cash flow.

**MANAGEMENT AND BOARD OF DIRECTORS**

The following table lists, as of the date of this prospectus, the names, ages and positions of the individuals who serve as executive officers and directors of FAVO:

---

| | | | |
|:---|:---|:---|:---|
| **Name** | **Age** | **Principal Positions with Us** | **Date Commenced Serving as Director** |
| Vincent Napolitano | 53 | Chief Executive Officer, Chairman, Secretary and member of the Board of Directors | December 12, 2018 |
| Shaun Quin | 43 | President and member of the Board of Directors | September 15, 2019 |
| Glen Steward | 54 | Chief Strategy Officer and member of the Board of Directors | January 18, 2024 |
| Katy Murless | 41 | Chief Financial Officer and Treasurer | n/a |
| Vaughan Korte | 42 | Chief Operating Officer | n/a |

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Set forth below is a brief description of the background and business experience of our directors and executive officers.

**Vincent Napolitano**

Vincent Napolitano is the Founder, CEO and Director of FAVO Capital, Inc. He has worked for the company for the past 5 years in such capacities. With over two decades of experience in finance and business development, he has been instrumental in establishing the Company as a trusted partner for businesses seeking alternative financial solutions. Prior to founding the Company, Vincent spent 25 years on Wall Street, holding key positions at prominent firms and developing expertise in structuring complex financial deals. He also served as Chief Investment Officer for multiple special purpose vehicles (SPVs), acquiring private stock in pre-IPO unicorn companies such as Facebook and Twitter.

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Aside from that provided above, Vincent does not hold and has not held over the past five years any other directorships in any company with a class of securities registered pursuant to Section 12 of the Exchange Act or subject to the requirements of Section 15(d) of the Exchange Act or any company registered as an investment company under the Investment Company Act of 1940.

Vincent is qualified to serve on our Board of Directors because of his experience and expertise in corporate finance and business development.

**Shaun Quin**

Shaun Quin is a Founding Member, President and Director of FAVO Capital, Inc. He has worked for the company for the past 5 years in such capacities. He oversees the company's mission to provide innovative and efficient private credit solutions to small and medium-sized businesses. With over 20 years of global experience as a partner, investor, and director, Shaun has played a key role in shaping the Company's strategic growth. His expertise in fostering collaboration, building high-performance teams, and developing financial solutions has helped position the company as a leader in private credit.

Aside from that provided above, Shaun does not hold and has not held over the past five years any other directorships in any company with a class of securities registered pursuant to Section 12 of the Exchange Act or subject to the requirements of Section 15(d) of the Exchange Act or any company registered as an investment company under the Investment Company Act of 1940.

Shaun is qualified to serve on our Board of Directors because of his experience and expertise in corporate finance and business development.

**Glen Steward**

Glen Steward serves as Chief Strategy Officer of FAVO Capital, Inc. He has over 28 years of investment and trading experience. For the past 5 years, Mr. Steward has served as Chief Investment Officer, Director, and Shareholder of Foundation Fund Managers; Chief Investment Officer, Director, and Shareholder of Secure Clear Trade Finance; Director and Developer of Southern Spirit Properties (Sardinia Bay Estate project); and Chairman of Stewards Investment Capital.

Aside from the positions noted above, Mr. Steward does not hold and has not held over the past five years any other directorships in any company with a class of securities registered pursuant to Section 12 of the Exchange Act or subject to the requirements of Section 15(d) of the Exchange Act, or any company registered as an investment company under the Investment Company Act of 1940.

Mr. Steward is qualified to serve on our Board of Directors because of his experience in corporate finance, investment management, and business development.

 **Katy Murless**

Katy Murless is the Chief Financial Officer of FAVO Capital, Inc., a position she assumed effective September 1, 2025. She joined Stewards Investment Capital on December 1, 2024, where she served as Head of U.S. Operations with responsibility for corporate finance, private credit, tax structuring, and investment analysis. From mid 2019 to late 2024, Ms. Murless took time away from professional employment to focus on her family. Earlier in her career, she worked at Deloitte in audit and later at Abax Investments as an assistant portfolio manager overseeing the equity portion of a multi-asset fund. A Chartered Financial Analyst (CFA) and Chartered Accountant, she has over 15 years of experience in financial leadership and investment management.

Aside from that provided above, Katy does not hold and has not held over the past five years any other directorships in any company with a class of securities registered pursuant to Section 12 of the Exchange Act or subject to the requirements of Section 15(d) of the Exchange Act or any company registered as an investment company under the Investment Company Act of 1940.

**Vaughan Korte**

Vaughan Korte is the Chief Operating Officer of FAVO Capital, Inc., a position he assumed on September 1, 2025, after serving as the Company's Chief Financial Officer since October 2021 and initially in an advisory capacity for two years. Prior to joining the Company, Vaughan spent a decade at Adidas AG, most recently as Senior Director of Finance for the Middle East and North Africa, where he oversaw financial operations across 60 countries and managed budgets exceeding $500 million. With over 15 years of financial leadership experience, Vaughan now focuses on operational execution and scaling FAVO's business platform, ensuring alignment.

Aside from that provided above, Vaughan does not hold and has not held over the past five years any other directorships in any company with a class of securities registered pursuant to Section 12 of the Exchange Act or subject to the requirements of Section 15(d) of the Exchange Act or any company registered as an investment company under the Investment Company Act of 1940.

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**Significant Employees**

We have no significant employees other than our officers and directors.

**Family Relationships**

No family relationships exist between or among the directors, executive officers, or persons nominated or chosen by us to become directors or executive officers.

**Involvement in Certain Legal Proceedings**

To the best of our knowledge, none of our directors or officers, during the past ten years has:

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

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

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

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

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

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

Except as set forth in this Prospectus, to the Company's knowledge, none of our directors or executive officers has been involved in any transactions with us or any of our directors, executive officers, affiliates, or associates which are required to be disclosed pursuant to the rules and regulations of the SEC.

**Term of Office**

Our directors are appointed for a one-year term to hold office until the next annual general meeting of our stockholders or until removed from office in accordance with our bylaws. Our officers are appointed by our Board of Directors and hold office until removed by the Board of Directors.

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**Committees of the Board**

As a controlled company under Nasdaq Listing Rule 5615(c), we are exempt from certain corporate governance requirements, including the requirement to have a majority of independent directors on our board, an independent nominating committee, and an independent compensation committee. Although we do not intend to rely on the controlled company exemptions under the Nasdaq listing standards even if we are deemed a controlled company, we could elect to rely on these exemptions in the future, and if so, you would not have the same protection afforded to shareholders of companies that are subject to all of the corporate governance requirements of the Nasdaq Capital Market.

Our Board of Directors currently has no separate committees, and our Board of Directors acts as the Audit Committee, Nomination and Corporate Governance committee and the Compensation Committee. The functions of those committees are being undertaken by our Board because we do not currently have any independent directors, and our Board believes that it is essential to establish such committees as this would provide independence and show good corporate governance and benefit our Company. We currently do not have an audit committee financial expert serving on our Board of directors.

The Board is actively searching to identify these key individuals that can be appointed to Non-Executive Board Member roles. These individuals once appointed will make up the majority of the Board.

The Company plans to appoint at least three independent directors to serve on our board of directors and as chairpersons and members of the following committees, which we intend to form prior to the closing of this offering:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Audit
 Committee

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Nominating and Corporate Governance
 Committee

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Compensation Committee

**Shareholder Communications**

Although we do not have a formal policy regarding communications with the Board, shareholders may communicate with the Board by writing to us at 1025 Old Country Road Suite 421 Westbury, New York 11590 Attention: Corporate Secretary or Contact Investor Relations - ir@favocapital.com, Investor Brand Network, 1108 Lavaca Stree, Austin, TX 78701

Shareholders who would like their submission directed to a member of the board may so specify, and the communication will be forwarded, as appropriate.

**Oversight of Risk Management**

Risk is inherent with every business, and how well a business manages risk can ultimately determine its success. We face a number of risks, including economic risks, financial risks, legal and regulatory risks and others, such as the impact of competition. Management is responsible for the day-to-day management of the risks that we face, while our Board has responsibility for the oversight of risk management. In its risk oversight role, our Board of Directors is responsible for satisfying itself that the risk management processes designed and implemented by management are adequate and functioning as designed. Our Board of Directors assesses major risks facing our Company and options for their mitigation in order to promote our stockholders' interests in the long-term health of our Company and our overall success and financial strength. A fundamental part of risk management is not only understanding the risks a company faces and what steps management is taking to manage those risks, but also understanding what level of risk is appropriate for us. The involvement of our full Board of Directors in the risk oversight process allows our Board of Directors to assess management's appetite for risk and also determine what constitutes an appropriate level of risk for our Company. Our Board of Directors regularly includes agenda items at its meetings relating to its risk oversight role and meets with various members of management on a range of topics, including corporate governance and regulatory obligations, operations and significant transactions, risk management, insurance, pending and threatened litigation and significant commercial disputes.

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**Code of Business Conduct and Ethics**

Our Board of Directors has adopted a code of ethical conduct that applies to our principal executive officer, principal financial officer and senior financial management. This code of ethical conduct is embodied within our Code of Business Conduct and Ethics, which applies to all persons associated with our Company, including our directors, officers and employees (including our principal executive officer, principal financial officer, principal accounting officer and controller). In order to satisfy our disclosure requirements under Item 5.05 of Form 8-K, we will disclose amendments to, or waivers of, certain provisions of our Code of Business Conduct and Ethics relating to our chief executive officer, chief financial officer, chief accounting officer, controller or persons performing similar functions on our website promptly following the adoption of any such amendment or waiver.

**EXECUTIVE AND DIRECTOR COMPENSATION**

**Compensation of Named Executive Officers**

The following summary compensation table sets forth information concerning compensation for services rendered in all capacities during years ended 2024 and 2023 awarded to, earned by or paid to our executive officers.

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| | | | | |
|:---|:---|:---|:---|:---|
| **Name and Principal Position** | **Year** | **Salary<br> ($)** | **All Other<br> Compensation<br> ($)** | **Total<br> ($)** |
| Vincent Napolitano | 2024 | $233610 | $706881 | $940491 |
| *Chief Executive Officer, Secretary and Director* | 2023 | $171685 | $707333 | $879018 |
| Shaun Quin | 2024 | $138507 | $395659 | $534166 |
| *President and Director* | 2023 | $128413 | $410550 | $538963 |
| Glen Steward | 2024 | $21841 | $0 | $21841 |
| *Chief Strategy Officer and Director* | 2023 | $0 | $0 | $0 |
| Vaughan Korte | 2024 | $26250 | $184513 | $210763 |
| *Chief Financial Officer and Treasurer* | 2023 | $0 | $163998 | $163998 |

---

Compensation includes payroll, compensation under the management and consulting agreements, vehicle allowance, fuel and medical expenses. The compensation under the management agreement includes payments made to FAVO Holdings LLC, which is currently owned 65% by Vincent Napolitano and 35% by Shaun Quin. The compensation under the consulting agreement includes payments made to Korte LLC, a company owned 50% by Vaughan Korte.

During the years ended December 31, 2024 and 2023, the Company incurred costs of $83,482 and $0, respectively, payable to Korte LLC for CFO services. The Company's CFO has transitioned from a full-time consultant to now an Officer of the Company under the employment agreement effective June 1, 2024.

**Outstanding Equity Awards at Fiscal Year End**

There were no outstanding equity awards held by our executive officers as of December 31, 2024 or 2023.

On August 21, 2024, our Board of Directors approved the adoption of the Favo Capital, Inc. 2024 Equity Incentive Plan (the "Incentive Plan"). The purpose of the Incentive Plan is to foster and promote the Company's long-term financial success and increase stockholder value by motivating performance through incentive compensation. The Incentive Plan is intended to encourage participants to acquire and maintain ownership interests in the Company and to attract and retain the services of talented individuals upon whose judgment and special efforts the successful conduct of our business is largely dependent.

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A total of 20,000,000 shares of common stock are reserved and may be issued under the Incentive Plan. The Incentive Plan provides for the granting of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, stock units, performance shares, performance units and other securities to our employees, officers, directors and consultants.

The Incentive Plan became effective upon its approval by the stockholders holding the majority of the voting power on August 21, 2024, and, unless earlier terminated, will continue until August 21, 2034. No securities have yet been issued under the Incentive Plan.

**Compensation of Directors**

During the year ended December 31, 2024 and 2023, no director of the Company received compensation from us as compensation for their services as director.

The company plans to implement a Director Compensation Policy and Plan in Q2 of 2025.

**Employment Agreements**

On August 21, 2024, our Board of Directors approved employment agreements in favor of our Chief Executive Officer, Vincent Napolitano, and our President, Shaun Quin, our Chief Financial Officer, Vaughan Korte and our Chief Strategy Officer, Glen Steward.

The employment agreement with Mr. Napolitano provides that we will compensate him with a yearly salary of $218,270. Mr. Napolitano will also be compensated with a number of shares of restricted common stock annually, as agreed to by our Board of Directors, and he will be eligible to participate in our 2024 Equity Incentive Plan, where executives may be issued equity in our company, as determined by and within the sole discretion of the Board of Directors. He is entitled to participate in the upcoming bonus program expected to be launched by January 1, 2025. He is also entitled to health and vacation benefits, savings plan benefits, and severance for the remainder of his term unless he is terminated for cause, or he voluntarily terminates. Mr. Napolitano agreed to a three month non-solicit restrictive covenant following departure.

The employment agreement with Mr. Quin provides that we will compensate him with a yearly salary of $138,528. Mr. Quin will also be compensated with a number of shares of restricted common stock annually, as agreed to by our Board of Directors, and he will be eligible to participate in our 2024 Equity Incentive Plan, where executives may be issued equity in our company, as determined by and within the sole discretion of the Board of Directors. He is entitled to participate in the upcoming bonus program expected to be launched by January 1, 2025. He is also entitled to health and vacation benefits, savings plan benefits, and severance for the remainder of his term unless he is terminated for cause, or he voluntarily terminates. Mr. Quin agreed to a three month non-solicit restrictive covenant following departure.

The employment agreement with Mr. Korte provides that we will compensate him with a yearly salary of $33,800. Mr. Korte will also be compensated with a number of shares of restricted common stock annually, as agreed to by our Board of Directors, and he will be eligible to participate in our 2024 Equity Incentive Plan, where executives may be issued equity in our company, as determined by and within the sole discretion of the Board of Directors. He is entitled to participate in the upcoming bonus program expected to be launched by January 1, 2025. He is also entitled to health and vacation benefits, savings plan benefits, and severance for the remainder of his term unless he is terminated for cause, or he voluntarily terminates. Mr. Korte agreed to a three month non-solicit restrictive covenant following departure.

On March 1, 2025, we amended the employment agreement for Mr. Korte, by increasing his bi weekly pay from $1,300.00 to $11,601.60.

On September 1, 2025, Mr. Korte's employment agreement was amended in connection with his transition to Chief Operating Officer to include a monthly car allowance of up to $1,200, together with coverage of insurance premiums.

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The employment agreement with Mr. Steward provides that we will compensate him with a yearly salary of $27,700. Mr. Steward will also be compensated with a number of shares of restricted common stock annually, as agreed to by our Board of Directors, and he will be eligible to participate in our 2024 Equity Incentive Plan, where executives may be issued equity in our company, as determined by and within the sole discretion of the Board of Directors. He is entitled to participate in the upcoming bonus program expected to be launched by January 1, 2025. He is also entitled vacation benefits, savings plan benefits, and severance for the remainder of his term unless he is terminated for cause, or he voluntarily terminates. Mr. Steward agreed to a three month non-solicit restrictive covenant following departure.

On September 1, 2025, we entered into an employment agreement for Ms. Murless.

The employment agreement with Ms. Murless provides that we will compensate her with a yearly salary of $185,000. She does not receive any equity compensation under her agreement. Ms. Murless is entitled to participate in the upcoming bonus program expected to be launched by January 1, 2025. She is also entitled to health and vacation benefits, savings plan benefits, and severance for the remainder of her term unless she is terminated for cause, or she voluntarily terminates. Ms. Murless agreed to a three-month non-solicit restrictive covenant following departure.

**Consulting Agreement**

Effective June 1, 2023, we entered into a consulting agreement with Favo Holdings, LLC to provide management consulting services to our company in exchange for monthly payments of $85,000.

**Pension Benefits and Nonqualified Deferred Compensation**

The Company offers eligible full-time employees participation in a 401K plan. The plan provides for an annual company contribution. In addition, employees may contribute a portion of their salary to the plan.

**SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS**

**AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS**

The following table sets forth the number of shares of our voting stock beneficially owned, as of September [\*], 2025, by (i) those persons known by us to be owners of more than 5% of our voting stock, (ii) each director, (iii) our Named Executive Officers, and (iv) all executive officers and directors as a group:

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Name and Address of<br> Beneficial Owner** | **Common Stock** | **Common Stock** | **Series A<br> Preferred Stock** | **Series A<br> Preferred Stock** | **Series B<br> Preferred Stock** | **Series B<br> Preferred Stock** |
|  | **Number of Shares Owned** | **Percent of Class(1)(2)** | **Number of Shares Owned** | **Percent of Class(1)(2)** | **Number of Shares Owned** | **Percent of Class(1)(2)** |
| Vincent Napolitano(3) | 40399524 |  |  |  |  |  |
| Shaun Quin(4) | 20099913 |  |  |  |  |  |
| Katy Murless |  |  |  |  |  |  |
| Glen Steward(5) | 27541500 |  | 64020000 | 100% | 10000000(7) | 100% |
| Vaughan Korte | 3219062 |  |  |  |  |  |
| All Directors and Executive Officers as a Group (4 persons) |  |  |  |  |  |  |
| 5% Holders |  |  |  |  |  |  |
| Liro Holdings(6) | 11100000 |  |  |  |  |  |

---

\* Less than 1%

(1) Pursuant to Rules 13d-3 and 13d-5 of the Exchange Act, beneficial ownership includes any shares as to which a shareholder has sole or shared voting power or investment power, and also any shares which the shareholder has the right to acquire within 60 days, including upon exercise of common shares purchase options or warrants.

(2) The
 percent of class is based on [\*] shares of common stock outstanding, 64,020,000 shares of Series A Preferred Stock, and 10,000,000
 shares of Series B Preferred Stock outstanding as of September [\*], 2025.

(3) All shares held in VK Nap Family Trust in which Mr. Napolitano has voting and dispositive control.

(4) All shares held by S&T Quin Family Limited Partnership, in which Shaun Quin has voting and disposition control.

(5) Forfront Capital, LLC, Stewards Investment Capital Limited and Stewards International Funds PCC on behalf of the Stewards Private Credit Fund are affiliate shareholders and Glen Steward, our director, Bilal Adam and Nathaniel Tsang Mang Kin have voting and dispositive authority over these shares. Includes 22,642,500 shares of common stock, 64,020,000 shares of Series A Preferred Stock, 4,830,000 shares of common stock available from warrants, and 69,000 shares of common stock available from prefunded warrants. Also includes 10,000,000 shares of Series B Preferred Stock that is subject to a voting agreement in favor of the founders of our company, with our president holding an irrevocable proxy to vote these shares.

(6) Rocco Trotta has voting and dispositive control over these shares.

(7) Forfront Capital, LLC is a party
 to a voting agreement dated [date], under which it agree to vote its Series B Preferred Stock (50 votes per share) at the direction
 of the Founders, as a group, resulting in approximately [\*]% of the total voting power for director elections.

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**Certain Relationships and Related Transactions**

The following is a summary of transactions since the periods ended December 31, 2024 and 2023 to which we have been a party in which the amount involved exceeded the lesser of (i) $120,000 or (ii) one percent of the average of our total assets at year-end for the last two completed fiscal years, and in which any of our then directors, executive officers or holders of more than 5% of any class of our stock at the time of such transaction, or any members of their immediate family, had or will have a direct or indirect material interest. See also "*Executive Compensation*" for additional information regarding compensation of related parties.

On May 31, 2023, the Company entered into an acquisition and financing agreement between the principals of FAVO Group, Vincent Napolitano and Shaun Quin, and Stewards Investment Capital Limited, beneficially owned by Glen Steward. As part of the acquisition, the principals of FAVO Group transferred 100% of their membership interest in Favo Group LLC, FAVO Group Human Resources, LLC, FAVO Funding LLC, Honeycomb Sub Fund LLC, FORE Funding LLC, FORE Funding CA LLC and FAVO Funding CA LLC into FAVO Capital Inc.

On May 31, 2023, we entered into an acquisition and financing agreement between the principals of FAVO Group LLC and Stewards Investment Capital Limited. As part of the acquisition, the principals of FAVO Group transferred 100% of their membership interest in Favo Group LLC, FAVO Group Human Resources, LLC, FAVO Funding LLC, Honeycomb Sub Fund LLC, FORE Funding LLC, FORE Funding CA LLC and FAVO Funding CA LLC into our company. As consideration for the transfer, we agreed to pay a purchase price of $14,200,000 in cash, Senior Secured Notes and Common Stock. We raised the financing for this transaction by selling 18 million shares of our Series A Preferred Stock at $0.25 for total of $4,500,000. Out of this $5 million, $4,500,000 million cash has been to the principles of FAVO Group for the transfer of their membership. Half of this financing was paid on the closing date of this transaction. The remaining $2,000,000 was paid as follows: $1,250,000 on August 31, 2023, and the remaining $750,000 on October 26, 2023.

The Company currently has an outstanding debt note from its acquisition of the FAVO Group of Companies due to Vincent Napolitano and Shaun Quin, dated June 1, 2023, in the aggregate principal face value amount of $4,700,000, which requires payments of $1,500,000 on May 31, 2024, which has been made, $1,600,000 due on May 31, 2025, which has been made, and the final payment due on May 31, 2026 for $1,600,000. The interest rate per annum is variable on the three payments of 6%, 3% and 1%, respectively. The balance due on this note as of December 31, 2024 and 2023, was $3,200,000 and $4,700,000, respectively. The outstanding balance on this note as of June 30, 2025 was $1,600,000.

Effective June 1, 2023, we entered into a consulting agreement with Favo Holdings, LLC (Vincent Napolitano and Shaun Quin) to provide management consulting services to our company in exchange for monthly payments of $85,000. During the years ended December 31, 2024 and 2023 the Company incurred costs of $1,020,000 and $510,000, respectively, under the management agreement between FAVO Holdings LLC and the Company.

During the years ended December 31, 2024 and 2023, the Company received $2,800,000 and $1,366,000 from its revolving note agreement with FAVO Holdings and paid back $4,300,000 and $2,562,000, respectively. The balance due on this note as of December 31, 2024 and 2023, was $0 and $1,500,000, respectively.

During the years ended December 31, 2024 and 2023 the Company paid interest on the notes payable of $210,142 and $268,825, respectively, to FAVO Holdings LLC.

During the years ended December 31, 2024 and 2023 the Company paid expenses on behalf of FAVO Holdings LLC in the amount of $119,587 and $5,945, respectively. As at December 31, 2024 and 2023, $15,418 and $135, respectively, remained outstanding.

On July 7, 2023, the Company issued 15,000,000 shares of common stock to a Stewards Investment Capital Limited to serve on the advisory board for a period of 3 years term as per the advisory board agreement. The Company recorded the issuance of shares as stock subscription receivable, as services are not yet rendered and amortizing the same over the 3 years term. For the years ended December 31, 2024 and 2023, the company amortized an amount of $1,250,004 and $729,169, respectively, from stock subscription receivable. During the years ended December 31, 2024 and 2023, Stewards Investment Capital Limited also received cash compensation of $240,000 and 120,000, respectively, for advisory board services. For the six months ended June 30, 2025 and 2024, the Company amortized an amount of $625,002 each from stock subscription receivable. For the three months ended June 30, 2025 and 2024, the Company amortized an amount of $312,501 each from stock subscription receivable.

On July 17, 2025, the Company entered into a revolving promissory note agreement with VK Nap Family, LLC for $1,500,000, promissory note bears interest at 12% per annum and has a one year term. VK Nap Family LLC is owned by living trusts of Mr. Vincent Napolitano, CEO of the Company and his wife Mrs. Kathleen Napolitano.

Effective August 1, 2025, the Company transferred its 100% interest in FC Sub Fund LLC (the "VIE") to Forfront Capital LLC for a consideration of $1. Forfront is beneficially owned by Glen Steward. The VIE was not previously consolidated by the Company, as the Company was not the primary beneficiary of the VIE. The Company is still continuing its involvement with the entity in the form of a 2% management fee arrangement for managing the VIE's assets.

Also on August 25, 2025, we entered into a Conversion Agreement with Forfront, LLC, an affiliate of our company, for it to convert 10,000,000 shares of Series A Preferred Stock into 10,000,000 shares of our newly created Series B Preferred Stock.

Finally, on August 25, 2025, we entered into Voting Agreement with Forfront, LLC, in which Forfront agreed to vote its shares of Series B Preferred Stock in accordance with the direction of our founders, which includes Vincent Napolitano, Shaun Quin and Glen Steward, with the President of our company receiving an irrevocable proxy from Forefront to vote its shares in accordance with the direction of our founders.

The conversion to Series B Preferred Stock and the Voting Agreement are part of a strategic initiative to streamline our capital structure, enhance governance control during a critical phase involving corporate rebranding, and align leadership with long-term objectives without diluting economic interests of non-affiliate shareholders. The Board determined this related-party transaction to be fair under Nevada law and ratified it by majority voting power.

On September 1, 2025, the Company entered into a debt financing arrangement with Stewards International Funds PCC (on behalf of the Stewards Private Credit Fund), pursuant to which it may raise up to $50 million through the issuance of unsecured and unsubordinated debt notes (the "Favo Debt Notes"). The debt carries a fixed annual interest rate of 8.00%, with a maturity date in August 2030. In connection with this financing, the Company also agreed to issue warrants to the noteholder, exercisable for ordinary shares at a fixed price of $0.76 per share. The warrants are subject to a delayed exercise period, commencing no earlier than 12 months following an IPO or the maturity date, whichever is later, and are structured to minimize dilution around the time of the Company's planned public offering. Proceeds from the issuance of the Favo Debt Notes are to be used exclusively for (i) refinancing existing indebtedness, which currently carries an effective annual interest rate of approximately 15% and matures in June 2026, and (ii) funding the Company's general operational needs. This refinancing is intended to materially reduce cash interest expense, strengthen the Company's balance sheet, and improve financial flexibility to support long-term growth.

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**DESCRIPTION OF CAPITAL STOCK**

We are offering shares of common stock in this offering at an assumed public offering price of $[•] per share. These shares are being issued pursuant to an underwriting agreement between us and the underwriter. You should review the underwriting agreement filed as an exhibit to the registration statement of which this prospectus is a part, for a complete description of the applicable terms and conditions.

This description is intended as a summary and is qualified in its entirety by reference to our amended and restated articles of incorporation (our "Articles") and amended and restated bylaws, which are filed, or incorporated by reference, as exhibits to the registration statement of which this prospectus forms a part and to the applicable provisions of Nevada law.

 **Authorized and Outstanding Capital**

 

Our authorized capital stock consists of 500,000,000 shares of Common Stock, par value $0.0001 per share and 100,000,000 shares of preferred stock, par value $0.0001 per share, with 81,250,000 shares designated as Series A preferred stock and 10,000,000 shares designated as Series B Preferred Stock.

As of September [\*], 2025, there were [\*] shares of Common Stock outstanding, 64,020,000 shares of Series A preferred stock outstanding and 10,000,000 shares of Series B Preferred Stock outstanding.

**Common Stock**

The following is a summary of the material rights and restrictions associated with our Common Stock.

Holders of our common stock are entitled to one vote for each share held of record on all matters submitted to a vote of the stockholders, and do not have cumulative voting rights. Subject to preferences that may be applicable to any outstanding shares of preferred stock, holders of common stock are entitled to receive ratably such dividends, if any, as may be declared from time to time by our Board of Directors out of funds legally available for dividend payments. All outstanding, shares of common stock are fully paid and nonassessable and the shares of common stock to be issued upon completion of this offering will be fully paid and nonassessable. The holders of common stock have no preferences or rights of cumulative voting, conversion, or pre-emptive or other subscription rights. There is no redemption or sinking fund provisions applicable to the common stock. In the event of any liquidation, dissolution or winding-up of our affairs, holders of common stock will be entitled to share ratably in any of our assets remaining after payment or provision for payment of all of our debts and obligations and after liquidation payments to holders of outstanding shares of preferred stock, if any.

**Preferred Stock**

The following is a summary of the material rights and restrictions associated with our Preferred Stock.

We are authorized to issue 100,000,000 shares of preferred stock, $0.0001 par value per share. Pursuant to our Articles, the Board is authorized to authorize and issue preferred stock and to fix the designations, preferences and rights of the preferred stock pursuant to a board resolution without further stockholder authorization. Our Board may designate the rights, preferences, privileges and restrictions of the preferred stock, including dividend rights, conversion rights, voting rights, redemption rights, liquidation preference, sinking fund terms, and the number of shares constituting any series or the designation of any series. The issuance of preferred stock could have the effect of restricting dividends on our Common Stock, diluting the voting power of our Common Stock, impairing the liquidation rights of our Common Stock, or delaying, deterring, or preventing a change in control. Such issuance could have the effect of decreasing the market price of our Common Stock.

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***Series A Preferred Stock*** 

Under the Certificate of Designation, filed on June 5, 2023, holders of Series A Preferred Stock are entitled to a liquidation preference of $0.25 per share, the Stated Value of the preferred stock, over our common stock and Series C Preferred Stock in the event of a dissolution, liquidation or winding up of the company.

After twenty-four months, each share of Series A Preferred Stock may be converted into shares of common stock, the number of which is determined according to the following formula, subject to adjustments for stock splits, stock dividends, recapitalizations, reorganizations, reclassifications, combinations, subdivisions or other similar events: Conversion Amount ($0.25) / Conversion Price ($0.25).

In connection with any conversion, each holder of Series A Preferred Stock is subject to a beneficial ownership limitation of 9.99% of our outstanding common stock. By written notice to the Company, however, any holder may increase or decrease the ownership limitation to any other percentage; provided that (i) any such increase will not be effective until the 61st day after such notice is delivered to the Company, and (ii) any such increase or decrease will apply only to such holder sending such notice and not to any other holder.

The holders of Series A Preferred Stock vote together with the holders of Common Stock, the Series B Preferred Stock and any other class or series of stock entitled to vote thereon as a single class on an as converted basis.

Each holder shall be entitled to receive an annual dividend of six percent (6%) of the Stated Value times the number of Preferred Shares held by such holder payable on a quarterly basis beginning at the end of the Company's fiscal quarter following the original issue date. Dividends on the Preferred Shares are payable, at the Company's option, in (a) cash or (b) shares of the Company's Common Stock or a combination thereof.

The Company may, in its sole discretion, elect to redeem all or a portion of the outstanding Preferred Shares at the Redemption Amount. As used herein, the term "Redemption Amount" shall equal the Stated Value. If the Company does not redeem all of the outstanding Preferred Shares, but instead opts for a partial redemption, it must be done in at least $250,000 increments and for every $250,000 redeemed the Company will issue to the Holder a warrant to purchase 1,000,000 shares of the Company's Common Stock at an exercise price of $0.25 share.

On November 27, 2023, the Company elected to increase its authorized shares of Series A preferred shares from 20,000,000 shares to 81,250,000 shares.

 ***Series B Preferred Stock***

On August 22, 2025, our board and shareholders approved the creation of Series B Preferred Stock and we later filed a certificate of designation with the State of Nevada. The certificate of designation provides that 10,000,000 authorized shares of preferred stock are designated as Series B Preferred Stock. The Series B Preferred Stock shall have no value in the event of the liquidation of our company or any rights to distributions declared by our company. After five years, the Series B Preferred Stock is convertible into shares of Common Stock on a one for one basis. Each share of Series B Preferred Stock is entitled to fifty (50) votes on any matter brought before the voting shareholders of our company.

Also on August 22, 2025, we entered into a Conversion Agreement with Forfront, LLC, an affiliate of our company, for it to convert 10,000,000 shares of Series A Preferred Stock into 10,000,000 shares of our newly created Series B Preferred Stock.

Finally, on August 22, 2025, we entered into Voting Agreement with Forfront, LLC, in which Forfront agreed to vote its shares of Series B Preferred Stock in accordance with the direction of our founders, which includes Vincent Napolitano, Shaun Quin and Glen Steward, with the President of our company receiving an irrevocable proxy from Forefront to vote its shares in accordance with the direction of our founders.

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***Series C Preferred Stock***

 ****

On May 9, 2025, pursuant to Certificate of Designation for the Series C Preferred Stock, Mr. Vincent Napolitano converted 18,750,000 Series C Preferred shares into 18,750,000 shares of common stock at par value $0.0001 of FAVO Capital Inc. On May 9, 2025, all outstanding shares of Series C preferred stock were converted on a one for one basis into common stock and distributed as follows; 1) VK Nap Family LLC, 10,359,375 shares 2) S&T Family Limited Partnership, 5,578,125 shares, and 3) Stewards Investment Capital, 2,812,500 shares.

On August 25, 2025, as a result of there being no outstanding shares of Series C Preferred Stock, we filed a withdrawal of the Certificate of Designation with the Nevada Secretary of State.

**Dividends**

 

We have not paid any cash dividends to our shareholders. The declaration of any future cash dividends is at the discretion of our Board and depends upon our earnings, if any, our capital requirements and financial position, and general economic conditions. It is our present intention not to pay any cash dividends in the foreseeable future, but rather to reinvest earnings, if any, in our business operations.

**Incentive Plan**

On August 21, 2024, our Board of Directors approved the adoption of the Favo Capital, Inc. 2024 Equity Incentive Plan (the "Incentive Plan"). The purpose of the Incentive Plan is to foster and promote the Company's long-term financial success and increase stockholder value by motivating performance through incentive compensation. The Incentive Plan is intended to encourage participants to acquire and maintain ownership interests in the Company and to attract and retain the services of talented individuals upon whose judgment and special efforts the successful conduct of our business is largely dependent.

A total of 20,000,000 shares of common stock are reserved and may be issued under the Incentive Plan. The Incentive Plan provides for the granting of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, stock units, performance shares, performance units and other securities to our employees, officers, directors and consultants.

The Incentive Plan became effective upon its approval by the stockholders holding the majority of the voting power on August 21, 2024, and, unless earlier terminated, will continue until August 21, 2034. No securities have yet been issued under the Incentive Plan.

**Anti-Takeover Effects of Certain Provisions of Our Amended and Restated Articles of Incorporation and Our Bylaws.**

Provisions of our amended and restated articles of incorporation, and our amended and restated bylaws could make it more difficult to acquire us by means of a merger, tender offer, proxy contest, open market purchases, removal of incumbent directors and otherwise. These provisions, which are summarized below, are expected to discourage types of coercive takeover practices and inadequate takeover bids and to encourage persons seeking to acquire control of us to first negotiate with us. We believe that the benefits of increased protection of our potential ability to negotiate with the proponent of an unfriendly or unsolicited proposal to acquire or restructure us outweigh the disadvantages of discouraging takeover or acquisition proposals because negotiation of these proposals could result in an improvement of their terms.

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**Calling of Special Meetings of Stockholders.**

Our Bylaws provide that special meetings of the stockholders, unless otherwise prescribed by statute, may be called by the Company's President or the Secretary by resolution of the Board of Directors or at the request in writing of stockholders owning a majority in amount of the entire capital stock of the corporation issued and outstanding and entitled to vote. The request shall be in writing, specifying the time of such meeting and the general nature of the business proposed to be transacted.

**Removal of Directors; Vacancies.** Vacancies in the Board of Directors including those caused by an increase in the number of directors, may be filled by a majority of the remaining directors, though less than a quorum, or by a sole remaining director, and each director so elected shall hold office until his successor is elected at an annual or a special meeting of the stockholders. The holders of two-thirds of the outstanding shares of stock entitled to vote may at any time peremptorily terminate the term of office of all or any of the directors by vote at a meeting called for such purpose or by a written statement filed with the secretary or, in his absence, with any other officer. Such removal shall be effective immediately, even if successors are not elected simultaneously.

**Amendment of Bylaws.** The Bylaws may be amended by a majority vote of all the stock issued and outstanding and entitled to vote for the election of directors of the stockholders, provided notice of intention to amend shall have been contained in the notice of the meeting. The Board of Directors by a majority vote of the whole Board at any meeting may amend the Bylaws, including Bylaws adopted by the stockholders, but the stockholders may from time to time specify particular provisions of the Bylaws which shall not be amended by the Board of Directors.

**Transfer Agent and Registrar**

ClearTrust, LLC, 16540 Pointe Village Dr. Suite 210 Lutz, FL 33558 +1 813-235-4490 www.cleartrustonline.com.

**Reverse Stock Split**

On August 7, 2025, our board and a majority of our shareholders approved a reverse stock split within the range of 1-for-2 to 1-for-100 of our issued and outstanding shares of common stock and authorized the Board, in its discretion, to determine the final ratio in connection with the reverse stock split. The reverse stock split will occur no sooner than the market effective date established by FINRA. The reverse stock split will not impact the number of authorized shares of common stock, which will remain at 500,000,000 shares. The share and per-share information in this prospectus do not reflect the proposed reverse stock split of the issued and outstanding shares of our common stock to occur on or immediately following the effective date of the registration statement of which this prospectus forms a part. This prospectus will be amended by an amendment to this registration statement to reflect the reverse stock split ratio and the effect of such reverse stock split.

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**UNDERWRITING**

The representative is acting as the sole book-running manager of the offering and as representative of the underwriters named below. Subject to the terms and conditions of the underwriting agreement dated the date of this prospectus, the underwriters named below, through the representative, have severally agreed to purchase, and we have agreed to sell to the underwriters, the following respective number of shares set forth opposite the underwriter's name.

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| | |
|:---|:---|
| **Underwriters** | **Number**<br> of Shares |
| D. Boral Capital |  |
| Total: |  |

---

The underwriters and the representative are collectively referred to as the "underwriters" and the "representative" or "D. Boral," respectively. The underwriters are offering the shares of common stock subject to their acceptance of the shares from us and subject to prior sale. The underwriting agreement provides that the obligations of the several underwriters to pay for and accept delivery of the shares offered by this prospectus are subject to the approval of certain legal matters by their counsel and to certain other conditions. The underwriters are obligated to take and pay for all of the shares offered by this prospectus if any such shares are taken. However, the underwriters are not required to take or pay for the shares of common stock covered by the representative's over-allotment option described below.

The underwriters initially propose to offer part of the shares directly to the public at the offering price listed on the cover page of this prospectus and part to certain dealers at a price that represents a concession not in excess of $[\*] per share under the public offering price. After the initial offering of the shares, the offering price and other selling terms may from time to time be varied by the representative.

**Over-Allotment Option**

We have granted to the representative an option, exercisable within 45 days after the closing of this offering, to purchase up to an additional 15% of the total number of shares to be offered at the initial public offering price, less underwriting discounts and commissions. The representative may exercise this option solely for the purpose of covering over-allotments, if any, made in connection with the offering of the common stock offered by this prospectus.

**Discount, Commissions and Reimbursements**

The following table shows the per share and total public offering price, underwriting discounts and commissions, and proceeds before expenses to us. These amounts are shown assuming both no exercise and full exercise of the representative's option to purchase up to additional shares.

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Per<br> Share** | **Per<br> Share** | **No<br> Exercise** | **No<br> Exercise** | **Full<br> Exercise** | **Full<br> Exercise** |
| Public offering price | $| [\*] | $| [\*] | $| [\*] |
| Underwriting discounts and commissions to be paid by us | $| [\*] | $| [\*] | $| [\*] |
| Proceeds, before expenses, to us | $| [\*] | $| [\*] | $| [\*] |

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We have agreed to be responsible for and to pay all expenses relating to the offering, including, without limitation, (a) all filing fees and expenses relating to the registration of the securities with the SEC; (b) all fees and expenses relating to the listing of the Common Stock on a national exchange, if applicable; (c) all fees, expenses and disbursements relating to the registration or qualification of the securities under the "blue sky" securities laws of such states and other jurisdictions as D. Boral may reasonably designate (including, without

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limitation, all filing and registration fees, and the reasonable fees and disbursements of the Company's "blue sky" counsel, which will be D. Boral's counsel) unless such filings are not required in connection with the Company's proposed listing on a national exchange, if applicable; (d) all fees, expenses and disbursements relating to the registration, qualification or exemption of the securities under the securities laws of such foreign jurisdictions as D. Boral may reasonably designate; (e) the costs of all mailing and printing of the offering documents; (f) transfer and/or stamp taxes, if any, payable upon the transfer of securities from the Company to D. Boral; (g) the fees and expenses of the Company's accountants; (h) all filing fees and communication expenses associated with the review of the offering by FINRA; (i) up to $20,000 of D. Boral's actual accountable road show expenses for the offering; (j) the $29,500 cost associated with D. Boral's use of Ipreo's book building, prospectus tracking and compliance software for the offering; (k) the costs associated with bound volumes of the offering materials as well as commemorative mementos and lucite tombstones in an aggregate amount not to exceed $5,000; and (l) the fees for D. Boral's legal counsel, in an amount not to exceed $175,000.

If the offering is not consummated, then the maximum amount we will pay with respect to D. Boral's external counsel legal costs is $50,000. We have paid $30,000 to D. Boral as an advance to be applied towards reasonable out-of-pocket expenses (the "Advance"). Any portion of the Advance shall be returned back to us to the extent not actually incurred.

We estimate that the total expenses of the offering payable by us, not including the underwriting discount, will be approximate $[\*].

**Bridge Financing**

Other than the underwriting agreement and what follows, the underwriters have had no material relationship with us or any of our affiliates and have not owned any of our securities prior to this offering.

On September 9, 2024, the Company entered into a securities purchase agreement (the "Securities Purchase Agreement") with certain purchasers (the "Purchasers") for the purchase and sale of Company's securities. In an initial closing, the Company issued 8,000,000 of the Common Units, each such Common Unit consisted of one share of the Company's common stock with a par value $0.0001 per share ("Common Stock"), common warrants ("Warrants") to purchase one Common Stock, for every one share of common stock purchased and a pre-funded warrant ("Pre-funded Warrant") to purchase 3/200th share of Common Stock purchased. Pursuant to the Securities Purchase Agreement, the Common Units were sold at a purchase price of $0.25 per share, with five-year Warrants having exercise price of $0.40 per share and the Pre-funded Warrants having exercise price of $0.0001 per share.

The sale of the Units to the Purchasers closed on December 12, 2025. The aggregate gross proceeds to the Company from the December 2024 offering were approximately $2,000,000 before deducting placement agent fees and expenses and other transaction costs of $207,600.

In a second closing, the Company issued 1,750,000 of the Common Units. Pursuant to the Securities Purchase Agreement, the Common Units were sold at a purchase price of $0.25 per share, with five-year Warrants having exercise price of $0.40 per share and the Pre-funded Warrants having exercise price of $0.0001 per share. The sale of the Common Units to the Purchasers closed on July 30, 2025. The aggregate gross proceeds to the Company from the July 2025 offering were approximately $437,500, before deducting placement agent fees and expenses and other transaction costs of $51,350.

The Company issued an additional 5% in common stock and 5% in warrants to all participants of the offering for the first and second closing, in lieu of the effectiveness deadline extension to December 31, 2025. As a result, the Company issued 487,500 shares of common stock and warrants to purchase 487,500 shares of common stock to the investors.

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The securities issued in the offering have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), and until so registered the securities may not be offered or sold absent registration or availability of an applicable exemption from registration.

On May 30, 2024, the Company entered into an engagement agreement (the "Placement Agent Agreement") with D. Boral Capital LLC (the "Placement Agent"), pursuant to which the Placement Agent agreed to serve as placement agent for the issuance and sale of the Units. The Company has agreed to pay the Placement Agent an aggregate fee equal to 10.0% of the gross proceeds received by the Company from the sale of the Units in the offering. The Company will also reimburse the Placement Agent for its expenses up to $50,000.

The Purchase Agreement and the Placement Agent Agreement contains customary representations, warranties and covenants by the Company, customary conditions to closing, indemnification obligations of the Company, the Investors and the Placement Agent, including for liabilities under the Securities Act, other obligations of the parties and termination provisions. The representations, warranties and covenants contained in the Purchase Agreement and the Placement Agent Agreement were made only for purposes of such agreements and as of specific dates, were solely for the benefit of the parties to such agreements and may be subject to limitations agreed upon by the contracting parties.

**Determination of Offering Price**

Before this offering, there has been a limited public market for our common stock. Accordingly, the public offering price will be negotiated between us and the representative. Among the factors to be considered in these negotiations are:

• the
 information set forth in this prospectus and otherwise available to the underwriters;

• the
 prospects for our Company and the industry in which we operate;

• an
 assessment of our management;

• our
 past and present financial and operating performance;

• our
 prospects for future earnings;

• financial
 and operating information and market valuations of publicly traded companies engaged in activities similar to ours;

• the
 prevailing conditions of United States securities markets at the time of this offering; and

• other
 factors deemed relevant.

Neither we nor D. Boral can assure investors that an active trading market will develop for shares of our common stock, or that the shares will trade in the public market at or above the initial public offering price.

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**Underwriters' Warrants**

We have agreed to issue warrants to the representative to purchase a number of shares of Common Stock equal to 3% of the aggregate proceeds sold in this offering at an exercise price per share equal to 125.0% of the public offering price per share sold in this offering. The underwriters' warrants will be exercisable at any time and from time to time, in whole or in part, during the five-year period commencing on the effective date of the offering. The underwriters' warrants also provide for piggyback registration rights, Black Scholes change in control provisions and customary anti-dilution provisions and adjustments in the number and price of such warrants and the shares underlying such warrants resulting from corporate events which would include dividends, reorganizations, mergers, etc. and future issuance of Common Stock or Common Stock equivalents at prices or with exercise and/or conversion prices below the offering price as permitted under FINRA Rule 5110(f)(2)(G).

The underwriters' warrants and the underlying shares may be deemed to be compensation by FINRA and therefore will be subject to FINRA Rule 5110(e)(1). In accordance with FINRA Rule 5110(e)(1), neither the underwriters' warrants nor any of our shares of Common Stock issued upon exercise of the underwriters' warrants may be sold, transferred, assigned, pledged or hypothecated, or be the subject of any hedging, short sale, derivative, put or call transaction that would result in the effective economic disposition of such securities by any person, for a period of 180 days immediately following the commencement date of sales in this offering, subject to certain exceptions. The underwriters' warrants to be received by the representative and related persons in connection with this offering fully comply with transfer restrictions pursuant to FINRA Rule 5110(e)(2).

**Lock-up Agreements**

Each of our officers, directors, and significant shareholders, agrees that, without the prior written consent of the underwriter, it will not, for a period of 180 days after the date of this prospectus (the "Lock-Up Period"), offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of capital stock of the Company or any securities convertible into or exercisable or exchangeable for shares of capital stock of the Company, subject to customary exceptions.

**Tail Period**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. Boral shall be entitled to a cash fee equal to eight percent (8.0%) of the gross proceeds received by the Company from the sale of any equity and/or equity derivative instruments to any investor actually introduced by D. Boral to the Company during the period beginning on [\*], 2025 and ending on the earlier of (i) [\*], 2025, or (ii) the final closing, if any, of the Offering (the "Engagement Period") (a "Tail Financing") and such Tail Financing is consummated during the Engagement Period or within twelve (12) month period following the expiration of the Engagement Period, provided that such financing is by a party actually introduced to the Company in an offering in which we have direct knowledge of such party's participation.

**Right of First Refusal**

Until twelve (12) months from the closing date of this offering, D. Boral shall have an irrevocable right of first refusal, in its sole discretion, to act as sole investment banker, sole book-runner, and/or sole placement agent, for all each and every future public and private equity and debt offerings, including all equity-linked financings (each, a "Subject Transaction") of the Company. D. Boral will have the sole right to determine whether or not any other broker-dealer will have the right to participate in any such offering and the economic terms of any such participation. We agreed not to retain, engage or solicit any additional investment banker, book-runner, financial advisor, underwriter and/or placement agent in a subject transaction without the express written consent of D. Boral.

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**Stabilization, Short Positions, and Penalty Bids**

The underwriters may engage in stabilizing transactions for the purpose of pegging, fixing, or maintaining the price of our Common Stock. Stabilizing transactions permit bids to purchase the underlying Common Stock so long as the stabilizing bids do not exceed a specific maximum. These stabilizing transactions may have the effect of raising or maintaining the market prices of our securities or preventing or retarding a decline in the market prices of our securities. As a result, the price of our Common Stock may be higher than the price that might otherwise exist in the open market. Neither we nor the underwriters make any representation or prediction as to the effect that stabilizing transactions may have on the price of our Common Stock. These transactions may be affected on the Nasdaq Capital Market, in the over-the-counter market, or on any other trading market and, if commenced, may be discontinued at any time.

In connection with this offering, the underwriters also may engage in passive market-making transactions in accordance with Rule 103 of Regulation M under the Exchange Act. In general, a passive market maker must display its bid at a price, not in excess of the highest independent bid for that security. However, if all independent bids are lowered below the passive market maker's bid that bid must then be lowered when specified purchase limits are exceeded. Passive market making may stabilize the market price of the securities at a level above that which might otherwise prevail in the open market and, if commenced, may be discontinued at any time.

Neither we nor the underwriters make any representations or predictions as to the direction or magnitude of any effect that the transactions described above may have on the prices of our securities. In addition, neither we nor the underwriters make any representations that the underwriters will engage in these transactions or that any transactions, once commenced will not be discontinued without notice.

**Electronic Offer, Sale, and Distribution of Shares**

A prospectus in electronic format may be made available on the websites maintained by one or more underwriters or selling group members, if any, participating in this offering. The underwriters may agree to allocate a number of our shares of common stock to underwriters and selling group members for sale to their online brokerage account holders. Internet distributions will be allocated by the representative to underwriters and selling group members that may make Internet distributions on the same basis as other allocations. Other than the prospectus in electronic format, the information on the underwriters' websites and any information contained in any other website maintained by the underwriters is not part of this prospectus or the registration statement of which this prospectus forms a part.

The underwriters do not expect to sell more than 5% of the shares in the aggregate to accounts over which they exercise discretionary authority.

**Other Relationships**

Some of the underwriters and their affiliates have engaged in, and may in the future engage in, investment banking and other commercial dealings in the ordinary course of business with us or our affiliates. They have received, or may in the future receive, customary fees and commissions for these transactions.

**Nasdaq Listing**

In connection with this offering, we have applied to list our common stock on the Nasdaq Capital Market ("Nasdaq") under a symbol reflecting our new name of Stewards, Inc. The closing of this offering is conditioned upon Nasdaq's final approval of our listing application, and there is no guarantee or assurance that our common stock will be approved for listing on Nasdaq.

**Indemnification**

We have agreed to indemnify the underwriters against certain liabilities, including certain civil liabilities arising under the Securities Act or to contribute to payments that the underwriters may be required to make for these liabilities.

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**Offer Restrictions Outside the United States**

Other than in the United States, no action has been taken by us or the underwriters that would permit a public offering of the securities offered by this prospectus in any jurisdiction where action for that purpose is required. The securities offered by this prospectus may not be offered or sold, directly or indirectly, nor may this prospectus or any other offering material or advertisements in connection with the offer and sale of any such securities be distributed or published in any jurisdiction, except under circumstances that will result in compliance with the applicable rules and regulations of that jurisdiction. Persons into whose possession this prospectus comes are advised to inform themselves about and to observe any restrictions relating to the offering and the distribution of this prospectus. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities offered by this prospectus in any jurisdiction in which such an offer or a solicitation is unlawful.

***Canada***

The shares may be sold only to purchasers purchasing, or deemed to be purchasing, as principal that are accredited investors, as defined in National Instrument 45-106 *Prospectus Exemptions* or subsection 73.3(1) of the *Securities Act* (Ontario), and are permitted clients, as defined in National Instrument 31-103 *Registration Requirements, Exemptions and Ongoing Registrant Obligations*. Any resale of the shares must be made in accordance with an exemption from, or in a transaction not subject to, the prospectus requirements of applicable securities laws.

Securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if this prospectus (including any amendment thereto) contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser's province or territory. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser's province or territory for particulars of these rights or consult with a legal advisor.

Pursuant to section 3A.3 (or, in the case of securities issued or guaranteed by the government of a non-Canadian jurisdiction, section 3A.4) of National Instrument 33-105 *Underwriting Conflicts* ("NI 33-105"), the underwriters are not required to comply with the disclosure requirements of NI 33-105 regarding underwriter conflicts of interest in connection with this offering.

***European Economic Area***

In relation to each Member State of the European Economic Area which has implemented the Prospectus Regulation, or each, a Relevant Member State, an offer to the public of any shares of our Common Stock may not be made in that Relevant Member State, except that an offer to the public in that Relevant Member State of any shares of our Common Stock may be made at any time under the following exemptions under the Prospectus Regulation, if they have been implemented in that Relevant Member State:

(i) to
 any legal entity which is a qualified investor as defined in the Prospectus Regulation;

(ii) to
 fewer than 150 natural or legal persons (other than qualified investors as defined in the Prospectus Regulation), subject to obtaining
 the prior consent of the representatives for any such offer; or

(iii) in
 any other circumstances falling within Article 1(4) of the Prospectus Regulation, provided that no such offer of shares of our Common
 Stock shall result in a requirement for the publication by us or any underwriter of a prospectus pursuant to Article 3 of the Prospectus
 Regulation.

For the purposes of this provision, the expression an "offer to the public" in relation to any shares of our Common Stock in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and any shares of our Common Stock to be offered so as to enable an investor to decide to purchase any shares of our Common Stock, and the expression "Prospectus Regulation" means Regulation (EU) 2017/1129.

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***United Kingdom***

Each underwriter has represented and agreed that:

(a) it
 has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement
 to engage in investment activity (within the meaning of Section 21 of the Financial Services and Markets Act 2000 ("FSMA")
 received by it in connection with the issue or sale of the shares of our Common Stock in circumstances in which Section 21(1) of
 the FSMA does not apply to us; and

(b) it
 has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the shares
 of our Common Stock in, from or otherwise involving the UK.

***Hong Kong***

Shares of our Common Stock may not be offered or sold by means of any document other than (i) in circumstances which do not constitute an offer to the public within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong), (ii) to "professional investors" within the meaning of the Securities and Futures Ordinance (Cap.571, Laws of Hong Kong) and any rules made thereunder or (iii) in other circumstances which do not result in the document being a "prospectus" within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong), and no advertisement, invitation or document relating to shares of our Common Stock may be issued or may be in the possession of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere), which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the laws of Hong Kong) other than with respect to shares of our Common Stock which are or are intended to be disposed of only to persons outside Hong Kong or only to "professional investors" within the meaning of the Securities and Futures Ordinance (Cap.571, Laws of Hong Kong) and any rules made thereunder.

***Japan***

No registration pursuant to Article 4, paragraph 1 of the Financial Instruments and Exchange Law of Japan (Law No. 25 of 1948, as amended) (the "FIEL") has been made or will be made with respect to the solicitation of the application for the acquisition of the shares of Common Stock.

Accordingly, the shares of Common Stock have not been, directly or indirectly, offered or sold and will not be, directly or indirectly, offered or sold in Japan or to, or for the benefit of, any resident of Japan (which term as used herein means any person resident in Japan, including any corporation or other entity organized under the laws of Japan) or to others for re-offering or re-sale, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan except pursuant to an exemption from the registration requirements, and otherwise in compliance with, the FIEL and the other applicable laws and regulations of Japan.

***Singapore***

This prospectus has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of shares of our Common Stock may not be circulated or distributed, nor may the shares of our Common Stock be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore, or the SFA, (ii) to a relevant person, or any person pursuant to Section 275(1A), and in accordance with the conditions, specified in Section 275 of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.

Where shares of our Common Stock are subscribed or purchased under Section 275 by a relevant person which is: (i) a corporation (which is not an accredited investor) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or (ii) a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary is an accredited investor, shares, debentures and units of shares and debentures of that corporation or the beneficiaries' rights and interest in that trust shall not be transferable for 6 months after that corporation or that trust has acquired shares of our Common Stock under Section 275 except: (a) to an institutional investor under Section 274 of the SFA or to a relevant person, or any person pursuant to Section 275(1A), and in accordance with the conditions, specified in Section 275 of the SFA; (b) where no consideration is given for the transfer; or (c) by operation of law.

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**INTERESTS OF NAMED EXPERTS AND COUNSEL**

None.

**EXPERTS**

The Company's financial statements for the year ended December 31, 2024, and December 31, 2023, included in this Prospectus have been audited by Turner, Stone and Company, an independent registered public accounting firm, and upon the authority of said firm as experts in accounting and auditing.

**LEGAL MATTERS**

The Doney Law Firm will provide opinions regarding the validity of the shares of our common stock offered pursuant to this Prospectus. The address of the Doney Law Firm is 4955 S. Durango Rd. Ste. 165, Las Vegas, NV 89113. Winston & Strawn LLP is acting as counsel for the underwriter with respect to the offering.

**DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION OF SECURITIES ACT LIABILITIES**

Our directors and officers are indemnified as provided by the Nevada corporate law and our bylaws. We have agreed to indemnify each of our directors and certain officers against certain liabilities, including liabilities under the Securities Act. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant to the provisions described above, or otherwise, we have been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than our payment of expenses incurred or paid by our director, officer or controlling person in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

**WHERE YOU CAN FIND ADDITIONAL INFORMATION**

We are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, and file reports, proxy statements and other information with the SEC. The SEC's website contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC. The address of that site is http://www.sec.gov.

We have filed a registration statement on Form S-1 with the SEC under the Securities Act of 1933, as amended, with respect to the securities offered in this prospectus. This prospectus, which is filed as part of a registration statement, does not contain all of the information set forth in the registration statement, some portions of which have been omitted in accordance with the SEC's rules and regulations. Statements made in this prospectus as to the contents of any contract, agreement or other document referred to in this prospectus are not necessarily complete and are qualified in their entirety by reference to each such contract, agreement or other document that is filed as an exhibit to the registration statement of which this prospectus is a part.

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**INDEX TO FINANCIAL STATEMENTS**

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| | |
|:---|:---|
|  | **Page** |
| Report of Independent Registered Public Accounting Firm | F-1 |
|  Consolidated Balance Sheets as of December 31, 2024, and 2023 | F-2 |
|  Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2024, and 2023 | F-3 |
| Consolidated Statements of Changes in Stockholders' Deficit for the years ended December 31, 2024, and 2023 | F-4 |
|  Consolidated Statements of Cash Flows for the years ended December 31, 2024, and 2023 | F-5 |
| Notes to Consolidated Financial Statements | F-6 |

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| | |
|:---|:---|
| Condensed Consolidated Balance Sheets as of June 30, 2025 (Unaudited) and December 31, 2024 | F-21 |
| Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and six months ended June 30, 2025, and 2024 (Unaudited) | F-22 |
| Condensed Consolidated Statements of Changes in Stockholders' Deficit for the three and six months ended June 30, 2025, and 2024 (Unaudited) | F-23 |
| Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2025, and 2024 (Unaudited) | F-24 |
| Notes to Condensed Consolidated Financial Statements (Unaudited) | F-25 |

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![](image_024.jpg)

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Favo Capital, Inc.

**Opinion on the Financial Statements**

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

 **Going Concern** 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has recurring losses from operations and negative cash flows from operating activities, which raises substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 **Basis for Opinion** 

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

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

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

Turner, Stone & Company, L.L.P.

We have served as the Company's auditor since 2023. Dallas, Texas

April 15, 2025

**FAVO CAPITAL, INC.** 

**CONSOLIDATED BALANCE SHEETS**

---

| | | |
|:---|:---|:---|
|  | **December 31, <br>2024** | **December 31, <br>2023** |
| **ASSETS** |  |  |
| **CURRENT ASSETS:** |  |  |
| Cash | $2751386 | $1147295 |
| Advance receivables (net of allowance for credit losses of $19,034,976 and $16,102,278 as of December 31, 2024 and 2023, respectively) | 14542518 | 15281941 |
| Due from related party | 41307 | 759 |
| Other current assets | 109753 | 126599 |
| **Total current assets** | 17444964 | 16556594 |
| **NON-CURRENT ASSETS:** |  |  |
| Goodwill | 1219134 |  |
| Fixed assets, net of accumulated depreciation | 143806 | 120683 |
| Intangible assets, net of accumulated amortization | 705000 |  |
| Operating lease right of use asset, net | 352262 | 314970 |
| Other assets | 371 | 2288 |
| **Total non-current assets** | 2420573 | 437941 |
| **TOTAL ASSETS** | $19865537 | $16994535 |
| **LIABILITIES AND STOCKHOLDERS' DEFICIT** |  |  |
| **CURRENT LIABILITIES:** |  |  |
| Accounts payable and accrued liabilities | 1528228 | 652462 |
| Notes payable, related party |  | 1500000 |
| Syndicate payable | 5284505 | 5072691 |
| Due to related party - current | 1600000 | 122437 |
| Deferred consideration - current | 207721 |  |
| Operating lease obligation - current | 146280 | 88009 |
| **Total current liabilities** | 8766734 | 7435599 |
| **NON-CURRENT LIABILITIES:** |  |  |
| Operating lease obligation - noncurrent | 203369 | 229848 |
| Other non-current liabilities |  | 45400 |
| Due to related party - noncurrent | 1600000 | 4700000 |
| Deferred consideration - noncurrent | 351172 |  |
| Notes payable, net | 32229267 | 25163642 |
| **Total non-current liabilities** | 34383808 | 30138890 |
| **TOTAL LIABILITIES** | 43150542 | 37574489 |
| **Commitments and Contingencies (Note 10)** |  |  |
| **STOCKHOLDERS' DEFICIT** |  |  |
| Series A Preferred stock, par value $0.0001 per share; 81,250,000 shares authorized; 37,020,000 and 28,420,000 shares issued and outstanding as of December 31, 2024 and 2023, respectively. | 3702 | 2842 |
| Series C Preferred stock, par value $0.0001 per share; 18,750,000 shares authorized; 18,750,000 shares issued and outstanding as of December 31, 2024 and 2023. | 1875 | 1875 |
| Common stock, par value $0.0001 per share; 500,000,000 shares authorized; 97,479,734 and 87,554,734 shares issued and outstanding as of December 31, 2024 and 2023, respectively | 9748 | 8755 |
| Stock subscription receivable | (1770827) | (3020831) |
| Additional paid-in capital | 14315979 | 9154182 |
| Accumulated other comprehensive gain | 2671 |  |
| Accumulated deficit | (35848153) | (26726777) |
| **Total stockholders' deficit** | (23285005) | (20579954) |
| **TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT** | $19865537 | $16994535 |

---

The accompanying notes are an integral part of these consolidated financial statements

**FAVO CAPITAL, INC.**

**CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS**

---

| | | |
|:---|:---|:---|
|  | **For the Years Ended** | **For the Years Ended** |
|  | **December 31,** | **December 31,** |
|  | **2024** | **2023** |
| &nbsp;&nbsp; Revenue | $12787262 | $11800228 |
| &nbsp;&nbsp; Cost of revenue | 2358114 | 3497364 |
| &nbsp;&nbsp; Gross profit | 10429148 | 8302864 |
| &nbsp;&nbsp; Operating expenses |  |  |
| &nbsp;&nbsp; General and administrative expenses | 7814809 | 5318338 |
| &nbsp;&nbsp; Allowance for credit losses | 4019840 | 5561517 |
| &nbsp;&nbsp; Professional fees | 2517381 | 1728146 |
| &nbsp;&nbsp; Total operating expense | 14352030 | 12608001 |
| &nbsp;&nbsp; Loss from operations | (3922882) | (4305137) |
| &nbsp;&nbsp; Interest expense | (4643396) | (3350913) |
| &nbsp;&nbsp; Loss on write down of investment | (1917) | (17157) |
| &nbsp;&nbsp; Gain on sale of fixed asset | 4230 |  |
| &nbsp;&nbsp; Foreign exchange loss | (38760) |  |
| &nbsp;&nbsp; Total other income (expenses) | (4679843) | (3368070) |
| &nbsp;&nbsp; Net loss before income taxes | (8602725) | (7673207) |
| &nbsp;&nbsp; Income tax expenses | (56055) |  |
| &nbsp;&nbsp; Net loss | (8658780) | (7673207) |
| &nbsp;&nbsp; Preferred shares interest expense | (462596) | (147955) |
| &nbsp;&nbsp; Net loss to common shareholders | $(9121376) | $(7821162) |
| &nbsp;&nbsp; Net loss per common share – basic and diluted | $(0.10) | $(0.11) |
| &nbsp;&nbsp; Weighted average common shares outstanding – basic and diluted | 92638720 | 68039666 |
| &nbsp;&nbsp; Comprehensive loss: |  |  |
| &nbsp;&nbsp; Net loss | $(9121376) | $(7821162) |
| &nbsp;&nbsp; Unrealized gain on foreign currency translation | 2671 |  |
| &nbsp;&nbsp; Total comprehensive loss | $(9118705) | $(7821162) |

---

The accompanying notes are an integral part of these consolidated financial statements

**FAVO CAPITAL, INC.**

**CONSOLIDATED STATEMENT OF STOCKHOLDERS' (DEFICIT)**

**FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023**

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Series C Preferred Stock** | **Series C Preferred Stock** | **Series A Preferred Stock** | **Series A Preferred Stock** | **Common Stock** | **Common Stock** | | | | |
|  | **Number of Shares** | **Par Value** | **Number of Shares** | **Par Value** | **Number of Shares** | **Par Value** |<br> **Additional Paid-in Capital** |<br> **Subscription receivable** |<br> **Accumulated Deficit** |<br> **Total Stockholders' Deficit** |
| &nbsp;&nbsp; **Balance - December 31, 2022** | 25000000 | $2500 |  | $— | 22954734 | $2295 | $6357859 | $— | $(17720634) | $(11357980) |
| &nbsp;&nbsp;&nbsp; Preferred stock conversion | (6250000) | (625) |  |  | 25000000 | 2500 | (1875) |  |  |  |
| &nbsp;&nbsp;&nbsp; Shares issued in common control acquisition. |  |  |  |  | 20000000 | 2000 | 4998000 |  |  | 5000000 |
| &nbsp;&nbsp;&nbsp; Adjustment to equity for common control transaction. |  |  |  |  |  |  | (14200000) |  |  | (14200000) |
| &nbsp;&nbsp;&nbsp; Retained earnings Distribution |  |  |  |  |  |  |  |  | (1184982) | (1184982) |
| &nbsp;&nbsp;&nbsp; Common stock issued for services |  |  |  |  | 17200000 | 1720 | 4298280 |  |  | 4300000 |
| &nbsp;&nbsp;&nbsp; Issuance of common stock for the promissory note extension |  |  |  |  | 2400000 | 240 | 599760 |  |  | 600000 |
| &nbsp;&nbsp;&nbsp; Preferred Stock issuances |  |  | 28420000 | 2842 |  |  | 7102158 |  |  | 7105000 |
| &nbsp;&nbsp;&nbsp; Preferred shares interest expense |  |  |  |  |  |  |  |  | (147955) | (147955) |
| &nbsp;&nbsp;&nbsp; Subscription Receivable |  |  |  |  |  |  |  | (3020831) |  | (3020831) |
| &nbsp;&nbsp;&nbsp; Net loss |  |  |  |  |  |  |  |  | (7673207) | (7673207) |
| &nbsp;&nbsp; **Balance - December 31, 2023** | 18750000 | $1875 | 28420000 | $2842 | 87554734 | $8755 | $9154182 | $(3020831) | $(26726777) | $(20579954) |

---

---

| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Series C Preferred Stock** | **Series C Preferred Stock** | **Series A Preferred Stock** | **Series A Preferred Stock** | **Common Stock** | **Common Stock** | | | | | |
|  | **Number of Shares** | **Par Value** | **Number of Shares** | **Par Value** | **Number of Shares** | **Par Value** |<br> **Additional Paid-in Capital** |<br> **Subscription receivable** |<br> **Accumulated Deficit** |<br> **Accumulated Other Comprehensive Gain** |<br> **Total Stockholders' Deficit** |
| &nbsp;&nbsp; **Balance - December 31, 2023** | 18750000 | $1875 | 28420000 | $2842 | 87554734 | $8755 | $9154182 | $(3020831) | $(26726777) | $— | $(20579954) |
| &nbsp;&nbsp; Common stock issued for promissory note extension. |  |  |  |  | 600000 | 60 | 149940 |  |  |  | 150000 |
| &nbsp;&nbsp; Issuance of common stock in connection with private offering, net of issuance costs. |  |  |  |  | 8000000 | 800 | 1791600 |  |  |  | 1792400 |
| &nbsp;&nbsp; Common Stock issued for Simplified Companies <br>acquisition. |  |  |  |  | 1000000 | 100 | 249900 |  |  |  | 250000 |
| &nbsp;&nbsp; Fair value of deferred shares on Simplified Companies acquisition. |  |  |  |  |  |  | 740000 |  |  |  | 740000 |
| &nbsp;&nbsp; Common stock issued for services |  |  |  |  | 325000 | 33 | 81217 |  |  |  | 81250 |
| &nbsp;&nbsp; Preferred Stock issuances for cash. |  |  | 8600000 | 860 |  |  | 2149140 |  |  |  | 2150000 |
| &nbsp;&nbsp; Amortization of advisory board shares issued in advance. |  |  |  |  |  |  |  | 1250004 |  |  | 1250004 |
| &nbsp;&nbsp; Net loss |  |  |  |  |  |  |  |  | (9121376) | 2671 | (9118705) |
| &nbsp;&nbsp; **Balance - December 31, 2024** | 18750000 | $1875 | 37020000 | $3702 | 97479734 | $9748 | $14315979 | $(1770827) | $(35848153) | $2671 | $(23285005) |

---

The accompanying notes are an integral part of these consolidated financial statements.

**FAVO CAPITAL, INC.** 

**CONSOLIDATED STATEMENTS OF CASH FLOWS**

---

| | | |
|:---|:---|:---|
|  | **For the Years Ended December 31,** | **For the Years Ended December 31,** |
|  | **2024** | **2023** |
| **CASH FLOWS FROM OPERATING ACTIVITIES**: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net loss | $(9121376) | $(7821162) |
| &nbsp;&nbsp; Adjustments to reconcile net loss to net cash used in operating activities: |  |  |
| &nbsp;&nbsp; Loss on sale of investments | 1917 | 17157 |
| &nbsp;&nbsp;&nbsp;&nbsp; Allowance for credit losses | 4019840 | 5561517 |
| &nbsp;&nbsp;&nbsp;&nbsp; Common stock issued for services | 81250 | 1279170 |
| &nbsp;&nbsp;&nbsp;&nbsp; Finance charges for extension of promissory note | 40625 | 600000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Operating lease ROU asset amortization | (37262) | 68507 |
| &nbsp;&nbsp;&nbsp;&nbsp; Amortization of advisory board shares issued in advance. | 1250004 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Depreciation and amortization expense | 266364 | 44643 |
| &nbsp;&nbsp;&nbsp;&nbsp; Gain on sale of assets | (4230) |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Interest expense on deferred consideration | 96424 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Foreign exchange loss | 38760 |  |
| **Changes in assets and liabilities** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Advances receivable, net | (3280417) | (4716726) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Due from related party | (40548) | 939241 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other current assets | 16846 | 43753 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued liabilities | 792881 | 63068 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Syndicate payable | 211814 | 3627960 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating lease obligation | 31792 | (64514) |
| &nbsp;&nbsp;&nbsp;&nbsp; Due to related party | 1477563 | 119297 |
| &nbsp;&nbsp;&nbsp;&nbsp; Other non-current liabilities | (45400) | (14299) |
| **NET CASH USED IN OPERATING ACTIVITIES** | (4203154) | (252388) |
| **INVESTING ACTIVITIES:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchase of property and equipment | (52992) | (40189) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sale of property and equipment | 11596 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash paid for Simplified Companies acquisition | (630000) |  |
| **NET CASH USED IN INVESTING ACTIVITIES** | $(671395) | $(40189) |
| **FINANCING ACTIVITIES:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from preferred stock issuance | 2150000 | 7105000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash paid in common control transaction |  | (4500000) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payments made against promissory note - related party | (1500000) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payments made against notes payable related party | (3100000) | (2562000) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from notes payable-related party | 7175000 | 1366000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from notes payable |  | 875402 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payments made against notes payable |  | (115230) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Retained earnings distribution |  | (1184982) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Issuance of common stock | 1792400 |  |
| **NET CASH PROVIDED BY FINANCING ACTIVITIES** | $6517400 | $984190 |
| **NET CHANGE IN CASH** | 1642772 | 691613 |
| Effect of exchange rate changes on cash | (38760) |  |
| **CASH – BEGINNING OF PERIOD** | 1147295 | 455682 |
| **CASH – END OF PERIOD** | $2751386 | $1147295 |
| **SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:** |  |  |
| Cash paid for interest | $4407854 | $3349561 |
| Cash paid for income taxes |  |  |
| **NON-CASH INVESTING AND FINANCING ACTIVITIES**: <br>|  |  |
| Conversion of series C preferred stock | $— | $2500 |
| Common stock issued in common control acquisition |  | 5000000 |
| Issuance of note payable in common control acquisition |  | 4700000 |
| Issuance of common stock for promissory note extension | 150000 | 600000 |
| Issuance of common stock Simplified Companies acquisition | 250000 |  |
| Deferred equity for Simplified Companies acquisition | 740000 |  |
| Deferred commission for Simplified Companies acquisition | 462469 |  |
| Stock issued for serving on advisory board | 1250004 |  |

---

The accompanying notes are an integral part of these consolidated financial statements.

**FAVO CAPITAL, INC.** 

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

 **Note 1 – Organization and basis of accounting**

Favo Capital, Inc. was incorporated as Beeston Enterprises Ltd. ("the Company") on July 12, 1999 under the laws of the State of Nevada. The Company changed its name to Favo Capital, Inc. on September 2, 2020, which was the market effective date established by the Financial Industry Regulatory Authority ("FINRA"). Previously, the Company was an exploration stage company engaged in the search of mineral deposits that could be developed to a state of a commercially viable producing mine. The Company is now a private credit company focused on providing alternative financing solutions to small and medium-sized businesses (SMBs) across the United States. The Company's business model is centered around direct and syndicated Revenue Based Funding solutions that address the capital needs of SMBs underserved by traditional lending institutions.

On May 31, 2023, the Company entered into an acquisition agreement with the principals of FAVO Group LLC. As part of the acquisition, the principals of FAVO Group transferred 100% of their membership interest in Favo Group LLC, FAVO Group Human Resources, LLC, FAVO Funding LLC, Honeycomb Sub Fund LLC, FORE Funding LLC, FORE Funding CA LLC and FAVO Funding CA LLC into the Company. As consideration for the transfer, the Company agreed to pay a purchase price of $14,200,000 in cash, Senior Secured Notes and Common Stock. The Company raised the financing for this transaction by selling 18 million shares of its Series A Preferred Stock at $0.25 for total of $4,500,000. $4,500,000 in cash has been paid to the principles of FAVO Group for the transfer of their membership. $2,500,000 of this was paid on the closing date of this transaction. The remaining $2,000,000 was paid as follows: $1,250,000 on August 31, 2023, and the remaining $750,000 on October 26, 2023.

On June 7, 2023, we filed with the Secretary of State of the State of Nevada a Certificate of Amendment to the Articles of Incorporation to increase our authorized shares of preferred stock from 25,000,000 shares to 50,000,000 shares, par value $0.0001 per share. The Amendment did not increase our authorized shares of common stock, which remained at 500,000,000 shares, par value $0.0001 per share.

On November 27, 2023, we filed with the Secretary of State of the State of Nevada a Certificate of Amendment to the Articles of Incorporation to increase our authorized shares of preferred stock from 50,000,000 shares to 100,000,000 shares, par value $0.0001 per share. The Amendment did not increase our authorized shares of common stock, which remained at 500,000,000 shares, par value $0.0001 per share.

On November 22, 2023, we elected to decrease our authorized shares of Series C preferred shares from 25,000,000 shares down to 18,750,000 shares.

On November 27, 2023, we elected to increase our authorized shares of Series A preferred shares from 20,000,000 shares up to 81,250,000 shares.

The accompanying financial statements are prepared on the basis of accounting principles generally accepted in the United States of America ("GAAP").

 

 

 **Note 2- Going Concern**

The accompanying consolidated financial statements have been prepared assuming the continuation of the Company as a going concern. The Company has positive working capital of $8,678,230 for the year ended December 31, 2024, revenue for the year ended December 31, 2024 of $12,787,262, a net loss of $8,658,780 and negative cash generated from operating activities of $4,203,154for the year ended December 31, 2024. These conditions raise substantial doubt regarding the Company's ability to continue as a going concern. The Company has however established ongoing source of revenues but currently not sufficient to cover its operating costs and is dependent on debt and equity financing to fund its operations. Management of the Company is making efforts to increase its revenue and raise additional funding until a registration statement relating to an equity funding facility is in effect. While management of the Company believes that it will be successful in its capital formation and planned operating activities, there can be no assurance that the Company will be able to raise additional equity capital or be successful in the development and commercialization of the products it develops or initiates collaboration agreements thereon. The accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.

 

 **Note 3 – Summary of significant accounting policies**

 

 *Principles of Consolidation*

The Company prepares its consolidated financial statements on the accrual basis of accounting. All intercompany accounts, balances and transactions have been eliminated in the consolidation as at December 31, 2024 and December 31, 2023.

 *Revenue Recognition*

The Company's main source of revenue is through agreements for the purchase and sale of future receivables/receipts, commonly referred to as a Merchant Cash Advance. Under the contract, the Company will agree to purchase a specified amount of the customer's future receipts/receivables (the "Purchased Amount") at a discount, in return for providing the customer with upfront proceeds (the "Purchase Price"). The customer is then contractually required to pay the cash related to the future receivables/receipts based on an estimated period and agreed-upon % of the customer's future receivables/receipts that the customer collects. The difference between the Purchased Amount that the customer will repay, and the discounted Purchase Price amount that the Company pays for the future receivables/receipts, is considered the "discount", which reflects the significant collection risk incurred by the Company for its purchase of future receivables/receipts. These purchase of future receivables arrangements do not constitute a revenue contract under ASC 606 "*Revenue from Contracts with Customers".* Accordingly, the Company accounts for them in accordance with ASC 310 "*Receivables"*

The Company recognizes revenue on remittances collected by applying the contractual discount to allocate the remittance against the initial principal held as a receivable and revenue. All upfront income from fees, such as origination and processing fees are booked as income on a straight-line method over the initial period of the contract. The same applies to all direct costs incurred upon the execution of the contract, which primarily consists of commissions paid to the Company's internal sales team or external partners for sourcing the contract.

As of December 31, 2024, and 2023, deferred commissions cost included within account receivables was $842,924 and $919,280, respectively. Similarly, deferred origination fees included within account receivables was $192,033 and $335,679 as of December 31, 2024, and 2023, respectively.

Following table provides the revenue recognized from each offering

---

| | | |
|:---|:---|:---|
| **Revenue** | **December 31, 2024** | **December 31, 2023** |
| &nbsp;&nbsp; MCAs Income and Fees | $10225976 | $11286626 |
| &nbsp;&nbsp; Brokerage Commissions | 2483084 | 294472 |
| &nbsp;&nbsp; Management fee | 44874 |  |
| &nbsp;&nbsp; Others | 33328 | 219130 |
| &nbsp;&nbsp; Total Revenue | $**12787262** | $**11800228** |

---

 

 *Variable Interest Entities*

 

We determine at the inception of each arrangement whether an entity in which we have made an investment or in which we have other variable interests is considered a variable interest entity ("VIE"). We consolidate VIEs when we are the primary beneficiary. We are the primary beneficiary of a VIE when we have the power to direct activities that most significantly affect the economic performance of the VIE and have the obligation to absorb the majority of their losses or benefits. If we are not the primary beneficiary in a VIE, we account for the investment or other variable interests in a VIE in accordance with applicable GAAP.

Periodically, we assess whether any changes in our interest or relationship with the entity affect our determination of whether the entity is a VIE and, if so, whether we are the primary beneficiary.

 

 *Property, equipment and leasehold improvements.*

Property, equipment and leasehold improvements are stated at historical cost less accumulated depreciation and impairment. The historical cost of acquiring an item of property and equipment or undertaking leasehold improvements includes the costs necessarily incurred to bring it to the condition and location necessary for its intended use.

Maintenance and repairs are charged to expense as incurred. When items of property or equipment are sold or retired, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is included in the results of operations. Depreciation is calculated on a straight-line basis over the estimated useful lives of the respective assets.

The estimated useful lives of depreciable assets are as follows:

---

| | |
|:---|:---|
| &nbsp;&nbsp; Computers and equipment | &nbsp;&nbsp; 5 years |
| &nbsp;&nbsp; Office furniture and fixtures | &nbsp;&nbsp; 7 years |
| &nbsp;&nbsp; Vehicles | &nbsp;&nbsp; 5 years |
| &nbsp;&nbsp; Leasehold improvements | &nbsp;&nbsp; Shorter of the lease term or the estimated useful life |

---

 *Advance receivables*

Advance receivables are recorded at net realizable value, net of an allowance for expected credit losses.

 *Credit Losses on Financial Instruments*

 

For its financial instruments subject to credit risk, consisting of its receivables related to its MCA's, the Company recognizes as an allowance its estimate of lifetime expected credit losses under the current expected credit loss (CECL) model of ASC 326. The approach is based on the Company's internal knowledge and historical default rates over the expected life of the receivables and is adjusted to reflect current economic conditions as well as industry and geographical specific risks. This evaluation takes into account the customer's ability and intention to pay the consideration when it is due along with incorporating changes in the forward-looking estimates. If the expected financial condition of the Company's customers were to improve, the allowances may be reduced accordingly.

Movement of Credit Losses for the Year:

---

| | | |
|:---|:---|:---|
|  | **Years Ended** <br> **December 31,**  | **Years Ended** <br> **December 31,**  |
|  | **2024** | **2023** |
| Beginning balance | $16102278 | $10842493 |
| Provision for (reversal of) credit losses | 4019840 | 5561517 |
| Charge-offs | (1087141) | (301732) |
| Recoveries |  |  |
| Ending balance | $**19034976** | $**16102278** |

---

 

The Company had increased write-offs for the period ended December 31, 2024 mainly due to the closing of some of the syndication funds in which the Company participated.

The Company will write off any deals that are deemed to be uncollectible as advised by the Company's third party collections and legal team or in the event the merchant has filed for bankruptcy. With regards to deals where the Company has syndicated on the deal, the write off is done at the time the syndication partner identifies these deals are no longer collectable.

 *Fair Value of Financial Instruments*

ASC 825, "Disclosures about Fair Value of Financial Instruments", requires disclosure of fair value information about financial instruments. ASC 820, "Fair Value Measurements" defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of December 31, 2024 and 2023.

Authoritative literature provides a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument's categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement as follows:

Level 1 - Quoted market prices available in active markets for identical assets or liabilities that the Company has access to at the measurement date.

Level 2 - Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).

Level 3 - Unobservable inputs that reflect our assumptions about the assumptions that market participants would use in pricing the asset or liability.

The respective carrying values of certain on-balance-sheet financial instruments approximate their fair values. These financial instruments include cash, accrued liabilities, convertible note, notes payable, due to and from related parties and advanced receivables. Fair values were assumed to approximate carrying values for these financial instruments due to their short-term maturities.

 *Provision for Income Taxes*

The Company accounts for income taxes in accordance with ASC 740 and other authoritative guidance utilizing the asset and liability method. This method requires the recognition of deferred assets or liabilities for the expected future tax consequences of events that have been included in the financial statements. Deferred tax assets or liabilities are calculated as the difference between the financial statements and the tax bases of assets and liabilities applying enacted tax rates in effect for the period in which the differences are expected to settle. The Company records deferred tax assets or liabilities when management determines it is more likely than not that the tax position will be sustained. A valuation allowance is required for deferred tax assets if, based on available evidence, it is more likely than not that all or some portion of the asset will not be realized due to the inability to generate sufficient taxable income in the period or of the character necessary to use the benefit of the deferred tax asset. On the basis of the evaluation, as of December 31, 2024, the Company has recorded a full valuation allowance against the Company's net deferred tax asset.

We record uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which (1) we determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The company has not identified any uncertain tax positions.

We recognize interest and penalties related to unrecognized tax benefits on the income tax expense line in the accompanying consolidated statement of operations. Accrued interest and penalties are included on the related tax liability line in the consolidated balance sheet.

 *Estimates*

The financial statements are prepared on the basis of accounting principles generally accepted in the United States of America. 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 as of December 31, 2024 and 2023, and expenses for the years ended December 31, 2024 and 2023, and cumulative from inception. Actual results could differ from those estimates made by management.

 *Stock Subscription Receivable*

Stock subscription receivables are recorded when the shares have been issued against future services from the subscriber. Since the shares had already been issued and the expense will be recorded when the services are received from the subscriber, the Company recorded the amount as stock subscriptions receivable in the equity section of the consolidated balance sheets.

 *Warrants*

The Company accounts for stock warrants granted either as a liability or equity in accordance with ASC 815-40, Derivatives and Hedging — Contracts in Entity's Own Equity ("ASC 815-40"). Under ASC 815-40, contracts that may require settlement for cash are liabilities, regardless of the probability of the occurrence of the triggering event. Liability-classified warrants are measured at fair value on the issuance date and at the end of each reporting period. Any change in the fair value of the warrants after the issuance date is recorded in the consolidated statements of operations and comprehensive loss as a gain or loss. If warrants do not require liability classification under ASC 815-40, in order to conclude warrants should be classified as equity, the Company assesses whether the warrants are indexed to its common stock and whether the warrants are classified as equity under ASC 815-40 or another applicable GAAP standard. Equity-classified warrants are accounted for at fair value on the grant date with no changes in fair value recognized after the issuance date.

The Company has issued warrants to purchase shares of its common stock in connection with its financing activities. The Company classifies these warrants as equity and recorded the warrants at fair value as of the date of issuance on the Company's consolidated balance sheet with no subsequent remeasurement. The issuance date fair value of the outstanding warrants was estimated using the Black-Scholes Model. The Black-Scholes Model required inputs such as the expected term of the warrants, expected volatility and risk-free interest rate. These inputs were subjective and required significant analysis and judgment. For the estimate of the expected term, the Company used the full remaining contractual term of the warrant. The estimate of expected volatility assumption is based on the volatility observed on the Company's peer group. The risk-free rate is based on the yield available on U.S. Treasury zero-coupon issues corresponding to the expected term of the warrants.

 *Syndicate Payable*

A portion of the Company's direct funding portfolio are funded by syndication partners who participate alongside the Company in the deal and therefore economically benefit directly from the performance of the deal but also bare the risk with regards to nonperformance. The syndicated portion of an individual deal will vary based on the size of the deal or the syndicated partners participation threshold. All syndication partners sign participation contracts with the Company which details the relationship between the syndicate partner and the Company as well as any relevant collection fees the Company will receive under the relationship.

All deals and the syndicates participation are tracked separately in the Company's customer relationship management ("CRM") which operates on a wallet basis. The syndicate partner has access to the CRM and therefore has the ability to track the performance of every deal as well as monitor any payments received.

 *Foreign Currency Translation and Transactions*

 

The functional currency of our wholly owned subsidiaries is the applicable local currency. The translation of foreign currencies into U.S. dollars is performed for assets and liabilities using current foreign currency exchange rates in effect at the balance sheet date, and for revenues and expense accounts using average foreign currency exchange rates during the period. Capital accounts are translated at historical foreign currency exchange rates. Translation gains and losses are included in stockholders' equity as a component of accumulated other comprehensive income (loss). Adjustments that arise from foreign currency exchange rate changes on transactions denominated in a currency other than the functional currency are included in other loss on the consolidated statements of operations.

 

 *Segment Reporting*

The Company's current source of revenue is from one main product, namely Merchant Cash Advances. Our revenue generation is limited to within the United States and although the Company is exploring alternative products to add to its alternative finance offering, none of these have been finalized yet. Our chief operating decision-maker ("CODM") is our Chief Executive Officer ("CEO"). The CEO reviews financial information presented on a consolidated basis for purposes of making operating decisions, assessing financial performance, and allocating resources. We manage our operations and allocate resources as a single operating segment.

 *Leases*

 

The Company applies the accounting guidance ASC 842, *Leases*. The Company determines if an arrangement contains a lease at inception based on whether there is an identified property, plant or equipment and whether the Company controls the use of the identified asset throughout the period of use. Operating leases are included in the accompanying consolidated balance sheets. Operating lease right of use ("ROU") assets represent the Company's right to use an underlying asset for the lease term. Lease liabilities represent the Company's obligation to make lease payments arising from the lease and are included in current and non-current liabilities. Operating lease ROU assets and lease liabilities are recognized at the lease inception date based on the present value of lease payments over the lease term discounted based on the more readily determinable of (i) the rate implicit in the lease or (ii) the Company's incremental borrowing rate (which is the estimated rate the Company would be required to pay for a collateralized borrowing equal to the total lease payments over the term of the lease). Because the Company's operating leases generally do not provide an implicit rate, the Company estimates its incremental borrowing rate based on the information available at lease commencement date for borrowings with a similar term.

The Company's operating lease ROU assets are measured based on the corresponding operating lease liability adjusted for (i) payments made to the lessor at or before the commencement date, (ii) initial direct costs incurred and (iii) tenant incentives under the lease. The Company does not assume renewals or early terminations unless it is reasonably certain to exercise these options at commencement. The Company elected the practical expedient which allows the Company to not allocate consideration between lease and non-lease components. Variable lease payments are recognized in the period in which the obligation for those payments is incurred. In addition, the Company elected the practical expedient such that it does not recognize ROU assets or lease liabilities for leases with a term of 12 months or less of all asset classes. Operating lease expense is recognized on a straight-line basis over the lease term.

 *Business Combinations*

ASC 805, Business Combinations, provides a model for determining whether an acquisition represents a business combination. In order to be a business, the integrated set of activities of the acquired entity needs to have an input and a substantive process that together significantly contribute to the ability to create outputs. The acquired entity must also pass the "Screen Test" which involves determining whether the acquisition represents an in-substance asset acquisition based on whether the fair value of the gross assets acquired is "substantially all" concentrated in a single asset or group of similar assets.

We use the acquisition method of accounting for business combination transactions, and, accordingly, recognize the fair values of assets acquired and liabilities assumed in our consolidated financial statements. Transaction costs related to the acquisition of the acquired company are expensed as incurred. The allocation of fair values may be subject to adjustment after the initial allocation for up to a one-year period as more information becomes available relative to the fair values as of the acquisition date. The consolidated financial statements include the results of operations of any acquired company since the acquisition date.

 *Goodwill and Intangible Assets*

We recognize the excess of the purchase price over the fair value of identifiable net assets acquired at the acquisition date as goodwill. In accordance with ASC 350, *Intangibles-Goodwill and Other* ("ASC 350"), Goodwill is not amortized but is reviewed for impairment annually and more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. We first perform a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying value. If the reporting unit does not pass the qualitative assessment, then the reporting unit's carrying value is compared to its fair value. If the fair value of the reporting unit is greater than the reporting unit's carrying value, then the carrying value of the reporting unit is deemed to be recoverable. If the carrying value of the reporting unit is greater than the reporting unit's fair value, goodwill is impaired and written down to the reporting unit's fair value.

Identifiable intangible assets include developed technology, customer relationships, and trade names resulting from acquisitions. Acquired intangible assets are recorded at fair value on the date of acquisition and amortized over their estimated economic lives on a straight-line basis. Acquired intangible assets are presented net of accumulated amortization on the consolidated balance sheets. We review the carrying amounts of intangible assets for impairment at the asset group level whenever events or changes in circumstances indicate that the carrying amount of the asset group may not be recoverable. We measure the recoverability of the asset group by comparing its carrying amount to the future undiscounted cash flows we expect the asset group to generate. If we consider the asset group to be impaired, the impairment to be recognized equals the amount by which the carrying value of the asset group exceeds its fair value. In addition, we periodically evaluate the estimated remaining useful lives of long-lived intangible assets to determine whether events or changes in circumstances warrant a revision to the remaining period of depreciation or amortization.

The Company amortizes intangible assets subject to amortization on the basis of their expected periods of benefit, generally 4 to 10 years. The Company does not have indefinite-lived intangible assets other than goodwill.

Useful life of the intangible assets are as follows:

---

| | |
|:---|:---|
|  | &nbsp;&nbsp; Useful life (In years) |
| &nbsp;&nbsp; Trade Name | &nbsp;&nbsp; 10 |
| &nbsp;&nbsp; Developed Technology | &nbsp;&nbsp; 4 |
| &nbsp;&nbsp; Customer relationships | &nbsp;&nbsp; 4 |

---

As of December 31, 2024, the Company had gross intangible assets of $900,000 and gross accumulated amortization of $195,000, netting to $705,000. The Company had no intangible assets as of December 31, 2023.

 *Deferred Consideration*

 

The Company elected to account for the deferred consideration under ASC 825, Financial Instruments ("ASC 825"). Accordingly, deferred consideration was recognized at their fair value at the closing of the transaction and are subsequently remeasured each reporting period with changes in fair value recorded in other income (expense) in the consolidated statements of operations and comprehensive loss until settlement. The fair value of the deferred consideration was determined by discounting future payments using the Company's cost of borrowing.

 

 *Subsequent Event*

The Company evaluated subsequent events through the date when financial statements are issued for disclosure consideration.

 

 *Adoption of Recent Accounting Pronouncements*

 

In November 2023, the FASB issued ASU 2023-07, *Segment Reporting (Topic 280 - Improvements to Reportable Segment Disclosures.* ASU 2023-07 will improve reportable segment disclosure requirements, primarily through enhanced annual and interim disclosures about significant segment expenses that are regularly provided to the CODM. The disclosure required under ASU 2023-07 is required for public entities with a single reportable segment. ASU 2023-07 will be effective for the Company for annual periods beginning on January 1, 2024 and interim periods beginning on January 1, 2025. The amendments of this guidance apply retrospectively to all prior periods presented in the consolidated financial statements. Early adoption is permitted. The amendments were applied retroactively to all prior periods presented in the consolidated financial statements and adoption of ASU 2023-07 do not have a material impact on our consolidated financial statements.

 

 *Recently issued accounting guidance - not yet adopted:*

In November 2024, the Financial Account Standards Board (FASB), issued Accounting Standards Update (ASU) 2024-04, *Debt-Debt with Conversions and Other Option.* ASU 2024-04 is intended to clarify requirements for determining whether certain settlements of convertible debt instruments, including convertible debt instruments with cash conversion features or convertible debt instruments that are not currently convertible, should be accounted for as an induced conversion. This ASU is effective for all entities for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, with early adoption permitted. The Company is currently evaluating the potential impact of this guidance on its disclosures.

On November 04, 2024, the FASB issued ASU 2024-03, *Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses* (ASU 2024-03), which requires new disclosures to disaggregate prescribed natural expenses underlying any income statement caption. ASU 2024-03 is effective for annual periods in fiscal years beginning after December 15, 2026, and interim periods thereafter. Early adoption is permitted. ASU 2024-03 applies on a prospective basis for periods beginning after the effective date. However, retrospective application to any or all prior periods presented is permitted. We are assessing the impact that ASU 2024-03 will have on our consolidated financial statements and disclosures, if any.

In March 2024, the United States Securities and Exchange Commission (SEC) issued Final Rulemaking Release No. 33-11275: *The Enhancement and Standardization of Climate-Related Disclosures for Investors.* This release is intended to improve consistency, completeness and transparency related to climate risks and events. The disclosure requirements related to this new rule will be phased in, and effective for the Company beginning in fiscal year 2027 on a prospective basis. The Company is currently evaluating the potential impact of this release on its financial statements and disclosures.

In March 2024, the Financial Account Standards Board (FASB), issued Accounting Standards Update (ASU) 2024-01, *Compensation—Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards.* This ASU intends to provide an illustrative example intended to demonstrate how entities that account for profits interest and similar awards would determine whether a profits interest award should be accounted for in accordance with Topic 718. This ASU is effective for all public entities for annual reporting periods beginning after December 15, 2024, and interim reporting periods within those annual reporting periods, with early adoption permitted. The Company is currently evaluating the potential impact of this guidance on its disclosures.

.

In December 2023, the FASB issued ASU 2023-09, *Income Taxes (Topic 740): Improvements to Income Tax Disclosures* (ASU 2023-09), which enhances the annual income tax disclosures for the effective tax rate reconciliation and income taxes paid. The amendments are effective for public business entities, for annual periods beginning after December 15, 2024 and for annual periods beginning after December 15, 2025 for all other entities. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. ASU 2023-09 applies on a prospective basis to annual financial statements for periods beginning after the effective date. However, retrospective application in all prior periods presented is permitted. We are assessing the impact that ASU 2023-09 will have on our consolidated financial statements, if any.

In October 2023, the FASB issued ASU 2023-06, *Disclosure Improvements: Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative.* This ASU covers a variety of codification topics, and the effective date for each amendment will be the date on which the SEC's removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited. The Company is currently evaluating the potential impact of this guidance on its disclosures.

The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

 **Note 4 – Acquisitions**

 **Simplified Companies acquisition in 2024:**

On January 2, 2024, the Company completed the acquisition by acquiring 100% membership interest in DBOSS Funding, LLC (dba Simplified Funding), LendTech CRM Solutions, LLC, and Believe PMF EIRL (collectively "Simplified Companies"). The Simplified Companies are engaged in the business of using proprietary software and call centers in the Dominican Republic and Florida to offer secured and unsecured financial products and services to clients with funders across the United States. The business generates revenue from the commissions generated from the funders. The primary reason for the business combination is to grow direct funding business and improve overall margins by leveraging the synergies between the Company and the Simplified Companies.

In accordance with ASC 805, the acquisition was accounted for as a business combination under the acquisition method. The purchase consideration was allocated to the working capital, tangible and intangible assets acquired based on their estimated fair values as of the acquisition date with the excess recorded as goodwill, as follows:

---

| | |
|:---|:---|
| &nbsp;&nbsp; Goodwill | $1219134 |
| &nbsp;&nbsp; Tangible assets | 48862 |
| &nbsp;&nbsp; Intangible assets | 900000 |
| &nbsp;&nbsp; **Net assets acquired** | $**2167996** |

---

The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives as of the date of acquisition (in thousands):

---

| | | |
|:---|:---|:---|
|  | **Fair Value** | **Useful life (in years)** |
| &nbsp;&nbsp; Trade Name | $200000 | 10 |
| &nbsp;&nbsp; Developed Technology | $650000 | 4 |
| &nbsp;&nbsp; Customer Relationships | $50000 | 4 |

---

The fair value of the intangible asset was determined by applying the income approach, direct cost method and multi period excess earnings method. The fair value measurements are based on significant unobservable inputs, including management estimates and assumptions, and thus represents Level 3 measurements.

There was no transaction costs associated with the acquisition for the year ended December 31, 2024.

The goodwill balance is primarily attributed to the assembled workforce and synergies after the acquisition. No material measurement period adjustments were recognized during the year ended December 31, 2024.

Favo Capital Inc. obtained control of the Simplified Companies upon transfer of cash consideration to the selling shareholders. The total consideration transferred in the acquisition was $2,167,996, consisting of the following:

---

| | |
|:---|:---|
| &nbsp;&nbsp; Cash | $400000 |
| &nbsp;&nbsp; **Working capital adjustment** | 85527 |
| &nbsp;&nbsp; Equity | 250000 |
| &nbsp;&nbsp; Deferred equity | 740000 |
| &nbsp;&nbsp; Deferred commission | 692469 |
| &nbsp;&nbsp; **Total purchase consideration** | $**2167996** |

---

The aggregate purchase consideration includes 4,000,00 shares of the Company's common stock for a fair value of $740,000 to be issued after the acquisition date in tranches. The fair value of these shares on the acquisition date is included in additional paid-in capital.

The amounts of revenue and earnings of Simplified Companies included in the Company's consolidated income statement from the acquisition date to the year ending December 31, 2024 are as follows:

---

| | |
|:---|:---|
|  | **December 31, 2024** |
| &nbsp;&nbsp; Revenue | $2180380 |
| &nbsp;&nbsp; Net profit/ (loss) | $(591127) |

---

We are unable to provide the pro forma information required under ASC 805-10-50-2(h) as the disclosure is impracticable since the required pre-acquisition historical information could not be obtained from the acquiree.

The Company entered into Business commission agreement with selling shareholder for new business referrals and business renewals. As these business commissions are paid primarily for the benefit of the acquirer and based on post combination efforts by the selling shareholder, these commissions have been accounted separately from the business combination. The Company recognized commission expenses of $489,557 for the year ended December 31, 2024, included under general and administrative expenses in the consolidated statement of operations and comprehensive loss.

 **FAVO Group Acquisition in 2023:**

On May 31, 2023, the Company entered into an acquisition with the principals of FAVO Group LLC. As part of the acquisition, the principals of FAVO Group transferred 100% of their membership interest in Favo Group LLC, FAVO Group Human Resources, LLC, FAVO Funding LLC, Honeycomb Sub Fund LLC, FORE Funding LLC, FORE Funding CA LLC and FAVO Funding CA LLC into FAVO Capital Inc. Stewards Investment Capital Limited will also serve on the advisory board for a 3 year term and for these services they will receive 15,000,000 shares of the Company's common stock.

Business activities of the entities acquired through common control is as follows:

Favo Group LLC- Acted as the management company and tasked with ensuring smooth operations across all entities.

Favo Funding LLC- Direct Merchant Cash Advance Funder. FAVO Capital Inc syndicated deals with FAVO Funding LLC.

Honeycomb Sub Fund LLC- Syndication company that syndicates on deals with other third party funders.

Fore Funding LLC- The sales office for FAVO Funding LLC and also acts as broker for other third party funders.

Favo Funding CA LLC- Direct Merchant Cash Advance Funder for businesses in California state, no activity for the periods presented.

Fore Funding CA LLC- Sales office for business in California state, no activity for the periods presented

Favo Group Human Resources LLC- Payroll processing for Favo Capital Inc.

As consideration for the acquisition, the Company will pay $14,200,000 in cash, Senior Secured Notes and equity to an entity (FAVO Holdings LLC) owned by the previous members, namely Shaun Quin and Vincent Napolitano.

The Company raised the financing for this transaction by selling 18 million shares of its Series A Preferred Stock at $0.25 for total of $4,500,000. $4,500,000 in cash has been paid to the principals of FAVO Group for the transfer of their membership. $2,500,000 of this financing was paid on the closing date of this transaction. The remaining $2,000,000 was paid as follows: $1,250,000 on August 31, 2023 and the remaining $750,000 on October 26, 2023.

As the Company and the FAVO Group of companies were under common control at the time of the FAVO Group acquisition, the acquisition was deemed to be a transaction under common control under ASC 805, "Business Combinations." Therefore, we accounted for this transaction at the carrying amount of the net assets acquired and the results of operations have been combined for FAVO Capital and (Favo Group LLC, FAVO Group Human Resources, LLC, FAVO Funding LLC, Honeycomb Sub Fund LLC, FORE Funding LLC, FORE Funding CA LLC and FAVO Funding CA LLC) from the date of common control. At time of acquisition Vincent Napolitano and Shaun Quin combined held 76% of the Company's common stock and Vincent Napolitano held 18,750,000 of the Company's series C preferred stock. As at June 30, 2023 post the acquisition Vincent Napolitano and Shaun Quin combined held 56% of the Company's common stock and Vincent Napolitano held 18,750,000 of the Company's series C preferred stock.

The ownership of the entities at the time of the acquisition was as follows:

---

| | | | |
|:---|:---|:---|:---|
| **Entity** | **Vincent Napolitano** | **Shaun Quin** | **FAVO Group LLC** |
| &nbsp;&nbsp; FAVO Group LLC | 65% | 35% |  |
| &nbsp;&nbsp; FAVO Group Human Resources LLC |  | 1% | 99% |
| &nbsp;&nbsp; FAVO Funding LLC | 65% | 35% |  |
| &nbsp;&nbsp; Honeycomb Sub Fund LLC | 65% | 35% |  |
| &nbsp;&nbsp; FORE Funding LLC | 65% | 35% |  |
| &nbsp;&nbsp; FORE Funding CA LLC | 65% | 35% |  |
| &nbsp;&nbsp; FAVO Funding CA LLC | 65% | 35% |  |

---

As a result of the acquisition, the prior period consolidated financial statements for the periods in which the entities were under common control have been adjusted. Accordingly, the Company's prior period consolidated financial statements from the date of common control under FAVO have been adjusted to include the financial information of all the entities for that same period. The $14.2 million consideration has been adjusted in equity given it's a common control transaction.

Assets acquired and liabilities assumed are reported at their historical carrying amounts. The balance sheets of the Favo Group LLC, FAVO Group Human Resources, LLC, FAVO Funding LLC, Honeycomb Sub Fund LLC, FORE Funding LLC, FORE Funding CA LLC and FAVO Funding CA LLC as at when common control was established have been included in the Consolidated balance sheet of the Company, following are the assets acquired and liabilities assumed:

---

| | |
|:---|:---|
| &nbsp;&nbsp; Current assets | $18075101 |
| &nbsp;&nbsp; Fixed assets | 85771 |
| &nbsp;&nbsp; Other non current assets | 779512 |
| &nbsp;&nbsp; **Total Assets** | $18940384 |
| &nbsp;&nbsp; Current liabilities | $316130 |
| &nbsp;&nbsp; Other liabilities | 2943005 |
| &nbsp;&nbsp; Long term liabilities | 19723409 |
| &nbsp;&nbsp; **Total liabilities** | $22982544 |
| &nbsp;&nbsp; **Net liabilities** | $(4042160) |

---

Post acquisition the Company's organizational structure is as follows.

The acquisition further enhances the funding capabilities of the Company as a direct to merchant funder and reduced costs by internalizing the management company. Through the acquisition, the Company also now has an internal sales department that can be leveraged to fund more internal deals. The acquisition also gave the Company access to a larger capital pool, given the FAVO Group of companies already had raised a substantial amount of capital.

 **Note 5 – Fair Value Measurements**

The Company records its financial assets and liabilities at fair value. The carrying amounts of certain of the Company's financial instruments, including cash, trade and other receivables, net, and accounts payable, approximate their fair value due to their short maturities. Fair value is defined as the exchange price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The accounting guidance for fair value establishes a framework for measuring fair value and a fair value hierarchy that prioritizes the inputs used in valuation techniques. The accounting standard describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following:

Level 1 - Observable inputs, such as unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2 - Observable inputs, either directly or indirectly, other than quoted prices in active markets for identical assets or liabilities, such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities; therefore, requiring an entity to develop its own valuation techniques and assumptions.

An entity may choose to measure many financial instruments and certain other items at fair value at specified election dates.

The Company's Simplified Companies deferred consideration was carried at fair value, determined according to Level 3 inputs in the fair value hierarchy described above. Any subsequent changes in the estimated fair value of the deferred consideration are recorded in the consolidated statements of operations.

The following tables set forth the Company's fair value hierarchy for its financial assets and liabilities measured at fair value on a recurring basis as follows:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  | **Level 1** | **Level 2** | **Level 3** | **Total** |
| **Liabilities:** | | | | |
| &nbsp;&nbsp; Deferred consideration (current and non-current) | $— | $— | $558893 | $558893 |
|  | **December 31, 2023** | **December 31, 2023** | **December 31, 2023** | **December 31, 2023** |
|  | **Level 1** | **Level 2** | **Level 3** | **Total** |
| &nbsp;&nbsp; **Liabilities:** |  |  |  |  |
| &nbsp;&nbsp; Deferred consideration (current and non-current) | $— | $— | $— | $— |

---

 **Note 6 – Fixed Assets, net**

At December 31, 2024 and 2023, fixed assets consisted of the following:

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **December 31, 2024**  | **December 31, 2024**  | **December 31, 2024**  | **December 31, 2023** | **December 31, 2023** | **December 31, 2023** |
|  | Cost | Accumulated depreciation | Net Book Value | Cost | Accumulated depreciation | Net Book Value |
| &nbsp;&nbsp; Computers | $102507 | $71929 | $30578 | $64615 | $44111 | $20504 |
| &nbsp;&nbsp; Furniture and Fixtures | 28786 | 12753 | 16033 | 14802 | 2767 | 12035 |
| &nbsp;&nbsp; Office Equipment | 112111 | 19495 | 92616 | 34721 | 7053 | 27668 |
| &nbsp;&nbsp; Vehicles |  |  |  | 90285 | 40629 | 49657 |
| &nbsp;&nbsp; Leasehold improvements | 12643 | 8064 | 4579 | 13871 | 3052 | 10819 |
|  | $256047 | $112241 | $143806 | $218295 | $97612 | $120683 |

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Depreciation expense for the years ended December 31, 2024 and 2023 was $71,364 and $44,643, respectively. The Company evaluates the recoverability of the carrying value of equipment when events and circumstances indicate that such assets might be impaired. There were no such charges during the year ended December 31, 2024.

During the years ended December 31, 2024, the Company sold vehicle costing $90,285, for which the company has charged accumulated depreciation of $56,077 till the date of sale. $40,000 has been received as sale proceeds for sale of vehicle, and the Company recognized gain on sale of vehicle of $5,792. The Company has written off furniture and fixtures, and leasehold improvements with net book value of $1,319 and recognized the same as loss on write off of assets. There were $0 gain or loss on sale/ write off of assets as of December 31, 2023.

 **Note 7 – Related Party Transactions**

During the years ended December 31, 2024 and 2023 the Company incurred costs of $1,020,000 and $510,000, respectively, under the management agreement between FAVO Holdings LLC and the Company.

During the years ended December 31, 2024 and 2023 the Company paid interest on the notes payable of $210,142 and $268,825, respectively, to FAVO Holdings LLC.

During the years ended December 31, 2024 and 2023 the Company paid expenses on behalf of FAVO Holdings LLC in the amount of $119,587 and $5,945, respectively. As at December 31, 2024 and 2023, $15,418 and $135, respectively, remained outstanding.

On July 7, 2023, the Company issued 15,000,000 shares of common stock to a Stewards Investment Capital Limited to serve on the advisory board for a period of 3 years term as per the advisory board agreement. The Company recorded the issuance of shares as stock subscription receivable, as services are not yet rendered and amortizing the same over the 3 years term. For the years ended December 31, 2024 and 2023, the company amortized an amount of $1,250,004 and $729,169, respectively, from stock subscription receivable. During the years ended December 31, 2024 and 2023, Stewards Investment Capital Limited also received cash compensation of $240,000 and 120,000, respectively, for advisory board services.

In 2023, before the FAVO Group acquisition in May 2023 (Note 4) by Favo Capital Inc., Favo Group LLC and Fore Funding LLC distributed their profits $296,935 and $888,047, respectively, as per the terms and conditions in the LLC agreements. The profits were distributed to the members of the LLC, respectively, namely Vincent Napolitano and Shaun Quin.

 *Executive compensation*

For the years ended December 31, 2024 and 2023, compensation to executives of the Company was $1,707,261 and $1,581,979, respectively. Below are the details by Executive.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2023** | **December 31, 2023** |
|  | **Non - Equity** | **Equity** | **Non - Equity** | **Equity** |
| &nbsp;&nbsp; Chief Executive Officer Vincent Napolitano | $940491 | $— | $879018 | $— |
| &nbsp;&nbsp; President <br>Shaun Quin | 534166 |  | 538963 |  |
| &nbsp;&nbsp; Chief Financial Officer <br> Vaughan Korte  | 210763 |  | 163998 |  |
| &nbsp;&nbsp; Chief Strategy Officer <br>Glen Steward | 21841 |  |  |  |
| &nbsp;&nbsp; Total | $1707261 | $— | $1581979 | $— |

---

Non - Equity compensation includes payroll, compensation under the management and consulting agreements, vehicle allowance, fuel and medical expenses. The compensation under the management agreement includes payments made to FAVO Holdings LLC, which is currently owned 65% by Vincent Napolitano and 35% by Shaun Quin. The compensation under the consulting agreement includes payments made to Korte LLC, a company owned 50% by Vaughan Korte.

During the years ended December 31, 2024 and 2023, the Company incurred costs of $83,482 and $0, respectively, payable to Korte LLC for CFO services. The Company's CFO has transitioned from a full time consultant to now an Officer of the Company under the employment agreement effective June 1, 2024.

 **Note 8 – Notes payable – related party**

During the years ended December 31, 2024 and 2023, the Company received $2,800,000 and $1,366,000 from its revolving note agreement with FAVO Holdings and paid back $4,300,000 and $2,562,000, respectively. The balance due on this note as of December 31, 2024 and 2023, was $0 and $1,500,000, respectively.

During the year ended December 31, 2023, the Company issued $4,700,000 to FAVO Holdings LLC in senior secured notes associated with the FAVO Group acquisition. During the year December 31, 2024, the company paid $1,500,000 to FAVO Holding LLC. The balance due on this note as of December 31, 2024 and 2023, was $3,200,000 and $4,700,000, respectively.

 **Note 9 – Notes payable** 

On January 26, 2024, the Company entered into the additional secured promissory note with J&T Family Trust for additional commitment of $2,000,000 at a 14% effective interest rate.

On June 14, 2024, the Company entered into the renewal of secured promissory note with J&T Family Trust which provided (i) for additional commitments with an aggregate principal amount of $5,000,000 (ii) extended the maturity date of the notes to July 1, 2026, and (iii) increased the interest rate from 14% to 15% for all the outstanding LIRO group promissory notes. The Company incurred debt issuance cost of $150,000 by issuing common stock of 600,000 shares at $0.25 per share. The debt issuance cost has been recorded as a direct reduction against the notes and amortized over the life of the associated note as a component of interest expense.

The Company plans to use these proceeds for short-term trade finance business and working capital.

The Company received additional funds from other investors of $175,000.

As of December 31, 2024 and 2023, the total outstanding note principal were $32,338,642 and $25,163,642, respectively, and the unamortized debt issuance costs associated with the note were $109,375 and $0, respectively. Future minimum principal payments are $3,509,419 for 2025 and $28,829,223 for 2026.

 **Note 10 – Commitments and contingencies**

 **Operating leases**

On November 25, 2020, the Company entered into an office lease agreement with AM Property Holding II Corp, agent for 1025 II, LLC. The Company moved into suite 311 on the third floor of the building located at 1025 Old Country Road, Westbury, New York. On September 15, 2021, the Company ended the aforementioned lease agreement and entered into a new lease agreement with the existing landlord and moved into Suite 421 on the fourth floor of the same building. The lease accrues interest based on a weighted average interest rate of 5.52% and a weighted average lease term 72 months.

On January 2, 2024, the company acquired two leases as part of Simplified Companies acquisition as described below. Each lease was recognized and measured at fair value based on the remaining lease term at the date of acquisition by applying ASC 842 - Leases. The fair value of the ROU assets and Lease liabilities acquired was $171,492 as of the acquisition date. The office spaces for these leases are located in Lauderhill, Florida and Bonao, Dominic Republic.

During the year ended December 31, 2024, the Company also added a second call center location in Le Vega, Dominican Republic.

The following table presents the Company's ROU assets and lease liabilities as of December 31, 2024, and December 31, 2023:

---

| | | |
|:---|:---|:---|
| | **For the Years Ended** | **For the Years Ended** |
| <br> **Lease Classification** | **December 31, 2024** | **December 31, 2023** |
| ROU Assets: |  |  |
| Operating | $352261 | $314970 |
| Total ROU assets | $352261 | $314970 |
| Liabilities |  |  |
| Current: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Operating | $146280 | $88009 |
| Noncurrent: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Operating | 203369 | 229848 |
| Total lease liabilities | $349649 | $317857 |

---

---

| | |
|:---|:---|
| **Maturity of Lease Liabilities** | **Operating** |
| 2025 | $146280 |
| 2026 | 144027 |
| 2027 | 86554 |
| Total lease payments | 376861 |
| Less: Interest | 27212 |
| Present value of lease liabilities | $349649 |

---

---

| | | |
|:---|:---|:---|
| | **For the Years Ended** | **For the Years Ended** |
| <br> **Schedule of weighted average remaining lease term and discount rate** | <br>**December 31, 2024**  | <br>**December 31, 2023**  |
| &nbsp;&nbsp;&nbsp;&nbsp; Operating leases: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Weighted average remaining lease term (years) | 2.58 | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Weighted average discount rate | 5.52% | 5.52% |

---

 **Note 11- Net loss per share attributable to common stockholders**

Because the Company was in a net loss position for the years ended December 31, 2024 and 2023, basic net loss per share is the same as diluted net loss per share as the inclusion of all potential common shares outstanding would have been antidilutive.

The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders:

---

| | | |
|:---|:---|:---|
|  | **For the Years Ended** | **For the Years Ended** |
|  | **December 31, 2024** | **December 31, 2023** |
| &nbsp;&nbsp; **Numerator:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; **Net Loss to common shareholders** | $(9121376) | $(7821162) |
| &nbsp;&nbsp; **Denominator:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; **Weighted average shares of common stock outstanding, basic and diluted** | 92638720 | 68039666 |
| &nbsp;&nbsp;&nbsp;&nbsp; **Net loss per share, basic and diluted** | $(0.10) | $(0.11) |

---

The financial instruments that could potentially dilute basic earnings per share in the future and that have been excluded from the computation of diluted net loss per share because including them would have had an antidilutive effect were as follows:

---

| | | |
|:---|:---|:---|
|  | **As of December 31,** | **As of December 31,** |
|  | **2024** | **2023** |
| &nbsp;&nbsp; **Convertible preferred stock series A and series C** | 55770000 | 47170000 |
| &nbsp;&nbsp; **Warrants** | 8000000 |  |
| &nbsp;&nbsp; **Total** | **63770000** | **47170000** |

---

 **Note 12 – Income taxes**

U.S. and foreign components of income (loss) before income taxes were as follows:

---

| | | |
|:---|:---|:---|
| | **For the Years Ended** | **For the Years Ended** |
| | **December 31, 2024** | **December 31, 2023** |
| U.S | $(8490960) | $(7673207) |
| Foreign | (111765) |  |
| **Total** | $**(8602725)** | $**(7673207)** |

---

Provision for income taxes for the year ended December 31, 2024 and 2023 are as follows:

---

| | | |
|:---|:---|:---|
|  | **2024** | **2023** |
| **Current** |  |  |
|  Federal | $— | $— |
| &nbsp;&nbsp; State - incl franchise taxes |  |  |
| &nbsp;&nbsp; Foreign | 56055 |  |
|  | $**56055** | $**—** |
| &nbsp;&nbsp; **Deferred** |  |  |
| &nbsp;&nbsp; Federal | $— | $— |
| &nbsp;&nbsp; State - incl franchise taxes |  |  |
| &nbsp;&nbsp; Foreign |  |  |
|  | $— | $— |

---

The differences between the company's income tax benefit and the benefit computed at the 21% United States statutory income tax rate were as follows:

.

---

| | | |
|:---|:---|:---|
|  | **For the Years Ended** | **For the Years Ended** |
|  | **December 31** | **December 31** |
|  | **2024** | **2023** |
| &nbsp;&nbsp; Income tax recovery at statutory rates (at a rate of 21% for all years presented) | $(1903717) | $(1611374) |
| &nbsp;&nbsp; State income taxes, net of federal benefit | (439486) |  |
| &nbsp;&nbsp; Expenses not deducted for tax purposes | 106405 | 21019 |
| &nbsp;&nbsp; Prior year true up | (530368) |  |
| &nbsp;&nbsp; Foreign tax expenses | 56055 |  |
| &nbsp;&nbsp; Change in Valuation Allowance | 2767166 | 1590355 |
|  | $**56055** | $**—** |

---

The tax effects of the temporary differences and carryforwards that give rise to deferred tax assets and liabilities are as follows:

---

| | | |
|:---|:---|:---|
| | **December 31** | **December 31** |
| <br> **Deferred tax assets** | **2024** | **2023** |
| &nbsp;&nbsp; Net operating loss carryforwards | $5613438 | $2884919 |
| &nbsp;&nbsp; Deferred commissions | 25199 |  |
| &nbsp;&nbsp; Amortization of intangible assets | 27596 |  |
| &nbsp;&nbsp; Charitable contributions | 1081 | 2331 |
| &nbsp;&nbsp; Operating lease liability | 91381 |  |
| &nbsp;&nbsp; Total deferred tax assets | 5758695 | 2887250 |
| &nbsp;&nbsp; Valuation allowance | (5666084) | (2898918) |
| &nbsp;&nbsp; **Net deferred tax assets** | $**92611** | $**(11667)** |
| &nbsp;&nbsp; **Deferred tax liabilities** |  |  |
| &nbsp;&nbsp; Right-of-use asset | (92064) |  |
| &nbsp;&nbsp; Depreciation | (547) | 11667 |
| &nbsp;&nbsp; **Total deferred tax liabilities** | $**(92611)** | $**—** |
| &nbsp;&nbsp; **Net deferred tax liabilities** | $— | $— |

---

The Company accounts for income taxes in accordance with ASC 740 and other authoritative guidance utilizing the asset and liability method. This method requires the recognition of deferred assets or liabilities for the expected future tax consequences of events that have been included in the financial statements. Deferred tax assets or liabilities are calculated as the difference between the financial statements and the tax bases of assets and liabilities applying enacted tax rates in effect for the period in which the differences are expected to settle. The Company records deferred tax assets or liabilities when management determines it is more likely than not that the tax position will be sustained. A valuation allowance is required for deferred tax assets if, based on available evidence, it is more likely than not that all or some portion of the asset will not be realized due to the inability to generate sufficient taxable income in the period or of the character necessary to use the benefit of the deferred tax asset. On the basis of the evaluation, as of December 31, 2024, the Company has recorded a full valuation allowance against the Company's net deferred tax asset.

These NOLs do not expire and may be used to offset future taxable income, subject to applicable tax laws and limitations. The Company's federal NOLs carried forward as of December 31, 2024 are $21,479,789.

We record uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which (1) we determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The company has not identified any uncertain tax positions.

We recognize interest and penalties related to unrecognized tax benefits on the income tax expense line in the accompanying consolidated statement of operations. Accrued interest and penalties are included on the related tax liability line in the consolidated balance sheet. The Company has recorded no penalties and interest in the tax expense for the years ending December 31, 2024 and 2023.

The Company's income tax returns are open for Examination by U.S. federal and state taxing authorities for the tax years ending December 31, 2021 to December 31, 2023. The Company is not currently under examination by any taxing authorities.

 **Note 13 – Variable Interest Entity ("VIE")**

The Company holds variable interest in a VIE which is not consolidated because it was determined that the Company is not the primary beneficiary of the VIE. The Company's involvement with the entity is in the form of direct membership interest and management fee arrangement for program of investment management for assets of VIE. The Company's maximum exposure to loss relating to non-consolidated VIE is the carrying value of its initial investment in the VIE.

The Company's maximum exposure to loss relating to the non-consolidated VIE is as follows:

---

| | | |
|:---|:---|:---|
| **Non- Consolidated VIE** | **December 31, 2024** | **December 31, 2023** |
| &nbsp;&nbsp; Unconsolidated VIE assets | $2526636 | $— |
| &nbsp;&nbsp; Unconsolidated VIE liabilities | $(2405143) | $**—** |
| &nbsp;&nbsp; Due from related party | $1475 | $— |
| &nbsp;&nbsp; Favo Capital Inc. exposure | $1475 | $— |

---

 **Note 14 – Stockholders Equity**

 **Common Stock**

On May 31, 2023, pursuant to Certificate of Designation for the Series C Preferred Stock, Mr. Vincent Napolitano converted 6,250,000 Series C Preferred shares into 25,000,000 shares of common stock at par value $0.0001 of FAVO Capital Inc.

On July 1, 2023, the Company issued 1,600,000 shares of common stock to a consultant for services valued at $400,000,

On July 7, 2023, the Company issued 15,000,000 shares of common stock at a price of $0.25 per share to a Stewards Investment Capital Limited for serving on the advisory board for a 3 year term from June 2023 to May 2026. The outstanding stock subscription receivable pertains to remaining service period from Jan 2025 to May 2026 and there are no significant conditions or contingencies associated with the services.

On July 14, 2023, the Company issued 400,000 shares of common stock to another consultant for services valued at $100,000.

On July 7, 2023, the Company issued another 20,000,000 shares of common stock to Favo Holdings, LLC in accordance with the FAVO Group Acquisition. On the same date, the Company also issued a further 2,400,000 shares to LIRO Holdings LCC in in connection with the promissory note extension.

On December 5, 2023, the Company issued 200,000 shares of common stock to a third party for services valued at $50,000.

In 2023, before the FAVO Group acquisition in May 2023 (Note 4) by Favo Capital Inc., Favo Group LLC and Fore Funding LLC distributed their profits $296,935 and $888,047 respectively as per the terms and conditions in the LLC agreements. The profits were distributed to the members of the LLC respectively, namely Vincent Napolitano and Shaun Quin.

On February 28, 2024, the Company issued 1,000,000 shares of common stock to ROBINPAWS LLC as part of the purchase consideration for the business acquisition.

On February 28, 2024, the Company issued 125,000 shares of common stock to a consultant for services valued at $31,250.

On July 24, 2024, the Company issued 200,000 shares of commons stock to a consultant for services valued at $50,000.

On July 24, 2024, the Company issued 600,000 shares of common stock to LIRO Holdings for the extension of their existing notes valued at $150,000.

As of December 31, 2024 the Company has 500,000 shares of common stock authorized and 97,479,734 shares of common stock issued and outstanding. The remaining authorized shares of common stock are available for purposes of satisfying the conversion of preferred stock and the exercise and future grant of common stock options, warrants and restricted shares.

 **Securities Purchase agreement**

On September 9, 2024, the Company entered into a securities purchase agreement (the "Securities Purchase Agreement") with certain purchasers (the "Purchasers") for the purchase and sale of Company's securities. In an initial closing, the Company issued 8,000,000 of the Common Units, each such Common Unit consisted of one share of the Company's common stock with a par value $0.0001 per share ("Common Stock"), common warrants ("Warrants") to purchase one Common Stock, for every one share of common stock purchased and a pre-funded warrant ("Pre-funded Warrant") to purchase 3/200th share of Common Stock purchased. Pursuant to the Securities Purchase Agreement, the Common Units were sold at a purchase price of $0.25 per share, with five-year Warrants having exercise price of $0.40 per share and the Pre-funded Warrants having exercise price of $0.0001 per share.

The sale of the Units to the Purchasers closed on December 12, 2025. The aggregate gross proceeds to the Company from the December 2024 offering were approximately $2,000,000 before deducting placement agent fees and expenses and other transaction costs of $207,600.

In a second closing, the Company issued 1,750,000 of the Common Units. Pursuant to the Securities Purchase Agreement, the Common Units were sold at a purchase price of $0.25 per share, with five-year Warrants having exercise price of $0.40 per share and the Pre-funded Warrants having exercise price of $0.0001 per share. The sale of the Common Units to the Purchasers closed on July 30, 2025. The aggregate gross proceeds to the Company from the July 2025 offering were approximately $437,500, before deducting placement agent fees and expenses and other transaction costs of $51,350.

The Company issued an additional 5% in common stock and 5% in warrants to all participants of the offering for the first and second closing, in lieu of the effectiveness deadline extension to December 31, 2025. As a result, the Company issued 487,500 shares of common stock and warrants to purchase 487,500 shares of common stock to the investors.

 **Common Stock Warrants**

On September 9, 2024, the Company entered into a securities purchase agreement with certain purchasers and issued 8,000,000 common stock warrants.

As of December 31, 2024 and 2023, the following common stock warrants were outstanding:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Issuance date** | **Expiration date** | **Balance sheet classification** | **Exercise price per share** | **December 31, 2024** | **December 31, 2023** |
| &nbsp;&nbsp; December 11, 2024 | &nbsp;&nbsp; December 11, 2029 | &nbsp;&nbsp; Stockholders' equity | $0.40 | 8000000 |  |
|  |  |  |  | **8000000** |  |

---

The fair value of common stock warrants issued at exercise price of $0.40 per share was determined using Black-Scholes model to be $0.14 per share, based on the following assumptions as the issuance date.

---

| | |
|:---|:---|
| &nbsp;&nbsp; Dividend Yield | 0% |
| &nbsp;&nbsp; Expected Volatility | 75% |
| &nbsp;&nbsp; Risk- free interest rate | 4.09% |
| &nbsp;&nbsp; Expected term | 5 Years |

---

The aggregate fair value of the Common Stock Warrants of $1,087,831 is classified in stockholders' deficit on the consolidated balance sheet.

 **Preferred Stock**

  ****

 ***Series C Preferred Stock***

On December 6, 2018, the Company created 25,000,000 shares of Series C Preferred Stock out of the 25,000,000 shares that were already authorized. On that same date, the Company issued 25,000,000 shares of the Series C preferred stock to Custodian Ventures, LLC, for a promissory note valued at $25,000 and for services valued at $173,056. On December 12, 2018, Custodian Ventures, LLC sold the 25,000,000 shares of Series C Preferred Stock to Vincent Napolitano as part of a change of control.

The following is a description of the material rights of our Series C Preferred Stock.

Each share of Series C Preferred Stock shall have a par value of $0.0001 per share. The Series C Preferred Stock shall vote on any matter that may from time to time be submitted to the Company's shareholders for a vote, on a 25 for one basis. If the Company effects a stock split which either increases or decreases the number of shares of Common Stock outstanding and entitled to vote, the voting rights of the Series C shall not be subject to adjustment unless specifically authorized.

Each share of Series C Preferred Stock shall be convertible into 1 shares of Common Stock ("Conversion Ratio"), at the option of a Holder, at any time and from time to time, from and after the issuance of the Series C Preferred Stock.

Subject to the rights of any existing series of Preferred Stock or to the rights of any series of Preferred Stock which may from time to time hereafter come into existence, the holders of shares of Series C Preferred Stock shall be entitled to receive dividends, out of any assets legally available therefor, upon any payment of any dividend (payable other than in Common Stock or other securities and rights convertible into or entitling the holder thereof to receive, directly or indirectly, additional shares of Common Stock of the Corporation) on the Common Stock of the Corporation, as and if declared by the Board of Directors, as if the Series C Preferred Stock had been converted into Common Stock.

In the event of any liquidation, dissolution or winding up of the Corporation, either voluntary or involuntary, subject to the rights of any existing series of Preferred Stock or to the rights of any series of Preferred Stock which may from time to time hereafter come into existence, the holders of the Series C 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 Common Stock by reason of their ownership thereof, an amount per share equal to the price per share actually paid to the Corporation upon the initial issuance of the Series C Preferred Stock (each, the "the Original Issue Price") for each share of Series C Preferred Stock then held by them, plus declared but unpaid dividends. Unless the Corporation can establish a different Original Issue Price in connection with a particular sale of Series C Preferred Stock, the original issue price shall be $0.0001 per share for the Series C Preferred Stock. If, upon the occurrence of any liquidation, dissolution or winding up of the Corporation, the assets and funds thus distributed among the holders of the Series C Preferred Stock shall be insufficient to permit the payment to such holders of the full aforesaid preferential amounts, then, subject to the rights of any existing series of Preferred Stock or to the rights of any series of Preferred Stock which may from time to time hereafter come into existence, the entire assets and funds of the corporation legally available for distribution shall be distributed ratably among the holders of the each series of Preferred Stock in proportion to the preferential amount each such holder is otherwise entitled to receive.

The Series C Preferred Stock shares are nonredeemable other than upon the mutual agreement of the Company and the holder of shares to be redeemed, and even in such case only to the extent permitted by this Certificate of Designation, the Corporation's Articles of Incorporation and applicable law.

Series C 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 such stock, into such number of fully paid and nonassessable shares of Common Stock as is determined by dividing the Original Issue Price of the Series C Preferred Stock by the Series C Conversion Price applicable to such share, determined as hereafter provided, in effect on the date the certificate is surrendered for conversion.

Each share of Series C Preferred Stock shall automatically be converted into shares of Common Stock at the applicable Series C Conversion Price in effect for such share immediately upon the earlier of (i) except as provided below in Section 4(c), the Corporation's sale of its Common Stock in a public offering pursuant to a registration statement under the Securities Act of 1933, as amended; (ii) a liquidation, dissolution or winding up of the Corporation as defined in section 2(c) above but subject to any liquidation preference required by section 2(a) above; or (iii) the date specified by written consent or agreement of the holders of a majority of the then outstanding shares of Series C Preferred Stock.

On May 31, 2023, pursuant to Certificate of Designation for the Series C Preferred Stock, Mr. Vincent Napolitano converted 6,250,000 Series C Preferred shares into 25,000,000 common shares at par value $0.0001 of FAVO Capital Inc.

On June 7, 2023, the Company filed with the Secretary of State of the State of Nevada a Certificate of Amendment to the Articles of Incorporation to increase the authorized shares of Preferred Stock of the Company (the "Amendment"). The Amendment increased the authorized shares of Preferred Stock the Company may issue from 25,000,000 shares to 50,000,000 shares of Preferred Stock, par value $0.0001 per share. The Amendment did not increase the Company's authorized shares of Common Stock, which remains at 500,000,000 shares, par value $0.0001 per share. The Amendment was approved by the board of directors by unanimous written consent resolution dated May 31, 2023 signed by all the members of the board of directors. The Amendment was also approved by certain shareholders of the Company holding a majority of the total issued and outstanding voting shares of the Company by written consent resolution dated May 31, 2023.

On November 22, 2023, the Company elected to decrease its authorized shares of Series C preferred shares from 25,000,000 shares down to 18,250,000 shares.

As of December 31, 2024 and 2023, 18,750,000 shares of Series C preferred stock remained outstanding, respectively.

  ****

  ****

 ***Series A Preferred Stock***

On May 31, 2023, pursuant to Article III of our Articles of Incorporation, our Board of Directors voted to designate a class of preferred stock entitled Series A Preferred Stock, consisting of up to 20,000,000 shares, par value $0.0001. Under the Certificate of Designation, filed on June 5, 2023, holders of Series A Preferred Stock are entitled to a liquidation preference of $0.25 per share, the Stated Value of the newly created preferred stock, over our common stock and Series C Preferred Stock in the event of a dissolution, liquidation or winding up of the company. The holders of Series A Preferred Stock vote together with the holders of Common Stock and any other class or series of stock entitled to vote thereon as a single class on an as converted basis. Each holder shall be entitled to receive an annual dividend of six percent (6%) of the Stated Value times the number of Preferred Shares held by such holder payable on a quarterly basis beginning at the end of the Company's fiscal quarter following the original issue date. Dividends on the Preferred Shares are payable, at the Company's option, in (a) cash or (b) shares of the Company's Common Stock or a combination thereof. The Company may, in its sole discretion, elect to redeem all or a portion of the outstanding Preferred Shares at the Redemption Amount. As used herein, the term "Redemption Amount" shall equal the Stated Value. If the Company does not redeem all of the outstanding Preferred Shares, but instead opts for a partial redemption, it must be done in at least $250,000 increments and for every $250,000 redeemed the Company will issue to the Holder a warrant to purchase 1,000,000 shares of the Company's Common Stock at an exercise price of $0.25 share.

On November 27, 2023, the Company elected to increase its authorized shares of Series A preferred shares from 20,000,000 shares to 81,250,000 shares.

From June 30, 2023 to December 5, 2023, the Company issued another 28,420,000 shares of Series A Preferred stock to Forfront Capital, LLC in accordance with the FAVO Group Acquisition and additional investments.

In the year ended December 31, 2024, the Company issued another 8,600,000 shares of Series A Preferred Stock to Forefront Capital LLC for additional investment.

As of December 31, 2024 and 2023, 37,020,000 and 28,420,000 shares of Series A preferred stock with par value of $0.0001 remained outstanding, respectively.

 **Note 15. Segment Information**

We operate and manage our business as a single segment for the purposes of assessing performance and making operating decisions. Our chief executive officer, who is our chief operating decision maker ("CODM") , reviews the Company's financial information on a consolidated basis for purposes of evaluating financial performance and allocating resources. Our CODM evaluates company performance based on net loss, as included in the consolidated statements of operations and comprehensive loss, ensuring resource allocation decisions support company goals. The measure of segment assets is total assets, as included in the consolidated balance sheets. Refer to the consolidated financial statements for other financial information regarding our single reportable segment.

The following table presents certain financial data for the Company's reportable segment, including significant segment expenses regularly provided to the chief operating decision maker to assess performance of the Company.

---

| | | |
|:---|:---|:---|
|  | **For the Years Ended** | **For the Years Ended** |
|  | **December 31,** | **December 31,** |
|  | **2024** | **2023** |
| &nbsp;&nbsp; Revenue | $12787262 | $11800228 |
| &nbsp;&nbsp; Cost of revenue | (2358114) | (3497364) |
| &nbsp;&nbsp; General and administrative expenses | (7814809) | (5318338) |
| &nbsp;&nbsp; Selling, general and administrative expenses | (4019840) | (5561517) |
| &nbsp;&nbsp; Professional fees | (2517381) | (1728146) |
| &nbsp;&nbsp; Other segment expenses | (4679843) | (3368070) |
| &nbsp;&nbsp; **Net loss before income taxes** | $**(8602725)** | $**(7673207)** |

---

Other segment expenses consist of interest expenses, loss on write down of investment and gain on sale of property, equipment and exchange loss. These are disclosed in the consolidated statements of operations and comprehensive loss.

 **Note 16– Subsequent Events**

Subsequent events have been evaluated through April 15, 2025, which is the date these Consolidated Financial Statements were available for issuance. Except for the events noted below, we are not aware of any subsequent events that would require recognition or disclosure in the Consolidated Financial Statements.

On February 12, 2025, the Company's Board approved the following in line with the letter of engagement signed with D Boral Capital LLC regarding the Company's underwritten offering. To offer and sell (i) $15,000,000 in shares of common stock or more depending on the outcome once underwritten, (ii) an overallotment of 15% of the offering in shares of common stock at the option of Boral Securities (the "Option Shares"), and (iii) the Corporation is authorized to file a resale prospectus for the selling shareholders of the Corporation that participated in the bridge financing and signed registration rights agreements.

On February 28, 2025 the Company issued Robinpaws LLC 2,000,000 shares of common stock in line with the business purchase agreement for Simplified Companies acquisition.

**FAVO CAPITAL, INC.** 

**CONDENSED CONSOLIDATED BALANCE SHEETS**

**(Unaudited)**

---

| | | |
|:---|:---|:---|
|  | **June 30,**<br> **2025**<br> **(Unaudited)** | **December 31,**<br>**2024**<br> **(Audited)** |
| **ASSETS** |  |  |
| **CURRENT ASSETS** |  |  |
| Cash | $900109 | $2751386 |
| Advance receivables (net of allowance for credit losses of $19,726,196 and $19,034,976 as of June 30, 2025 and December 31, 2024, respectively) | 15578678 | 14542518 |
| Advance payment for acquisition | 5000000 |  |
| Other current assets | 339309 | 109753 |
| Due from related parties | 50503 | 41307 |
| **Total current assets** | 21868599 | 17444964 |
| Fixed assets, net | 138223 | 143806 |
| Intangible assets, net | 607498 | 705000 |
| Goodwill | 1219134 | 1219134 |
| Operating lease right-of-use asset, net | 286886 | 352262 |
| Other assets |  | 371 |
| **TOTAL ASSETS** | $24120340 | $19865537 |
| **LIABILITIES AND STOCKHOLDERS' DEFICIT** |  |  |
| **CURRENT LIABILITIES** |  |  |
| Accounts payable and accrued liabilities | $1262249 | $1528228 |
| Syndicate payable | 4930661 | 5284505 |
| Due to related parties - current | 1600000 | 1600000 |
| Deferred consideration - current | 213826 | 207721 |
| Operating lease obligation - current | 156237 | 146280 |
| **Total current liabilities** | 8162973 | 8766734 |
| Operating lease obligation - noncurrent | 135785 | 203369 |
| Due to related party - noncurrent |  | 1600000 |
| Deferred consideration - noncurrent | 267928 | 351172 |
| Notes payable, net | 34391767 | 32229267 |
| **Total liabilities** | 42958453 | 43150542 |
| Commitments and Contingencies (Note 10) |  |  |
| **STOCKHOLDERS' DEFICIT** |  |  |
| Series A preferred stock, par value $0.0001 per share; 81,250,000 |  |  |
| &nbsp;&nbsp; shares authorized; 69,020,000 and 37,020,000 shares issued and outstanding |  |  |
| &nbsp;&nbsp; as of June 30, 2025 and December 31, 2024, respectively | 6902 | 3702 |
| Series C preferred stock, par value $0.0001 per share; 18,750,000 |  |  |
| &nbsp;&nbsp; shares authorized; 0 and 18,750,000 shares issued and outstanding as of |  |  |
| &nbsp;&nbsp; June 30, 2025 and December 31, 2024, respectively |  | 1875 |
| Common stock, par value $0.0001 per share; 500,000,000 shares |  |  |
| &nbsp;&nbsp; authorized; 118,629,734 and 97,479,734 shares issued and outstanding |  |  |
| &nbsp;&nbsp; as of June 30, 2025 and December 31, 2024, respectively | 11863 | 9748 |
| Additional paid-in capital | 22463687 | 14315979 |
| Stock subscription receivable | (1145825) | (1770827) |
| Accumulated deficit | (40179891) | (35848153) |
| Accumulated other comprehensive income | 5151 | 2671 |
| **Total stockholders' deficit** | (18838113) | (23285005) |
| **TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT** | $24120340 | $19865537 |

---

The accompanying notes are an integral part of these condensed consolidated financial statements.

**FAVO CAPITAL, INC.** 

**CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS**

**(Unaudited)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** | **Six Months Ended** | **Six Months Ended** |
|  | **June 30, 2025** | **June 30, 2024** | **June 30, 2025** | **June 30, 2024** |
| Revenue | $3315179 | $3398203 | $6680404 | $6452878 |
| Cost of revenue | 722584 | 642592 | 1376405 | 1124985 |
| **Gross profit** | 2592595 | 2755611 | 5303999 | 5327893 |
| Operating expenses: |  |  |  |  |
| &nbsp;&nbsp; General and administrative expenses | 2158329 | 1908897 | 4181244 | 3654890 |
| &nbsp;&nbsp; Provision for bad debt expense | 481130 | 1182663 | 1047374 | 2562242 |
| &nbsp;&nbsp; Professional fees | 752996 | 612881 | 1327412 | 1147580 |
| **Total operating expenses** | 3392455 | 3704441 | 6556030 | 7364712 |
| **Loss from operations** | (799860) | (948830) | (1252031) | (2036819) |
| Other income (expense): |  |  |  |  |
| &nbsp;&nbsp; Interest expense | (1469359) | (1120492) | (2782617) | (2127670) |
| &nbsp;&nbsp; Interest income | 64583 |  | 64583 |  |
| &nbsp;&nbsp; Loss on write down of investment |  | (1685) |  | (1685) |
| &nbsp;&nbsp; Other loss | (4560) | (6118) | (12461) | (12154) |
| **Total other expenses, net** | (1409336) | (1128295) | (2730495) | (2141509) |
| **Net loss before income taxes** | (2209196) | (2077125) | (3982526) | (4178328) |
| Income tax provision |  |  |  |  |
| **Net loss** | (2209196) | (2077125) | (3982526) | (4178328) |
| Preferred shares interest expense | (210387) | (108371) | (349212) | (214946) |
| **Net loss to common shareholders** | $(2419583) | $(2185496) | $(4331738) | $(4393274) |
| Net loss per common share - basic and diluted | $(0.02) | $(0.02) | $(0.04) | $(0.05) |
| Weighted-average common shares outstanding - basic and diluted | 112638745 | 92877536 | 106508850 | 91136916 |
| Comprehensive loss: |  |  |  |  |
| &nbsp;&nbsp; Net loss | $(2419583) | $(2185496) | $(4331738) | $(4393274) |
| &nbsp;&nbsp; Unrealized gain (loss) on foreign currency translation |  | 4225 | 2480 | (453) |
| **Total comprehensive loss** | $(2419583) | $(2181271) | $(4329258) | $(43 93727) |

---

The accompanying notes are an integral part of these condensed consolidated financial statements.

**FAVO CAPITAL, INC.** 

**CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' (DEFICIT)**

**(Unaudited)**

---

| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Series A Preferred Stock** | **Series A Preferred Stock** | **Series C Preferred Stock** | **Series C Preferred Stock** | **Common Stock** | **Common Stock** | | | | | |
|  | **Number of**<br> **Shares** |<br> **Par Value** | **Number of**<br> **Shares** |<br> **Par Value** | **Number of**<br> **Shares** |<br> **Par Value** |<br> **Additional Paid-In Capital** |<br> **Stock Subscription Receivable** |<br> **Accumulated Deficit** |<br> **Other Comprehensive Income** |<br> **Total Stockholders' Deficit** |
| **Balances as at December 31, 2024** | **37020000** | $**3702** | **18750000** | $**1875** | **97479734** | $**9748** | $**14315979** | $**(1770827)** | $**(35848153)** | $**2671** | $**(23285005)** |
| &nbsp;&nbsp; Common stock issued for Simplified Companies acquisition |  |  |  |  | 2000000 | 200 | (200) |  |  |  |  |
| &nbsp;&nbsp; Issuance of common shares for stock subscription receivable |  |  |  |  |  |  |  | 312501 |  |  | 312501 |
| &nbsp;&nbsp; Net loss |  |  |  |  |  |  |  |  | (1912155) | 2480 | (1909675) |
| **Balances as at March 31, 2025** | **37020000** | $**3702** | **18750000** | $**1875** | **99479734** | $**9948** | $**14315779** | $**(1458326)** | $**(37760308)** | $**5151** | $**(24882179)** |
| &nbsp;&nbsp; Series C preferred stock conversion to common stock |  |  | (18750000) | (1875) | 18750000 | 1875 |  |  |  |  |  |
| &nbsp;&nbsp; Issuance of Series A preferred stock | 32000000 | 3200 |  |  |  |  | 7996800 |  |  |  | 8000000 |
| &nbsp;&nbsp; Issuance of common shares for stock subscription receivable |  |  |  |  |  |  |  | 312501 |  |  | 312501 |
| &nbsp;&nbsp; Issuance of common stock and warrants related to registration rights payment arrangement |  |  |  |  | 400000 | 40 | 151108 |  |  |  | 151148 |
| &nbsp;&nbsp; Net loss |  |  |  |  |  |  |  |  | (2419583) |  | (2419583) |
| **Balances as at June 30, 2025** | **69020000** | $**6902** | **—** | $**—** | **118629734** | $**11863** | $**22463687** | $**(1145825)** | $**(40179891)** | $**5151** | $**(18838113)** |

---

---

| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Series A Preferred Stock** | **Series A Preferred Stock** | **Series C Preferred Stock** | **Series C Preferred Stock** | **Common Stock** | **Common Stock** | | | | | |
|  | **Number of**<br> **Shares** |<br> **Par Value** | **Number of**<br> **Shares** |<br> **Par Value** | **Number of**<br> **Shares** |<br> **Par Value** |<br> **Additional Paid-In Capital** |<br> **Stock Subscription Receivable** |<br> **Accumulated Deficit** |<br> **Accumulated Other Comprehensive Income (Loss)** |<br> **Total Stockholders' Deficit** |
| **Balances as at December 31, 2023** | **28420000** | $**2842** | **18750000** | $**1875** | **87554734** | $**8755** | $**9154182** | $**(3020831)** | $**(26726777)** | $**—** | $**(20579954)** |
| &nbsp;&nbsp; Common stock issued for Simplified Companies acquisition |  |  |  |  | 1000000 | 100 | 249900 |  |  |  | 250000 |
| &nbsp;&nbsp; Deferred equity consideration on Simplified Companies acquisition |  |  |  |  |  |  | 740000 |  |  |  | 740000 |
| &nbsp;&nbsp; Common stock issued for services |  |  |  |  | 125000 | 13 | 31237 |  |  |  | 31250 |
| &nbsp;&nbsp; Issuance of common shares for stock subscription receivable |  |  |  |  |  |  |  | 312501 |  |  | 312501 |
| &nbsp;&nbsp; Net loss |  |  |  |  |  |  |  |  | (2207778) | (4678) | (2212456) |
| **Balances as at March 31, 2024** | **28420000** | $**2842** | **18750000** | $**1875** | **88679734** | $**8868** | $**10175319** | $**(2708330)** | $**(28934555)** | $**(4678)** | $**(21458659)** |
| &nbsp;&nbsp; Common stock issued for promissory note extension |  |  |  |  | 600000 | 60 | 149940 |  |  |  | 150000 |
| &nbsp;&nbsp; Issuance of common shares for stock subscription receivable |  |  |  |  |  |  |  | 312501 |  |  | 312501 |
| &nbsp;&nbsp; Preferred Stock issuances | 600000 | 60 |  |  |  |  | 149940 |  |  |  | 150000 |
| &nbsp;&nbsp; Net loss |  |  |  |  |  |  |  |  | (2185496) | 4225 | (2181271) |
| **Balances as at June 30, 2024** | **29020000** | $**2902** | **18750000** | $**1875** | **89279734** | $**8928** | $**10475199** | $**(2395829)** | $**(31120051)** | $**(453)** | $**(23027429)** |

---

The accompanying notes are an integral part of these condensed consolidated financial statements.

**FAVO CAPITAL, INC.** 

**CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS**

**(Unaudited)**

---

| | | |
|:---|:---|:---|
|  | **Six Months Ended** | **Six Months Ended** |
|  | **June 30, 2025** | **June 30, 2024** |
| **Cash Flows From Operating Activities** |  |  |
| Net loss | $(4331738) | $(4393274) |
| Adjustments to reconcile net loss to net cash flows from operating |  |  |
| &nbsp;&nbsp; activities: |  |  |
| &nbsp;&nbsp; Depreciation and amortization | 123276 | 130514 |
| &nbsp;&nbsp; Loss on sale of investments |  | 1685 |
| &nbsp;&nbsp; Amortization of debt issuance costs | 37500 | 3125 |
| &nbsp;&nbsp; Issuance of common stock and warrants related to registration rights payment arrangement | 151148 |  |
| &nbsp;&nbsp; Operating lease right-of-use asset amortization | 65376 | 62008 |
| &nbsp;&nbsp; Provision for bad debt expense | 1047374 | 2562242 |
| &nbsp;&nbsp; Common stock issued for services |  | 31250 |
| &nbsp;&nbsp; Amortization of stock subscription receivable | 625002 | 625002 |
| &nbsp;&nbsp; Interest expense on deferred consideration | 37859 | 48263 |
| &nbsp;&nbsp; Other income | 2516 |  |
| Changes in assets and liabilities: |  |  |
| &nbsp;&nbsp; Advance receivables, net | (2083534) | (1788242) |
| &nbsp;&nbsp; Other current assets | (229556) | (86671) |
| &nbsp;&nbsp; Accounts payable and accrued liabilities | (265979) | 341351 |
| &nbsp;&nbsp; Syndicate payable | (353844) | (1090198) |
| &nbsp;&nbsp; Due from related parties | (9196) | (33886) |
| &nbsp;&nbsp; Other non-current assets | 371 | 603 |
| &nbsp;&nbsp; Other non-current liabilities |  | (45400) |
| &nbsp;&nbsp; Due to a related party |  | (122437) |
| &nbsp;&nbsp; Operating lease obligations | (57627) | (60766) |
| **Net cash used in operating activities** | (5241052) | (3814831) |
| **Cash Flows From Investing Activities** |  |  |
| Purchases of property and equipment | (20191) | (48218) |
| Cash paid for acquisition of a business |  | (400000) |
| Payment of deferred consideration | (114998) | (114999) |
| Advance payment for acquisition | (5000000) |  |
| **Net cash provided by (used in) investing activities** | (5135189) | (563217) |
| **Cash Flows From Financing Activities** |  |  |
| Proceeds from notes payable | $2125000 | $7150000 |
| Payments made against promissory notes payable, related party | (1600000) | (1500000) |
| Proceeds from the issuance of Series A preferred stock | 8000000 | 150000 |
| Payments made against notes payable, related party |  | (1500000) |
| **Net cash provided by financing activities** | 8525000 | 4300000 |
| **Net change in cash** | (1851241) | (78048) |
| Effect of Exchange Rate Changes on Cash | (36) | (453) |
| **Cash, Beginning** | 2751386 | 1147295 |
| **Cash, Ending** | $900109 | $1068794 |
| **SUPPLEMENTAL DISCLOSURES OF CASH FLOW** |  |  |
| **INFORMATION** |  |  |
| Cash paid for interest | $2521448 | $1893702 |
| Cash paid for income taxes | $— | $— |
| **SUMMARY OF NON-CASH INVESTING AND FINANCING** |  |  |
| **ACTIVITIES** |  |  |
| Issuance of deferred equity consideration | $200 | $— |
| Common stock issued at acquisition | $— | $250000 |
| Deferred equity consideration at acquisition | $— | $740000 |
| Other deferred consideration at acquisition. | $— | $577469 |
| Issuance of common stock for promissory note extension | $— | $15000 0 |

---

The accompanying notes are an integral part of these condensed consolidated financial statements.

**FAVO CAPITAL, INC.** 

**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(Unaudited)**

 **Note 1 - Organization**

FAVO Capital, Inc. ("the Company") was incorporated as Beeston Enterprises Ltd. on July 12, 1999 under the laws of the State of Nevada. The Company changed its name to FAVO Capital, Inc. on September 2, 2020, which was the market effective date established by the Financial Industry Regulatory Authority ("FINRA"). Previously, the Company was an exploration stage company engaged in the search of mineral deposits that could be developed to a state of a commercially viable producing mine. The Company is a private credit company focused on providing alternative financing solutions to small and medium-sized businesses ("SMB") across the United States. The Company's business model is centered around direct and syndicated revenue-based funding solutions that address the capital needs of SMBs underserved by traditional lending institutions. In support of the private credit business the Company has strategically expanded into the real estate sector and will explore real estate opportunities that improve access to alternative sources of working capital.

 **Note 2 - Going Concern**

The accompanying condensed consolidated financial statements have been prepared assuming the continuation of the Company as a going concern. The Company has an accumulated deficit of $40,179,891 as of June 30, 2025 and a net loss of $4,331,738 and negative cash generated from operating activities of $5,241,052 for the six months ended June 30, 2025. These conditions raise substantial doubt regarding the Company's ability to continue as a going concern. However, the Company has established an ongoing source of revenues, but it is currently not sufficient to cover the Company's operating costs, and therefore, the Company is dependent upon debt and equity financing to fund its operations. Management of the Company is making efforts to increase its revenue and raise additional funding until a registration statement relating to an equity funding facility is in effect. In July and August, 2025, the Company raised $1,250,000 through issuance of Series A preferred shares and in July 2025, the Company raised $386,150 through issuance of Common Stock. In July 2025, the Company acquired a mixed use property (refer note 15) and management expects to generate additional revenues from the property and improve access to alternative funding partners. While management of the Company believes that it will be successful in its capital formation and planned operating activities, there can be no assurance that the Company will be able to raise additional equity capital or be successful in the development and commercialization of the products it develops or initiate collaboration agreements thereon. The accompanying condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.

 **Note 3 - Summary of Significant Accounting Policies**

 ***Basis of Presentation***

The accompanying condensed consolidated financial statements are prepared on the basis of accounting principles generally accepted in the United States of America ("U.S. GAAP").

  ****

  ****

 ***Unaudited Condensed Consolidated Financial Statements***

The condensed consolidated balance sheets as of June 30, 2025 and December 31, 2024, and the condensed consolidated statements of operations and comprehensive loss, stockholders' deficit for the six months ended June 30, 2025 and 2024, and three months ended June 30, 2025 and 2024, and cash flows for the six months ended June 30, 2025 and 2024 are unaudited. The unaudited condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and reflect, in the opinion of management, all adjustments of a normal and recurring nature that are necessary for the fair statement of the Company's financial position as of June 30, 2025 and December 31 2024 and its results of operations and cash flows for the six months ended June 30, 2025 and 2024, and three months ended June 30, 2025 and June 2024. The financial data and the other financial information disclosed in the notes to the condensed consolidated financial statements related to the six months period are also unaudited. The results of operations for the six months ended June 30, 2025 are not necessarily indicative of the results to be expected for the year ending December 31, 2025, or for any other future annual or interim period. The condensed consolidated balance sheet as of December 31, 2024 included herein was derived from the audited consolidated financial statements as of that date. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted from these condensed consolidated financial statements. These condensed consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements for the years ended December 31, 2024 and 2023.

 ***Use of Estimates***

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the condensed consolidated financial statements and accompanying notes. Estimates and assumptions reflected in the condensed consolidated financial statements include, but are not limited to, revenue recognition, the useful lives and carrying value of long-lived assets, the provision for bad debt expense, share-based compensation, and income taxes. Actual results could differ from those estimates.

 ***Prior-Period Presentation***

Certain prior-period amounts in the condensed consolidated balance sheets, condensed consolidated statement of operations and comprehensive loss, and condensed consolidated statement of cash flows have been reclassified to be consistent with the current-period presentation. There are no significant reclassifications.

 ***Property, equipment and leasehold improvements.***

Property, equipment and leasehold improvements are stated at historical cost less accumulated depreciation and impairment. The historical cost of acquiring an item of property and equipment or undertaking leasehold improvements includes the costs necessarily incurred to bring it to the condition and location necessary for its intended use.

Maintenance and repairs are charged to expense as incurred. When items of property or equipment are sold or retired, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is included in the results of operations. Depreciation is calculated on a straight-line basis over the estimated useful lives of the respective assets.

The estimated useful lives of depreciable assets are as follows:

---

| | |
|:---|:---|
| Computers and equipment | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3-5 years |
| Office furniture and fixtures | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5-7 years |
| Vehicles | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5 years |
| Leasehold improvements | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Shorter of the lease term or the estimated useful life |

---

 ***Concentration of Credit Risk***

Cash and cash equivalents consist of financial instruments that potentially subject the Company to a concentration of credit risk in the event of a default by the related financial institution holding the cash or securities, to the extent of the value recorded in the condensed consolidated balance sheets. The Company maintains its cash accounts in financial institutions with Federal depository insurance coverage ("FDIC") of $250,000. The Company has not experienced losses on these accounts, and management believes that the Company is not exposed to significant risks on such accounts.

  ****

 ***Fair Value of Financial Instruments***

Accounting Standards Codification ("ASC") 825, *Disclosures About Fair Value of Financial Instruments*, requires the disclosure of fair value information about financial instruments. ASC 820, *Fair Value Measurements*, defines fair value, establishes a framework for measuring fair value in U.S. GAAP, and expands disclosures about fair value measurements. Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of June 30, 2025 and December 31, 2024.

Authoritative literature provides a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument's categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement as follows:

 *Level 1* - Quoted market prices available in active markets for identical assets or liabilities that the Company has access to at the measurement date.

 *Level 2* - Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates, yield curves, etc.), and inputs that are derived principally from, or corroborated by, observable market data by correlation or other means (market-corroborated inputs).

 

 *Level 3* - Unobservable inputs that reflect the Company's assumptions about the assumptions that market participants would use in pricing the asset or liability.

The respective carrying values of certain on-balance-sheet financial instruments approximate their fair values. These financial instruments include cash, advance receivables, accounts payable and accrued liabilities, deferred consideration, notes payable, and due to and from related parties. Fair values were assumed to approximate carrying values for these financial instruments due to their short-term maturities.

 ***Accounting Pronouncement Not Yet Adopted***

In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2023-09, *Income Taxes - Improvements to Income Tax Disclosures*. The amendments require enhanced disclosures in connection with an entity's effective tax rate reconciliation, income taxes paid disaggregated by jurisdiction, and clarification on uncertain tax positions and related statement impacts. The amendments are effective for annual periods beginning after December 15, 2024. The Company is currently evaluating the impact of this amendment on its financial statement disclosures.

In November 2024, the FASB issued ASU 2024-03, *Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses*. This amendment is expected to improve financial reporting by requiring that public business entities disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. This information is not generally presented in the financial statements today. The amendments in this update do not change or remove current expense disclosure requirements.

This ASU is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The amendments in this update should be applied either prospectively to financial statements issued for reporting periods after the effective date of this update or retrospectively to any or all periods presented in the financial statements. The Company is currently evaluating the impact of the new standard.

 **Note 4 - Business Combinations**

On January 2, 2024, the Company acquired 100% membership interest in DBOSS Funding, LLC (dba Simplified Funding), LendTech CRM Solutions, LLC, and Believe PMF EIRL (collectively referred as "Simplified Companies").

The Simplified Companies are engaged in the business of using proprietary software and call centers in the Dominican Republic and Florida to offer secured and unsecured financial products and services to clients with funders across the United States. The business generates revenue from the commissions generated from the funders.

The primary reason for the business combination is to grow direct funding business and improve overall margins by leveraging the synergies between the Company and the Simplified Companies.

In accordance with ASC 805, the acquisition was accounted for as a business combination under the acquisition method. The purchase consideration was allocated to the working capital and tangible and intangible assets acquired based on their estimated fair values as of the acquisition date, with the excess recorded as goodwill, as follows:

---

| | |
|:---|:---|
| &nbsp;&nbsp; Goodwill | $1219134 |
| &nbsp;&nbsp; Tangible assets | 48862 |
| &nbsp;&nbsp; Intangible assets | 900000 |
| &nbsp;&nbsp; **Net assets acquired** | $**2167996** |

---

The fair value of the intangible assets was determined by applying the income approach, direct cost method and multi-period excess earnings method. The fair value measurements are based on significant unobservable inputs, including management estimates and assumptions, and thus represent Level 3 measurements.

There were no transaction costs associated with the acquisition.

The goodwill balance is primarily attributed to the assembled workforce and synergies after the acquisition. No material measurement-period adjustments were recognized during the six months ended June 30, 2025 or 2024.

The Company obtained control of the Simplified Companies upon the transfer of cash consideration to the selling shareholders. The total consideration transferred in the acquisition was $2,167,996, consisting of the following:

---

| | |
|:---|:---|
| &nbsp;&nbsp; Cash, including working capital adjustment | $485527 |
| &nbsp;&nbsp; Equity | 990000 |
| &nbsp;&nbsp; Deferred consideration | 692469 |
| &nbsp;&nbsp; **Total purchase consideration** | $**2167996** |

---

The equity consideration represents 5,000,000 shares of the Company's common stock, of which 4,000,000 shares will be issued in two tranches of 2,000,000 shares each on the first and second anniversaries of the acquisition date.

Deferred consideration represents the present value at the acquisition date of the cash payments of $920,000, payable in equal weekly installments over four years.

 **Note 5 – Allowance for Credit Losses**

The change in the allowance for expected credit losses on advance receivables during the six months ended June 30, 2025 is summarized as follows:

---

| | |
|:---|:---|
| &nbsp;&nbsp; Beginning balance | $19034976 |
| &nbsp;&nbsp; Provision for (reversal of) credit losses | 1255690 |
| &nbsp;&nbsp; Charge-offs | (573018) |
| &nbsp;&nbsp; Recoveries | 8548 |
| &nbsp;&nbsp; **Ending balance** | $**19726196** |

---

 **Note 6 - Fixed Assets, Net**

At June 30, 2025 and December 31, 2024, fixed assets consisted of the following:

---

| | | | |
|:---|:---|:---|:---|
|  | **June 30, 2025**  | **June 30, 2025**  | **June 30, 2025**  |
|  | **Cost** | **Accumulated depreciation** | **Net Book Value** |
| &nbsp;&nbsp; Computers | $116169 | $72796 | $43373 |
| &nbsp;&nbsp; Furniture and Fixtures | 16550 | 11015 | 5535 |
| &nbsp;&nbsp; Office Equipment | 126413 | 45540 | 80873 |
| &nbsp;&nbsp; Leasehold improvements | 17577 | 9135 | 8442 |
|  | $276709 | $138486 | $138223 |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **December 31, 2024**  | **December 31, 2024**  | **December 31, 2024**  |
|  | **Cost** | **Accumulated depreciation** | **Net Book Value** |
| &nbsp;&nbsp; Computers | $102507 | $71929 | $30578 |
| &nbsp;&nbsp; Furniture and Fixtures | 28786 | 12753 | 16033 |
| &nbsp;&nbsp; Office Equipment | 112111 | 19495 | 92616 |
| &nbsp;&nbsp; Leasehold improvements | 12643 | 8064 | 4579 |
|  | $256047 | $112241 | $143806 |

---

Depreciation expense for the six months ended June 30, 2025 and 2024 was $25,774 and $33,014, respectively. Depreciation expense for the three months ended June 30, 2025 and 2024 was $12,913 and $17,447, respectively.

 **Note 7 - Intangible Assets, Net and Goodwill**

The carrying values of amortizable intangible assets are summarized as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** |
|  | **Gross Carrying Amount** | **Accumulated depreciation** | **Net Book Value** |
| &nbsp;&nbsp; Trade name | $200000 | $30000 | $170000 |
| &nbsp;&nbsp; Developed technology | 650000 | 243752 | 406248 |
| &nbsp;&nbsp; Customer relationships | 50000 | 18750 | 31250 |
|  | $900000 | $292502 | $607498 |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  | **Gross Carrying Amount** | **Accumulated depreciation** | **Net Book Value** |
| &nbsp;&nbsp; Trade name | $200000 | $30000 | $180000 |
| &nbsp;&nbsp; Developed technology | 650000 | 162500 | 487500 |
| &nbsp;&nbsp; Customer relationships | 50000 | 12500 | 37500 |
|  | $900000 | $195000 | $705000 |

---

Amortization expense related to intangible assets for the six months ended June 30, 2025 and 2024 was $97,502 and $97,500, respectively. Amortization expense related to intangible assets for the three months ended June 30, 2025 and 2024 was $48,751 and $48,750, respectively.

The Company's goodwill balance was $1.2 million as of June 30, 2025 and December 31, 2024. There were no impairment charges related to goodwill for the six and three months ended June 30, 2025 or 2024.

 **Note 8 - Related-Party Transactions**

From time to time, the Company enters into transactions with its affiliates that are considered to be related-party transactions. As of June 30, 2025 and December 31, 2024, the balances with such affiliates were included in the condensed consolidated balance sheets as due from related parties.

For the six months ended June 30, 2025 and 2024 the Company paid expenses of $23,836 and $103,544, respectively, on behalf of FAVO Holdings LLC. For the three months ended June 30, 2025 and 2024 the Company paid expenses of $7,718 and $100,407, respectively, on behalf of FAVO Holdings LLC. These amounts were classified as due from related parties in the consolidated balance sheet, the outstanding balances as of June 30, 2025 and December 31, 2024 from Favo Holding LLC was $13,098 and $15,418, respectively.

For the six months ended June 30, 2025 and 2024 the Company incurred costs of $510,000 and $510,000, respectively, under the management agreement between FAVO Holdings LLC and the Company. For the three months ended June 30, 2025 and 2024 the Company incurred costs of $255,000 and $255,000, respectively, under the management agreement between FAVO Holdings LLC and the Company. There are no outstanding balances due to Favo Holding LLC as of June 30, 2025 and December 31, 2024. Favo Holding LLC is owned by members Vincent Napolitano, CEO of the Company and Mr. Shaun Quin, President and Director of the Company.

The Company issued $4,700,000 of senior secured notes to FAVO Holdings LLC to finance the FAVO Group acquisition in 2023. The outstanding balance on this note as of June 30, 2025 and December 31, 2024 was $1,600,000 and $3,200,000, respectively.

The Company issued 15,000,000 shares of common stock to Stewards Investment Capital Limited in July 2023 to serve on the advisory board for a period of 3 years term as per the advisory board agreement. The Company recorded the issuance of shares as stock subscription receivable at the time of issuance, as services are not yet rendered. The Company amortizes the stock subscription receivable over the 3 years term on a straight-line basis. For the six months ended June 30, 2025 and 2024, the Company amortized an amount of $625,002 each from stock subscription receivable. For the three months ended June 30, 2025 and 2024, the Company amortized an amount of $312,501 each from stock subscription receivable.

 **Note 9 - Notes Payable** 

From time to time, the Company enters into secured promissory note agreements with various parties. The proceeds from these arrangements are used primarily to support the Company's short-term trade finance operations and general working capital needs. These notes are typically secured by specific assets of the Company, as outlined in the respective agreements. The terms and conditions of each note may vary depending on the nature of the transaction and the counterparties involved.

As of June 30, 2025 and December 31, 2024, the total outstanding note payable was $34,391,767 and $32,229,267, respectively, which is net of unamortized debt issuance costs associated with the note amounting to $71,875 and $109,375, respectively.

Future minimum principal payments as at June 30, 2025 are as follows:

---

| | |
|:---|:---|
| 2025 | $— |
| 2026.0 | 33391767 |
| 2027.0 |  |
| 2028.0 | 1000000 |
|  | $34391767 |

---

 **Note 10 - Commitments and Contingencies**

 ***Legal Proceedings***

During the normal course of business, the Company may be exposed to litigation. When the Company becomes aware of potential litigation, it evaluates the merits of the case in accordance with ASC 450-20-50, *Contingencies*. The Company evaluates its exposure to the matter, possible legal or settlement strategies, and the likelihood of an unfavorable outcome. If the Company determines that an unfavorable outcome is probable and can be reasonably estimated, it establishes the necessary accruals.

  ****

 ***Operating Leases***

On November 25, 2020, the Company entered into an office lease agreement with AM Property Holding II Corp, the agent for 1025 II, LLC. The Company moved into Suite 311 on the third floor of the building located at 1025 Old Country Road, Westbury, New York. On September 15, 2021, the Company ended the aforementioned lease agreement and entered into a new lease agreement with the existing landlord and into Suite 421 on the fourth floor of the same building. The lease accrues interest based on a weighted-average interest rate of 5.52% and a weighted-average lease term of 72 months.

On January 2, 2024, the Company acquired two leases as part of the Simplified Companies acquisition. Each lease was recognized and measured at fair value based on the remaining lease term at the date of acquisition by applying ASC 842, *Leases*. The office spaces for these leases are located in Lauderhill, Florida and Bonao, Dominican Republic.

In 2024, the Company added a second call center location in Le Vega, Dominican Republic.

The Company recorded operating lease expenses of $85,917 and $91,832 for the six months ended June 30, 2025 and 2024, respectively. The Company recorded operating lease expenses of $40,917 and $49,383 for the three months ended June 30, 2025 and 2024, respectively.

As of June 30, 2025, the following table reconciles the undiscounted cash flows for the following years and total of the remaining years to the operating lease obligation recorded in the condensed consolidated balance sheets, the future minimum annual lease payments under the operating leases were as follows:

---

| | |
|:---|:---|
| Remainder of 2025 | $77823 |
| 2026 | 145116 |
| 2027 | 86554 |
| Total future lease payments | $309493 |
| Less: Interest | (17471) |
| Present value of lease liabilities | $292022 |

---

The weighted-average remaining lease term and discount rate related to the Company's operating lease liabilities as of June 30, 2025 are 2.09 years and 5.52%, respectively.

 **Note 11 - Net Loss Per Share Attributable to Common Stockholders**

Because the Company was in a net loss position for the six months ended and three months ended June 30, 2025, basic net loss per share is the same as diluted net loss per share as the inclusion of all potential common shares outstanding would have been anti-dilutive.

The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Three Months Ended** | **For the Three Months Ended** | **For the Six Months Ended** | **For the Six Months Ended** |
|  | **June 30, 2025** | **June 30, 2024** | **June 30, 2025** | **June 30, 2024** |
| **Numerator:** | | | | |
| &nbsp;&nbsp;&nbsp;&nbsp; **Net Loss, to common stockholders** | $(2419583) | $(2185496) | $(4331738) | $(4393274) |
| &nbsp;&nbsp; **Denominator:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; **Weighted average shares of common stock outstanding, basic and diluted** | 112638745 | 92877536 | 106508850 | 91136916 |
| &nbsp;&nbsp;&nbsp;&nbsp; **Net loss per share, basic and diluted** | $(0.02) | $(0.02) | $(0.04) | $(0.05) |

---

The financial instruments that could potentially dilute basic earnings per share in the future and that have been excluded from the computation of diluted net loss per share (because including them would have had an anti-dilutive effect) were as follows:

---

| | | |
|:---|:---|:---|
|  | **June 30, 2025** | **June 30, 2024** |
| Convertible preferred stock | 69020000 | 47170000 |
| Common stock warrants | 8400000 |  |
| Total | 77420000 | 47170000 |

---

 **Note 12 - Income Taxes** 

We did not record an income tax provision for the six months ended June 30, 2025 and 2024. We maintain a 100% valuation allowance on total deferred tax assets. Management believes it is more likely than not that the related deferred tax asset will not be realized. As a result, the Company's effective tax rate will remain at 0% because there are no estimated or discrete items that would affect the tax provision.

 **Note 13 - Stockholders' Equity**

 ***Common Stock***

As of June 30, 2025, the Company has 500,000,000 shares of common stock authorized and 118,629,734 shares of common stock issued and outstanding. The remaining authorized shares of common stock are available for purposes of satisfying the conversion of preferred stock and the exercise and future grant of common stock options, warrants and restricted shares.

The Company completed the acquisition of the Simplified Companies on January 2, 2024 (refer Note 4). On February 28, 2025, the first tranche of deferred equity shares, consisting of 2,000,000 common stock, was issued to Robinpaws LLC as part of the purchase consideration for the business acquisition.

On May 9, 2025, pursuant to Certificate of Designation for the Series C Preferred Stock, Mr. Vincent Napolitano converted 18,750,000 Series C Preferred shares into 18,750,000 shares of common stock at par value $0.0001 of FAVO Capital Inc. On May 9, 2025, all outstanding shares of Series C preferred stock were converted on a one for one basis into common stock and distributed as follows; 1) VK Nap Family LLC, 10,359,375 shares 2) S&T Family Limited Partnership, 5,578,125 shares, and 3) Stewards Investment Capital, 2,812,500 shares.

On June 4, 2025, the Company issued 400,000 Common Units to various stockholders as registration delay payments based on the Registration Rights Agreement entered into as part of the offering that occurred in December 2024. These Common Units were valued at $100,000 which has been recognized as expenses during the six months ended June 30, 2025.

  ****

 ***Common Stock Warrants***

As part of the Purchase Agreements dated September 9, 2024, the Company issued 8,000,000 common stock warrants on December 11, 2024 with a term of five years expiring December 11, 2029. These common stock warrants were determined to be equity-classified. As of June 30, 2025, all common stock warrants were outstanding and exercisable at $0.40 per share.

The aggregate fair value of the common stock warrants issued in 2024 was $1,087,831 and is recorded within stockholders' deficit on the condensed consolidated balance sheets.

On June 4, 2025, the Company issued 400,000 common stock warrants to various stockholders as registration delay payments based on the Registration Rights Agreement entered into as part of the offering that occurred in December 2024. These common stock warrants have same terms and conditions as per the Purchase Agreements

dated September 9, 2024. The aggregate fair value of the common stock warrants issued in 2025 was $51,148 and is recorded within stockholders' deficit on the condensed consolidated balance sheets. This amount has been recognized as expenses during the six months ended June 30, 2025.

The fair value of the common stock warrants was determined using Black-Scholes model, based on the following assumptions at the issuance date:

---

| | |
|:---|:---|
| &nbsp;&nbsp; Dividend Yield | 0% |
| &nbsp;&nbsp; Expected Volatility | 75% |
| &nbsp;&nbsp; Risk- free interest rate | 3.93% - 4.09% |
| &nbsp;&nbsp; Expected term | 4.5 - 5 Years |

---

  ****

  ****

 ***Series A Preferred Stock***

On May 8, 2025, the Company issued to Stewards International Funds PCC 32,000,000 shares of Series A preferred shares for a total investment of $8,000,000.

As of June 30, 2025 and December 31, 2024, the Company is authorized to issue 81,250,000 shares of Series A preferred stock, 69,020,000 and 37,020,000 shares of which were issued and outstanding respectively.

The following is a description of the material rights of the Company's Series A preferred stock:

 *Voting* - The holders of Series A preferred stock vote together with the holders of common stock and any other class or series of stock entitled to vote thereon as a single class on an as-converted basis.

 *Dividend* - Each holder shall be entitled to receive an annual dividend of six percent (6%) of the Stated Value times the number of Preferred Shares held by such holder payable on a quarterly basis beginning at the end of the Company's fiscal quarter following the original issue date. Dividends on the Preferred Shares are payable, at the Company's option, in (a) cash or (b) shares of the Company's common stock, or a combination thereof, and shall be non-cumulative.

 *Liquidation Preference* - Holders of Series A preferred stock are entitled to a liquidation preference of $0.25 per share, the Stated Value of the newly created preferred stock, over the Company's common stock and Series C preferred stock in the event of a dissolution, liquidation or winding up of the Company.

 *Conversion Rights* - After twenty-four months, each share of Series A Preferred Stock may be converted into shares of common stock, the number of which is determined according to the following formula, subject to adjustments for stock splits, stock dividends, recapitalizations, reorganizations, reclassifications, combinations, subdivisions or other similar events: Conversion Amount ($0.25) / Conversion Price ($0.25).

In connection with any conversion, each holder of Series A Preferred Stock is subject to a beneficial ownership limitation of 9.99% of our outstanding common stock

 *Redemption* - The Company may, in its sole discretion, elect to redeem all or a portion of the outstanding Preferred Shares at the Redemption Amount. As used herein, the term "Redemption Amount" shall equal the Stated Value. If the Company does not redeem all of the outstanding Preferred Shares, but instead opts for a partial redemption, it must be done in at least $250,000 increments, and for every $250,000 redeemed, the Company will issue to the holder a warrant to purchase 1,000,000 shares of the Company's common stock at an exercise price of $0.25 per share.

  ****

 ***Series C Preferred Stock***

On May 9, 2025, pursuant to Certificate of Designation for the Series C Preferred Stock, Mr. Vincent Napolitano converted 18,750,000 Series C Preferred shares into 18,750,000 shares of common stock at par value $0.0001 of FAVO Capital Inc.

As of June 30, 2025, no Series C preferred stocks were outstanding. As of December 31, 2024, the Company is authorized to issue 18,750,000 shares of Series C preferred stock, all of which remained issued and outstanding.

The following is a description of the material rights of the Company's Series C preferred stock:

 *Voting* - The Series C preferred stock shall vote on any matter that may, from time to time, be submitted to the Company's shareholders for a vote, on a 25-for-one basis. If the Company effects a stock split that either increases or decreases the number of shares of common stock outstanding and entitled to vote, the voting rights of the Series C preferred stock shall not be subject to adjustment unless specifically authorized.

 

 *Conversion* - The Series C 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 Company or any transfer agent for such stock, into such number of fully paid and non-assessable shares of common stock as is determined by dividing the Original Issue Price of the Series C preferred stock by the Series C Conversion Price applicable to such share, determined as hereafter provided, in effect on the date the certificate is surrendered for conversion.

Each share of Series C preferred stock shall automatically be converted into shares of common stock at the applicable Series C Conversion Price in effect for such share immediately upon the earlier of (i) except as provided below in Section 4(c), the Company's sale of its common stock in a public offering pursuant to a registration statement under the Securities Act of 1933, as amended; (ii) a liquidation, dissolution or winding up of the Company as defined in Section 2(c) above but subject to any liquidation preference required by Section 2(a) above; or (iii) the date specified by written consent or agreement of the holders of a majority of the then-outstanding shares of Series C preferred stock.

 *Dividend* - Subject to the rights of any existing series of preferred stock or to the rights of any series of preferred stock that may, from time to time hereafter, come into existence, the holders of shares of Series C preferred stock shall be entitled to receive non-cumulative dividends, out of any assets legally available therefor, upon any payment of any dividend (payable other than in common stock or other securities and rights convertible into, or entitling the holder thereof to receive, directly or indirectly, additional shares of common stock of the Company) on the common stock of the Company, as and if declared by the Board of Directors, as if the Series C preferred stock had been converted into common stock.

 *Liquidation Preference* - In the event of any liquidation, dissolution or winding up of the Company, either voluntary or involuntary, subject to the rights of any existing series of preferred stock or to the rights of any series of preferred stock that may, from time to time hereafter, come into existence, the holders of the Series C preferred stock shall be entitled to receive, prior and in preference to any distribution of any of the assets of the Company to the holders of common stock by reason of their ownership thereof, an amount per share equal to the price per share actually paid to the Company upon the initial issuance of the Series C preferred stock (each, the "the Original Issue Price") for each share of Series C preferred stock then held by them, plus declared but unpaid dividends. Unless the Company can establish a different Original Issue Price in connection with a particular sale of Series C preferred stock, the Original Issue Price shall be $0.0001 per share for the Series C preferred stock. If, upon the occurrence of any liquidation, dissolution or winding up of the Company, the assets and funds thus distributed among the holders of the Series C preferred stock shall be insufficient to permit the payment to such holders of the full aforesaid preferential amounts, then, subject to the rights of any existing series of preferred stock or to the rights of any series

of preferred stock that may, from time to time hereafter, come into existence, the entire assets and funds of the Company legally available for distribution shall be distributed ratably among the holders of the each series of preferred stock in proportion to the preferential amount each such holder is otherwise entitled to receive.

 **Note 14 - Segment Information**

The Company operates and manages its business as a single segment for the purposes of assessing performance and making operating decisions. The Company's chief executive officer, who is its chief operating decision maker ("CODM"), reviews its financial information on a consolidated basis for purposes of evaluating financial performance and allocating resources. The key performance measure used by the CODM to make key operating decisions is consolidated net loss, as reported in the condensed consolidated statement of operations and comprehensive loss. The measure of segment assets is total assets, as included in the condensed consolidated balance sheets. Refer to the condensed consolidated financial statements for other financial information regarding our single reportable segment.

The following table presents certain financial data for the Company's reportable segment, including significant segment expenses regularly provided to the CODM to assess the performance of the Company:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** | **Six Months Ended** | **Six Months Ended** |
|  | **June 30, 2025** | **June 30, 2024** | **June 30, 2025** | **June 30, 2024** |
| &nbsp;&nbsp; Revenue | $3315179 | $3398203 | $6680404 | $6452878 |
| &nbsp;&nbsp; Significant segment-level expenses: |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Cost of revenues | 722584 | 642592 | 1376405 | 1124985 |
| &nbsp;&nbsp;&nbsp; General and administrative expenses | 2158329 | 1908897 | 4181244 | 3654890 |
| &nbsp;&nbsp;&nbsp; Provision for bad debt expense | 481130 | 1182663 | 1047374 | 2562242 |
| &nbsp;&nbsp;&nbsp; Professional fees | 752996 | 612881 | 1327412 | 1147580 |
| &nbsp;&nbsp; Other segment expenses | 1619723 | 1236666 | 3079707 | 2356455 |
| &nbsp;&nbsp; **Net loss before income taxes** | $**(2419583)** | $**(2185496)** | $**(4331738)** | $**(4393274)** |

---

Other segment expenses consist of interest expenses and foreign exchange losses. These are disclosed in the condensed consolidated statements of operations and comprehensive loss.

 **Note 15 - Subsequent Events** 

Subsequent events have been evaluated through August 14, 2025, which is the date these condensed consolidated financial statements were available for issuance. We are not aware of any subsequent events that would require recognition or disclosure in the condensed consolidated financial statements except for the events discussed below.

 **Promissory Note**

On July 17, 2025, the Company entered into a revolving promissory note agreement with VK Nap Family, LLC for $1,500,000, promissory note bears interest at 12% per annum and has a one-year term. VK Nap Family LLC is owned by living trusts of Mr. Vincent Napolitano, CEO of the Company, and his wife Mrs. Kathleen Napolitano.

 **Series A Preferred Stock Issuance**

On July 14, 2025, the Company signed subscription agreements with Forfront Capital LLC to purchase 1,000,000 shares of Series A preferred shares for a total investment of $250,000.

On August 4, 2025, the Company signed subscription agreements with Stewards International Funds PCC to purchase 4,000,000 shares of Series A preferred shares for a total investment of $1,000,000.

 **Variable Interest Entity** 

Effective August 1, 2025, the Company transferred its 100% interest in FC Sub Fund LLC (the "VIE") to Forfront Capital LLC for a consideration of $1. The VIE was not previously consolidated by the Company, as the Company was not the primary beneficiary of the VIE. The Company is still continuing its involvement with the entity in the form of a 2% management fee arrangement for managing the VIE's assets.

 **Securities Purchase Agreement**

On September 9, 2024, the Company entered into a securities purchase agreement (the " Securities Purchase Agreement") with certain purchasers (the "Purchasers") for the purchase and sale of Company's securities. In an initial closing, the Company issued (i) 8,000,000 of the Common Units, each such Common Unit consisted of one share of the Company's common stock with a par value $0.0001 per share ("Common Stock"), common warrants ("Warrants") to purchase one Common Stock, for every one share of common stock purchased and a pre-funded warrant ("Pre-funded Warrant") to purchase 3/200<sup>th</sup> share of Common Stock purchased. Pursuant to the Purchase Agreement, the Common stock were sold at a purchase price of $0.25 per share, five-year Common warrants having exercise price of $0.40 per share and the Pre-funded warrants having exercise price of $0.0001 per share. The sale of the Units to the Purchasers closed on December 12, 2024 (the "initial closing Date"). The aggregate gross proceeds to the Company from the December 2024 Offering were approximately $2,000,000 before deducting placement agent fees and expenses and other transaction costs of $207,600.

In a second closing, the Company issued (i) 1,750,000 of the Common Units, each such Common Unit consisted of one share of the Company's common stock with a par value $0.0001 per share ("Common Stock"), common warrants ("Warrants") to purchase one Common Stock, for every one share of common stock purchased and a pre-funded warrant ("Pre-funded Warrant") to purchase 3/200<sup>th</sup> share of Common Stock purchased. Pursuant to the Purchase Agreement, the Common stock were sold at a purchase price of $0.25 per share, five-year Common warrants having exercise price of $0.40 per share and the Pre-funded warrants having exercise price of $0.0001 per share. The sale of the Units to the Purchasers closed on July 30, 2025 (the "Second closing date"). The aggregate gross proceeds to the Company from the July 2025 Offering were approximately $437,500, before deducting placement agent fees and expenses and other transaction costs of $51,350.

The Company issued an additional 5% in common stock and 5% in warrants to all participants of the offering for the first and second closing, in lieu of the Effectiveness Deadline extension to December 31, 2025.

 **Block 40 Entities Acquisition**

On July 11, 2025, the Company entered into membership interest purchase agreement with Block 40 Investment Holding LLC, Block 40 Managers, LLC and Hollywood Circle Capital LLC (together "Block 40 entities") for the acquisition of 100% of the equity interest of Block 40 entities by issuing common stock of 69,636,906 shares at $0.76 per share. The Company is in the process of determining the fair value of the assets acquired and liabilities assumed. The acquisition represents the Company's strategic expansion into the real estate sector.

In contemplation of the acquisition, on May 29, 2025, the Company signed an agreement with Block 40 Investment Holdings, LLC, to disburse an advance amount of $5,000,000. The Company disbursed the entire amount of $5,000,000 during the six months ended June 30, 2025. The advance bears interest at 15% per annum and has a one year term. As of June 30, 2025, the outstanding advance was $5,000,000. As of June 30, 2025, the advance interest receivable was $64,583.

Due to limited amount of time elapsed since the acquisition date, the initial accounting for the Block 40 entities acquisition is incomplete, the Company will provide amounts recognized as of July 11, 2025, the acquisition date, for assets acquired and liabilities assumed from the transaction in the Company's condensed consolidated financial statements for the period ended September 30, 2025.

 **Name Change**

On August 7, 2025, the Board of Directors of the Company approved a change in the name of the Company from Favo Capital Inc. to Stewards, Inc. The Company has yet to file the documentation for this name change with the State of Nevada but has initiated the process with FINRA. The name change will not be effective until FINRA provides a market effective date.

 **Reverse Stock Split**

On August 7, 2025, the Board of Directors approved a reverse stock split of the Company's issued and outstanding common stock at a ratio of not less than 1-for-2 and not greater than 1-for-100, subject to receipt of a market effective date from FINRA. The Company has yet to file the documentation for this reverse stock split with the State of Nevada but has initiated the process with FINRA. The reverse stock split will not be effective until FINRA provides a market effective date.

**FAVO CAPITAL, INC.**

**[\*] SHARES OF COMMON STOCK**

**_____________________**

**PROSPECTUS**

**_____________________**

[\*], 2025

YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR THAT WE HAVE REFERRED YOU TO. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT. THIS PROSPECTUS IS NOT AN OFFER TO SELL COMMON STOCK AND IS NOT SOLICITING AN OFFER TO BUY COMMON STOCK IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**D. Boral Capital**

**The information in this prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities, and it is not soliciting offers to buy these securities in any state where the offer or sale is not permitted.**

**PRELIMINARY PROSPECTUS**

**SUBJECT TO COMPLETION ON SEPTEMBER [\*], 2025**

**FAVO CAPITAL, INC.**

**Shares of Common Stock**

This prospectus relates to 20,621,250 shares of common stock that may be sold from time to time by the selling stockholders named in this prospectus.

Our common stock is currently quoted on the OTC Pink Market operated by OTC Markets Group Inc. under the symbol "FAVO." On September [\*], 2025, the closing price of our common stock on OTC Pink Market was $[\*] per share. In connection with this offering, we have applied to list our common stock on the Nasdaq Capital Market ("Nasdaq") under a symbol that more resembles our new name. No assurance can be given that our application will be approved or that the trading prices of our common stock on the OTC Pink market will be indicative of the prices of our common stock if our common stock were traded on the Nasdaq Capital Market.

No resales of the common stock covered by this prospectus shall occur until the closing of our primary offering. Once the primary offering is completed, the selling stockholders may sell their shares from time to time at the market price prevailing at the time of offer and sale, or at prices related to such prevailing market prices or in negotiated transactions or a combination of such methods. See "Plan of Distribution" for a more complete description of the ways in which the shares of common stock may be sold. We will not receive any proceeds from the sales of outstanding shares of common stock by the selling stockholders.

**Investing in our securities involves a high degree of risk. Before buying any securities, you should carefully read the discussion of the material risks of investing in our securities under the heading "Risk Factors" beginning on page 31 of this prospectus.**

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

The date of this prospectus is September [\*], 2025

**The Offering**

---

| | |
|:---|:---|
| Shares offered by the selling stockholders: | This prospectus relates to [\*] shares of common stock that may be sold from time to time by the selling stockholders named in this prospectus. |
| Shares to be outstanding after this offering (1): | [\*] shares of common stock (or [\*] shares if the underwriters exercise the over-allotment option in full). |
| Use of proceeds: | We will not receive any proceeds from the sales of outstanding shares by the selling stockholders. |
| Risk factors: | Investing in our common stock involves a high degree of risk. As an investor, you should be able to bear a complete loss of your investment. You should carefully consider the information set forth in the "Risk Factors" section beginning on page 31. |
| Trading market and symbol: | Our common stock is currently quoted on the OTC Pink Market under the symbol "FAVO." In connection with our public offering, we intend to apply for the listing of our common stock on Nasdaq under a symbol that more resembles our new name. The closing of the public offering is contingent upon our uplisting to Nasdaq. |

---

(1) The number of shares outstanding after this offering is based on [\*] shares of common stock outstanding on September [\*], 2025, but does not include:

• 20,000,000
 shares of our common stock that were reserved for equity awards under our Favo Capital, Inc. 2024 Equity Incentive Plan adopted on
 August 21, 2024;

• 10,237,500 shares
 issuable upon exercise of warrants, with an initial exercise price of $0.40 per share;

• 146,250 shares issuable
 upon exercise of prefunded warrants, with an initial exercise price of $0.0001 per share;

• 64,020,000 shares
 issuable upon conversion of our outstanding Series A Preferred Stock; and

• 10,000,000 shares
 issuable upon conversion of our outstanding Series B Preferred Stock.

Please see "Description of Capital Stock" for additional details regarding our outstanding convertible securities.

**USE OF PROCEEDS**

We will not receive any proceeds from the sale of common stock by the selling stockholders.

**SELLING STOCKHOLDERS**

The shares of common stock being offered by the selling stockholders are those restricted shares previously issued to the selling stockholders.

On September 9, 2024, the Company entered into a securities purchase agreement (the "Securities Purchase Agreement") with certain purchasers (the "Purchasers") for the purchase and sale of Company's securities. In an initial closing, the Company issued 8,000,000 of the Common Units, each such Common Unit consisted of one share of the Company's common stock with a par value $0.0001 per share ("Common Stock"), common warrants ("Warrants") to purchase one Common Stock, for every one share of common stock purchased and a pre-funded warrant ("Pre-funded Warrant") to purchase 3/200th share of Common Stock purchased. Pursuant to the Securities Purchase Agreement, the Common Units were sold at a purchase price of $0.25 per share, with five-year Warrants having exercise price of $0.40 per share and the Pre-funded Warrants having exercise price of $0.0001 per share.

The sale of the Units to the Purchasers closed on December 12, 2025. The aggregate gross proceeds to the Company from the December 2024 offering were approximately $2,000,000 before deducting placement agent fees and expenses and other transaction costs of $207,600.

In a second closing, the Company issued 1,750,000 of the Common Units. Pursuant to the Securities Purchase Agreement, the Common Units were sold at a purchase price of $0.25 per share, with five-year Warrants having exercise price of $0.40 per share and the Pre-funded Warrants having exercise price of $0.0001 per share. The sale of the Common Units to the Purchasers closed on July 30, 2025. The aggregate gross proceeds to the Company from the July 2025 offering were approximately $437,500, before deducting placement agent fees and expenses and other transaction costs of $51,350.

The Company issued an additional 5% in common stock and 5% in warrants to all participants of the offering for the first and second closing, in lieu of the effectiveness deadline extension to December 31, 2025. As a result, the Company issued 487,500 shares of common stock and warrants to purchase 487,500 shares of common stock to the investors.

The Company intends to use the net proceeds from the offering for general corporate purposes, servicing interest on debt, and expenses for uplisting to a national exchange.

In connection with the private placement, we signed a registration rights agreement to include the shares in a resale registration. We are registering the shares in order to permit the selling stockholders to offer the shares for resale from time to time. Except for the ownership of these shares and except as stated in the table below, the selling stockholders have not had any material relationship with us within the past three years and based on the information provided to us by the selling stockholders, no selling stockholder is a broker-dealer or an affiliate of a broker-dealer.

The table below lists the selling stockholders and other information regarding the ownership of the shares by each of the selling stockholders. The second column lists the number of shares owned by each selling stockholder. The third column lists the shares being offered by this prospectus by the selling stockholders. The fourth column assumes the sale of all of the shares offered by the selling stockholders pursuant to this prospectus.

Beneficial ownership is determined in accordance with SEC rules and generally includes voting or investment power with respect to securities. For purposes of this table, a person or group of persons is deemed to have "beneficial ownership" of any shares of common stock that such person or any member of such group has the right to acquire within sixty (60) days of September [\*], 2025. For purposes of computing the percentage of outstanding shares of our common stock held by each person or group of persons, any shares that such person or persons has the right to acquire within sixty (60) days are deemed to be outstanding for such person but not deemed to be outstanding for the purpose of computing the percentage ownership of any other person. Unless otherwise noted, each person or group identified possesses sole voting and investment power with respect to the shares, subject to community property laws where applicable.

The selling stockholders may sell all, some or none of their shares in this offering. See "Plan of Distribution."

---

| | | | | |
|:---|:---|:---|:---|:---|
| | | | **Common Stock Beneficially Owned After this Offering** | **Common Stock Beneficially Owned After this Offering** |
| <br>**Name of Selling Stockholder** | **Common Stock Beneficially Owned Prior to this**<br>**Offering** | **Number of Shares Being**<br>**Offered** | **Shares** | **Percent (1)** |
| MARGHERITA <br> CACIOPPO TRUST IRRV U/A DTD 03/08/2019(2) | 423000<br>| 423000<br>|  |  |
| ROBERT & MARY RIVIERE | 423000 | 423000 |  |  |
| JORDAN G NAYDENOV | 211500 | 211500 |  |  |
| WILLIAM BATZER | 211500 | 211500 |  |  |
| JOHN M RANEY | 846000 | 846000 |  |  |
| DARREN BRUNGARDT | 211500 | 211500 |  |  |
| RICHARD JAFFE | 423000 | 423000 |  |  |
| BRIAN ESKIN | 211500 | 211500 |  |  |
| JAMES & NIDA GODFREY | 211500 | 211500 |  |  |
| THE LOVELY LIVING TRUST DTD 4/1/16(3) | 211500 | 211500 |  |  |
| RICHARD & FRANCES BATZER | 211500 | 211500 |  |  |
| RICHARD & WILLIAM BATZER | 211500 | 211500 |  |  |
| SHB EQUITIES LLC (4) | 211500 | 211500 |  |  |
| PULLIAM TRUST (5) | 211500 | 211500 |  |  |
| RONALD CHUPP | 211500 | 211500 |  |  |
| DANIEL L KOONS & MARGARET KOONS | 423000 | 423000 |  |  |
| DANIEL B KOONS & KIMBERLY A WROBEL | 211500 | 211500 |  |  |
| JEFFREY A NIEZGODA | 423000 | 423000 |  |  |
| GLEN SCHNEIDER | 846000 | 846000 |  |  |
| DANIEL L <br> PASSACANTILLI | 211500 | 211500 |  |  |
| JAMES C GUMINA | 211500 | 211500 |  |  |
| MATTHEW J EAMES | 211500 | 211500 |  |  |
| JOHN DARGER | 211500 | 211500 |  |  |
| FORFRONT CAPITAL, LLC (6) | 8460000 | 8460000 |  |  |
| IVAN CAPLAN | 846000 | 846000 |  |  |
| HERBERT FAMILY <br> TRUST DTD 07/05/2023(7) | 105750 | 105750 |  |  |
| PETER V HOUMERE & SARAH W HOUMERE | 211500 | 211500 |  |  |
| BARRY KERN | 211500 | 211500 |  |  |
| DANIEL B. KOONS | 211500 | 211500 |  |  |
| Barger Excavating, Inc.(8) | 211500 | 211500 |  |  |
| DANIEL HIGGINS | 211500 | 211500 |  |  |
| Greg John & Evelyn Ellen FRANKLIN | 211500 | 211500 |  |  |
| HOWARD & Jonathan HOWELL | 423000 | 423000 |  |  |
| JAY ROBERT Ricigliano | 105750 | 105750 |  |  |
| JOSEPH & Yulia Moriarty | 105750 | 105750 |  |  |
| MATTHEW DIMICCO | 634500 | 634500 |  |  |
| STEPHEN CARMEL Living Trust DTD 9/25/20(9) | 211500 | 211500 |  |  |
| Stewards Investment Capital Limited (10) | 16269000 | 1269000 |  |  |
| Total | 35621250 | 20621250 |  |  |

---

(1) Applicable percentage ownership after this offering is based on [\*] shares of common stock outstanding after the public offering. As noted above, for purposes of computing percentage ownership after this offering, we have assumed that all shares offered by the selling stockholders will be sold in this offering.

(2) Antonio Cacioppo is the trustee and has voting and dispositive authority over these shares.

(3) Douglas V. Lovely is the trustee and has voting and dispositive authority over these shares.

(4) Henry Bergmann has voting and dispositive authority over these shares.

(5) Gary P. Pulliam and Darlene A. Pulliam have voting and dispositive authority over these shares.

(6) Forfront Capital, LLC
 is an affiliate shareholder. Glen Steward, our director, along with Nathaniel Tsang Mang Kin and Bilal Adam, have voting and dispositive
 authority over these shares. While these shares are included in the selling shareholder table in accordance with SEC requirements,
 the inclusion does not reflect an immediate intention to dispose of such shares. Any sales, if undertaken, are expected to occur
 gradually over time and in a manner consistent with long-term alignment of interests with the Company.

(7) Hal C. Herbert
 is the trustee and has voting and dispositive authority over these shares.

(8) Nicholas Barger has voting and dispositive authority over these shares.

(9) Stephen Carmel is the trustee and has voting and dispositive authority over these shares.

(10) Stewards Investment
 Capital Limited and Stewards International Funds PCC, on behalf of the Stewards Private Credit Fund, are affiliate shareholders.
 Glen Steward, our director, and Bilal Adam have voting and dispositive authority over these shares. As with other affiliates, the
 shares are reflected in the selling shareholder table for disclosure purposes, but there is no current plan to sell them immediately
 upon uplisting to Nasdaq. Any future sales would likely take place over an extended period, underscoring the ongoing commitment of
 these shareholders to the Company's long-term growth and performance.

**PLAN OF DISTRIBUTION**

We are registering the shares of common stock to permit the resale of these shares of common stock by the selling stockholders and any of their transferees, pledgees, assignees, donees, and successors-in-interest from time to time after the date of this prospectus.

Our common stock is currently quoted on the OTC Pink Market. We intend to apply for the listing of our common stock on Nasdaq in connection with our public offering and the closing of such public offering is contingent upon our uplisting to Nasdaq. The common stock may be sold by selling stockholders in one or more transactions at prevailing market prices at the time of the sale. However, the selling stockholders will not sell any common stock until after the closing of the primary offering. Once the primary offering is completed, the selling stockholders may sell their shares from time to time at the market price prevailing at the time of offer and sale, or at prices related to such prevailing market prices or in negotiated transactions or a combination of such methods.

A selling stockholder may use any one or more of the following methods when selling the securities:

• ordinary brokerage
 transactions and transactions in which the broker-dealer solicits purchasers;

• block trades
 in which the broker-dealer will attempt to sell the securities as agent but may position and resell a portion of the block as principal
 to facilitate the transaction;

• purchases by
 a broker-dealer as principal and resale by the broker-dealer for its account;

• an exchange
 distribution in accordance with the rules of the applicable exchange;

• privately negotiated
 transactions;

• settlement
 of short sales;

• in transactions
 through broker-dealers that agree with the selling stockholders to sell a specified number of such securities at a stipulated price
 per security;

• through the
 writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;

• a combination
 of any such methods of sale; or

• any other method
 permitted pursuant to applicable law.

The selling stockholders may also sell shares under Rule 144 of the Securities Act, if available, rather than under this prospectus. The selling stockholders shall have the sole and absolute discretion not to accept any purchase offer or make any sale of shares if it deems the purchase price to be unsatisfactory at any particular time.

The selling stockholders or their respective pledgees, donees, transferees or other successors in interest, may also sell the shares directly to market makers acting as principals and/or broker-dealers acting as agents for themselves or their customers. Such broker-dealers may receive compensation in the form of discounts, concessions or commissions from the selling stockholders and/or the purchasers of shares for whom such broker-dealers may act as agents or to whom they sell as principal or both, which compensation as to a particular broker-dealer might be in excess of customary commissions. Market makers and block purchasers purchasing the shares will do so for their own account and at their own risk. It is possible that a selling stockholder will attempt to sell shares in block transactions to market makers or other purchasers at a price per share which may be below the then existing market price. We cannot assure you that all or any of the shares offered in this prospectus will be issued to, or sold by, the selling stockholders. The selling stockholders and any brokers, dealers or agents, upon effecting the sale of any of the shares offered in this prospectus, may be deemed to be "underwriters" as that term is defined under the Securities Act, the Exchange Act and the rules and regulations of such acts. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act.

We are required to pay all fees and expenses incident to the registration of the shares, including fees and disbursements of counsel to the selling stockholders, but excluding brokerage commissions or underwriter discounts.

The selling stockholders, alternatively, may sell all or any part of the shares offered in this prospectus through an underwriter. The selling stockholders have not entered into any agreement with a prospective underwriter and there is no assurance that any such agreement will be entered into.

The selling stockholders may pledge their shares to their brokers under the margin provisions of customer agreements. If a selling stockholder defaults on a margin loan, the broker may, from time to time, offer and sell the pledged shares. The selling stockholders and any other persons participating in the sale or distribution of the shares will be subject to applicable provisions of the Exchange Act, and the rules and regulations under such act, including, without limitation, Regulation M. These provisions may restrict certain activities of and limit the timing of purchases and sales of any of the shares by, the selling stockholders or any other such person. In the event that any of the selling stockholders are deemed an affiliated purchaser or distribution participant within the meaning of Regulation M, then the selling stockholders will not be permitted to engage in short sales of common stock. Furthermore, under Regulation M, persons engaged in a distribution of securities are prohibited from simultaneously engaging in market making and certain other activities with respect to such securities for a specified period of time prior to the commencement of such distributions, subject to specified exceptions or exemptions. In addition, if a short sale is deemed to be a stabilizing activity, then the selling stockholders will not be permitted to engage in a short sale of our common stock. All of these limitations may affect the marketability of our common stock.

If a selling stockholder notifies us that it has a material arrangement with a broker-dealer for the resale of the shares, then we would be required to amend the registration statement of which this prospectus is a part and file a prospectus supplement to describe the agreements between the selling stockholder and the broker-dealer.

**LEGAL MATTERS**

The validity of the common stock covered by this prospectus will be passed upon by The Doney Law Firm.

**PART II INFORMATION NOT REQUIRED IN THE PROSPECTUS**

**Item 13. Other Expenses of Issuance and Distribution**

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| | |
|:---|:---|
| Securities and Exchange Commission Registration Fee | $|
| Transfer Agent Fees\* | $|
| Accounting fees and expenses\* | $|
| Legal fees and expenses\* | $|
| Blue Sky fees and expenses\* | $|
| Total\* | $|

---

\* Estimated

**Item 14. Indemnification of Directors and Officers.**

The Nevada Revised Statutes limits or eliminates the personal liability of directors to corporations and their stockholders for monetary damages for breaches of directors' fiduciary duties as directors. Our bylaws include provisions that require the company to indemnify our directors or officers against monetary damages for actions taken as a director or officer of our Company. We are also expressly authorized to carry directors' and officers' insurance to protect our directors, officers, employees and agents for certain liabilities. Our articles of incorporation do not contain any limiting language regarding director immunity from liability.

The limitation of liability and indemnification provisions under the Nevada Revised Statutes and our bylaws may discourage stockholders from bringing a lawsuit against directors for breach of their fiduciary duties. These provisions may also have the effect of reducing the likelihood of derivative litigation against directors and officers, even though such an action, if successful, might otherwise benefit us and our stockholders. However, these provisions do not limit or eliminate our rights, or those of any stockholder, to seek non-monetary relief such as injunction or rescission in the event of a breach of a director's fiduciary duties. Moreover, the provisions do not alter the liability of directors under the federal securities laws. In addition, your investment may be adversely affected to the extent that, in a class action or direct suit, we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions.

With regard to the foregoing provisions, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act of 1933, as amended, and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by us of expenses incurred or paid by a director, officer or controlling person of the Corporation in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the common shares being registered, we will, unless in the opinion of our counsel the matter has been settled by a controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by us is against public policy as expressed in the Securities Act of 1933, as amended, and will be governed by the final adjudication of such case.

**Item 15. Recent Sales of Unregistered Securities.**

For the past three years, the Company has engaged in the following equity events:

On March 8, 2021, the Company authorized the issuance of 800,000 restricted shares of Common Stock to Richard Dubi and Liro Holdings, controlled by Rocco Trotta for services valued at $336,000 or $0.42 per share.

On June 30, 2021, the Company authorized the issuance of 750,000 restricted shares of Common Stock to Richard Dubi and Liro Holdings, controlled by Rocco Trotta for services valued at $315,000 or $0.42 per share.

On August 5, 2021, the holder of the August 8, 2020, convertible note in the amount of $110,000, elected to convert their entire note into 218,916 shares of common stock.

On October 15, 2021, the Company issued 50,000 shares of common stock to a consultant (Jospeh Manopella) for services valued at $31,500.

On October 25, 2021, the Company issued 100,000 shares of common stock to a consultant (James Fellus) for services valued at $63,000.

On May 6, 2022, the Company issued 500,000 shares of common stock to consultants (Christopher Snead) for services valued at $250,000.

On July 13, 2022, the Company issued 100,000 shares of common stock to a consultant (Tania Fellus) for services valued at $50,000.

On that same date, the Company issued another 100,000 shares of common stock to a consultant (Bryan Dumas) for services valued at $50,000.

On September 13, 2022, the Company issued 250,000 shares of common stock to a consultant (Phyllis Ann Francis) for services valued at $87,500.

On May 31, 2023, pursuant to Certificate of Designation for the Series C Preferred Stock, Mr. Vincent Napolitano converted 6,250,000 Series C Preferred shares into 25,000,000 common shares at par value $0.0001 of FAVO Capital Inc.

On May 31, 2023, the holder of the Series C Preferred Stock mutually agreed with Shaun Quin, current President and Glen Steward, current Chief Strategy Officer and as per the Master Acquisition Agreement, that upon the filing of the S-1 Registration and the public sale of the company's common shares, that the Series C Preferred Shares will be redeemed and converted to common stock and split pro-rata amongst these Directors. The pro-rata split was agreed as such. Vincent Napolitano will hold 55.25% ownership; Shaun Quin will hold 29.75% ownership, and Glen Steward will hold 15% ownership of the converted Series C Preferred Stock to common shares of the company, which can be held in their personal names or transferred to an entity of their choosing.

Therefore, increasing the shareholding of Vincent Napolitano by 10,359,375 shares of common stock, Shaun Quin, through his nominated entity S & T Quin Family Limited Partnership by 5,578,125 shares of common stock and Glen Steward, through his nominated entity Stewards Investment Capital by 2,812,500 shares of common stock.

On June 7, 2023, the Company filed with the Secretary of State of the State of Nevada a Certificate of Amendment to the Articles of Incorporation to increase the authorized shares of Preferred Stock of the Company. The amendment increased the authorized shares of Preferred Stock the Company may issue from 25,000,000 shares to 50,000,000 shares of Preferred Stock, par value $0.0001 per share. The Amendment did not increase the Company's authorized shares of Common Stock, which remained at 500,000,000 shares, par value $0.0001 per share.

On July 1, 2023, the Company issued 1,600,000 shares of common stock to a consultant (Liro Holdings/Rocco Trotta) for services valued at $400,000.

On July 7, 2023, the Company issued 15,000,000 shares of common stock to a consultant (Stewards Investment Capital (Glen Steward)) for services valued at $3,750,000.

On July 7, 2023, the Company issued 400,000 shares of common stock to another consultant (Gennaro Trotta) for services valued at $100,000.

On July 7, 2023, the Company issued another 20,000,000 shares of common stock to Favo Holdings, LLC (Vincent Napolitano and Shaun Quin) in accordance with the FAVO Group Acquisition. On the same date, the Company also issued a further 2,400,000 shares to LIRO Holdings LCC in lieu of the promissory note extension.

On November 27, 2023, the Company filed with the Secretary of State of the State of Nevada a Certificate of Amendment to the Articles of Incorporation to increase the authorized shares of Preferred Stock of the Company. The amendment increased the authorized shares of Preferred Stock the Company may issue from 50,000,000 shares to 100,000,000 shares of Preferred Stock, par value $0.0001 per share. The Amendment did not increase the Company's authorized shares of Common Stock, which remained at 500,000,000 shares, par value $0.0001 per share.

On November 29, 2023, the Company filed with the Secretary of State of the State of Nevada a Certificate of Amendment to the Certificate of Designation for the Series C Preferred Stock to decrease its authorized shares of Series C preferred shares from 25,000,000 shares down to 18,750,000 shares.

On November 29, 2023, the Company we filed with the Secretary of State of the State of Nevada a Certificate of Amendment to the Certificate of Designation for the Series A Preferred Stock to increase its authorized shares of Series A preferred shares from 20,000,000 shares to 81,250,000 shares.

On December 5, 2023, the Company issued 200,000 shares of common stock to a third party (Earnest P. Hart) for services valued at $50,000.

From June 30, 2023, to December 5, 2023, the Company issued 28,420,000 shares of Series A Preferred stock to Forfront Capital, LLC in accordance with the FAVO Group acquisition.

On January 1, 2024, the Company issued 1,000,000 shares of common stock to a third party (Robin Paws) for the Simplified acquisition valued at $250,000.

On February 28, 2024, the Company issued 125,000 shares of common stock to a third party (Sebastian Darmodihardjo) for services valued at $31,250.

On April 19, 2024, the Company issued 600,000 shares of common stock to an investor (Liro Holdings (Rocco Trotta)) for shares valued at $150,000.

On June 18, 2024 the Company issued 600,000 shares of Series A Preferred stock to Forfront Capital, LLC as per the signed subscription agreement.

As of June 30, 2024, and December 31, 2023, 89,279,734 and 87,554,734 shares of common stock with par value of $0.0001 remains outstanding, respectively.

On July 24, 2024, the Company issued 200,000 shares to a third party (Earnest P. Hart)for services valued at $50,000.

On October 18, 2024 the Company issued 5,000,000 shares of Series A Preferred stock to Forfront Capital, LLC as per the signed subscription agreement.

On October 21, 2024 the Company issued 3,000,000 shares of Series A Preferred stock to Forfront Capital, LLC as per the signed subscription agreement.

On September 9, 2024, the Company entered into a securities purchase agreement (the "Securities Purchase Agreement") with certain purchasers (the "Purchasers") for the purchase and sale of Company's securities. In an initial closing, the Company issued 8,000,000 of the Common Units, each such Common Unit consisted of one share of the Company's common stock with a par value $0.0001 per share ("Common Stock"), common warrants ("Warrants") to purchase one Common Stock, for every one share of common stock purchased and a pre-funded warrant ("Pre-funded Warrant") to purchase 3/200th share of Common Stock purchased. Pursuant to the Securities Purchase Agreement, the Common Units were sold at a purchase price of $0.25 per share, with five-year Warrants having exercise price of $0.40 per share and the Pre-funded Warrants having exercise price of $0.0001 per share.

The sale of the Units to the Purchasers closed on December 12, 2025. The aggregate gross proceeds to the Company from the December 2024 offering were approximately $2,000,000 before deducting placement agent fees and expenses and other transaction costs of $207,600.

In a second closing, the Company issued 1,750,000 of the Common Units. Pursuant to the Securities Purchase Agreement, the Common Units were sold at a purchase price of $0.25 per share, with five-year Warrants having exercise price of $0.40 per share and the Pre-funded Warrants having exercise price of $0.0001 per share. The sale of the Common Units to the Purchasers closed on July 30, 2025. The aggregate gross proceeds to the Company from the July 2025 offering were approximately $437,500, before deducting placement agent fees and expenses and other transaction costs of $51,350.

The Company issued an additional 5% in common stock and 5% in warrants to all participants of the offering for the first and second closing, in lieu of the effectiveness deadline extension to December 31, 2025. As a result, the Company issued 487,500 shares of common stock and warrants to purchase 487,500 shares of common stock to the investors.

On May 8, 2025, the Company signed subscription agreements with Stewards International Funds PCC to purchase 32,000,000 shares of Series A preferred shares for a total investment of $8,000,000.

On May 9, 2025, pursuant to Certificate of Designation for the Series C Preferred Stock, Mr. Vincent Napolitano converted 18,750,000 Series C Preferred shares into 18,750,000 shares of common stock at par value $0.0001 of FAVO Capital Inc. On May 9, 2025, all outstanding shares of Series C preferred stock were converted on a one for one basis into common stock and distributed as follows; 1) VK Nap Family LLC, 10,359,375 shares 2) S&T Family Limited Partnership, 5,578,125 shares, and 3) Stewards Investment Capital, 2,812,500 shares.

On July 11, 2025, the Company entered into membership interest purchase agreement with Block 40 Investment Holding LLC, Block 40 Managers, LLC and Hollywood Circle Capital LLC (together "Block 40 entities") for the acquisition of 100% of the equity interest of Block 40 entities by issuing common stock of 69,636,906 shares at $0.76 per share.

On July 14, 2025, the Company signed subscription agreements with Forfront Capital LLC to purchase 1,000,000 shares of Series A preferred shares for a total investment of $250,000.

On August 4, 2025, the Company signed subscription agreements with Stewards International Funds PCC to purchase 4,000,000 shares of Series A preferred shares for a total investment of $1,000,000.

The securities described above were issued pursuant to the Favo Capital, Inc. 2024 Incentive Plan or in reliance upon the exemption from the registration requirements of the Securities Act, as set forth in Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder relative to transactions by an issuer not involving any public offering, to the extent an exemption from such registration was required. The recipients of the securities in the transactions described above acquired the securities for their own account for investment purposes only and not with a view to, or for sale in connection with, any distribution thereof. Appropriate legends were affixed to the instruments representing such securities issued in such transactions.

**Item 16. Exhibits and Financial Statement Schedules.**

**EXHIBIT INDEX**

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Exhibit #** | **Exhibit Description** | **Incorporated by Reference Form** | **Date Filed** | **Exhibit #** | **To Be Filed By Amendment** | **File or Furnished Herewith** |
| 1.1 | [Form of Underwriting Agreement](ex1_1.htm) |  |  |  |  | X |
| 2.1 | [Membership Interest Purchase Agreement, dated May 30, 2023, with FAVO Funding CA LLC](ex2_1.htm) |  |  |  |  | X |
| 2.2 | [Membership Interest Purchase Agreement, dated May 30, 2023, with FAVO Funding LLC](ex2_2.htm) |  |  |  |  | X |
| 2.3 | [Membership Interest Purchase Agreement, dated May 30, 2023, with FAVO Group Human Resources LLC](ex2_3.htm) |  |  |  |  | X |
| 2.4 | [Membership Interest Purchase Agreement, dated May 30, 2023, with FAVO Group LLC](ex2_4.htm) |  |  |  |  | X |
| 2.5 | [Membership Interest Purchase Agreement, dated May 30, 2023, with FORE Funding CA LLC](ex2_5.htm) |  |  |  |  | X |
| 2.6 | [Membership Interest Purchase Agreement, dated May 30, 2023, with FORE Funding LLC](ex2_6.htm) |  |  |  |  | X |
| 2.7 | [Membership Interest Purchase Agreement, dated May 30, 2023, with Honeycomb Sub Fund LLC](ex2_7.htm) |  |  |  |  | X |
| 2.8 | [Asset Purchase Agreement, dated December 2023](ex2_8.htm) |  |  |  |  | X |
| 2.9 | [Membership Interest Purchase Agreement, dated July 11, 2025, with Block 40 Managers, LLC](ex2_9.htm) |  |  |  |  | X |
| 2.10 | [Membership Interest Purchase Agreement, dated July 11, 2025, with Block 40 Investments Holdings, LLC](ex2_10.htm) |  |  |  |  | X |
| 2.11 | [Membership Interest Purchase Agreement, dated July 11, 2025, with Hollywood Circle Capital LLC](ex2_11.htm) |  |  |  |  | X |
| 3.1 | [Amended and Restated Articles of Incorporation of Favo Capital, Inc.](ex3_1.htm) |  |  |  |  | X |
| 3.2 | [Amended and Restated Bylaws of Favo Capital, Inc.](ex3_2.htm) |  |  |  |  | X |
| 3.3 | [Certificate of Designation for Series A Preferred Stock](ex3_3.htm) |  |  |  |  | X |
| 3.4 | [Certificate of Designation for Series C Preferred Stock](ex3_4.htm) |  |  |  |  | X |
| 3.5 | [Amended Certificate of Designation for Series C Preferred Stock](ex3_5.htm) |  |  |  |  | X |
| 3.6 | [Second Amended Certificate of Designation for Series C Preferred Stock](ex3_6.htm) |  |  |  |  | X |
| 3.7 | [Amended Certificate of Designation for Series A Preferred Stock](ex3_7.htm) |  |  |  |  | X |
| 3.8 | [Certificate of Withdrawal for Series C Preferred Stock](ex3_8.htm) |  |  |  |  | X |
| 3.9 | [Certificate of Designation for Series B Preferred Stock](ex3_9.htm) |  |  |  |  | X |
| 4.1 | [Form of Warrant](ex4_1.htm) |  |  |  |  | X |
| 4.2 | [Form of Prefunded Warrant](ex4_2.htm) |  |  |  |  | X |
| 4.3 | [008 Debenture, dated June 9, 2021](ex4_3.htm) |  |  |  |  | X |
| 4.4 | Promissory Note, dated June 30, 2021, in favor of Favo Holdings LLC |  |  |  | X |  |
| 4.5 | [Promissory Note, dated June 1, 2023, in favor of Vincent Napolitano and Shaun Quin](ex4_5.htm) |  |  |  |  | X |
| 4.6 | [Form of Promissory Note](ex4_6.htm) |  |  |  |  | X |
| 4.7 | [Form of Warrant Certificate](ex4_7.htm) |  |  |  |  | X |
| 5.1 | Legal Opinion of the Doney Law Firm |  |  |  | X |  |
| 10.1 | [Master Acquisition Financing Agreement, dated May 31, 2023](ex10_1.htm) |  |  |  |  | X |
| 10.2 | [Form of Securities Purchase Agreement](ex10_2.htm) |  |  |  |  | X |
| 10.3 | [Form of Registration Rights Agreement](ex10_3.htm) |  |  |  |  | X |
| 10.4 | [Employment Agreement by and between Favo Capital, Inc. and Vincent Napolitano dated August 20, 2024](ex10_4.htm) |  |  |  |  | X |
| 10.5 | [Employment Agreement by and between Favo Capital, Inc. and Shaun Quin dated August 21, 2024](ex10_5.htm) |  |  |  |  | X |
| 10.6 | [Employment Agreement by and between Favo Capital, Inc. and Glen Steward dated August 21, 2024](ex10_6.htm) |  |  |  |  | X |
| 10.7 | [Employment Agreement by and between Favo Capital, Inc. and Vaughan Korte dated August 21, 2024](ex10_7.htm) |  |  |  |  | X |
| 10.8 | [Favo Capital 2024 Equity Incentive Plan](ex10_8.htm) |  |  |  |  | X |
| 10.9 | [Consulting Agreement dated June 1, 2023, between Favo Capital, Inc. and Favo Holdings, LLC](ex10_9.htm) |  |  |  |  | X |
| 10.10 | [Business Commission Agreement, dated January 1, 2024](ex10_10.htm) |  |  |  |  | X |
| 10.11 | [Amendment to Business Commission Agreement, dated January 24, 2025](ex10_11.htm) |  |  |  |  | X |
| 10.12 | [Amended Employment Agreement with Vaughan Korte, dated March 1, 2025](ex10_12.htm) |  |  |  |  | X |
| 10.13 | [Conversion Agreement, dated August 25, 2025](ex10_13.htm) |  |  |  |  | X |
| 10.14 | [Voting Agreement, dated August 25, 2025](ex10_14.htm) |  |  |  |  | X |
| 10.15 | [Favo Capital, Inc. and Katy Murless dated September 1, 2025](ex10_15.htm) |  |  |  |  | X |
| 10.16 | [Loan Agreement, dated September 1, 2025](ex10_16.htm) |  |  |  |  | X |
| 10.17 | [Form of Warrant Agreement](ex10_17.htm) |  |  |  |  | X |
| 14.1 | [Code of Ethics](ex14_1.htm) |  |  |  |  | X |
| 21.1 | [Subsidiaries of the Registrant](ex21_1.htm) |  |  |  |  | X |
| 23.1 | [Consent of Turner, Stone & Company, L.L.P., independent registered public accounting firm](ex23_1.htm) |  |  |  |  | X |
| 23.2 | Consent of the Doney Law Firm (included in Exhibit 5.1) |  |  |  | X |  |
| 107 | Filing Fees |  |  |  |  | X |

---

**Item 17. Undertakings.**

The undersigned hereby undertakes:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) To file, during any period in which offers, or sales are being made, a post-effective amendment to this registration statement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Securities and Exchange Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" or "Calculation of Filing Fee" table or exhibit in the effective registration statement; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; provided, however, that paragraphs (l)(i), (l)(ii) and (l)(iii) of this section do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Securities and Exchange Commission by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(l)(i), (vii), or (x) for the purpose of providing the information required by Section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof; provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) For purposes of determining any liability under the Securities Act, each filing of the registrant's annual report pursuant to section 13(a) or section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan's annual report pursuant to section 15(d) of the Exchange Act) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7) For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8) For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

**SIGNATURES**

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement on Form S-1 to be signed on its behalf by the undersigned, thereunto duly authorized in New York, on September 12, 2025.

---

| | |
|:---|:---|
|  | **Favo Capital, Inc.** |
| By: | /s/ Vincent Napolitano |
|  | Vincent Napolitano<br> Chief Executive Officer, Principal Executive Officer and Director |

---

---

| | |
|:---|:---|
| By: | /s/ Katy Murless |
|  | Katy Murless |
| Title: | Chief Financial Officer, Principal Executive Officer, Principal Accounting Officer and Treasurer |

---

**POWER OF ATTORNEY**

Each officer and director of Favo Capital, Inc. whose signature appears below constitutes and appoints the company's President, Shaun Quin, and each of them, his or her true and lawful attorney-in-fact and agent, with full power of substitution and revocation, for him or her and in his or her name, place and stead, in any and all capacities, to execute any or all amendments, including any post-effective amendments and supplements to this Registration Statement, and any additional Registration Statement filed pursuant to Rule 462, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto each said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that each said attorney-in-fact and agent, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

\* \* \* \*

Pursuant to the requirements of the Securities Act of 1933, this Form S-1 has been signed by the following persons in the capacities indicated on the dates specified.

---

| | |
|:---|:---|
| By: | /s/ Vincent Napolitano |
|  | Vincent Napolitano<br> Chief Executive Officer and Director |
|  | September 12, 2025 |

---

---

| | |
|:---|:---|
| By: | /s/ Katy Murless |
|  | Katy Murless |
| Title: | Chief Financial Officer, Principal Executive Officer, Principal Accounting Officer and Treasurer |
| Date: | September 12, 2025 |

---

---

| | |
|:---|:---|
| By: | /s/ Glen Steward |
|  | Glen Steward |
| Title: | Chief Strategy Officer and Director |
| Date: | Semptember 12, 2025 |

---

---

| | |
|:---|:---|
| By: | /s/ Shaun Quin |
|  | Shaun Quin |
| Title: | President and Director |
| Date: | September 12, 2025 |

---

## Exhibit 1.1

EF**Hutton** 

May 30, 2024

Vincent Napolitano Chief Executive Officer Favo Capital

1025 Old Country Road Westbury, New York

Re: <u>Firm Commitment Public Offering and Uplisting</u> Dear Mr. Vincent Napolitano,

EF Hutton LLC <u>("EF Hutton")</u> is pleased to act as lead underwriter, deal manager and investment banker for the proposed firm commitment public offering and uplisting <u>("Offering")</u> by Favo Capital (separately or together with its subsidiaries and affiliates referred to herein as the <u>"Company"),</u> in connection with the offering of the Company's equity, debt and/or equity derivative instruments (the <u>"Securities")</u>.

This engagement letter agreement (the <u>"Agreement")</u> will confirm the Company's retention of EF Hutton and set forth the terms of our engagement. However, with respect to an Offering other than a bridge or other private offering, unless as specifically set forth herein, this Agreement shall not be construed or interpreted as a binding agreement between the parties unless and until a definitive agreement on the matters relating to the Offering is executed between the parties. The parties anticipate that the matters relating to the Offering, other than a bridge or other private offering, will be embodied in an Underwriting Agreement (as defined below). The parties further anticipate that following the effectiveness of a registration statement relating to the Offering, other than a bridge or other private offering, as set forth below, this Agreement will be replaced and superseded by the Underwriting Agreement.

**Section 1. Engagement**

Subject to Section 2(b) herein, the Company hereby engages EF Hutton to act as the Company's exclusive lead underwriter, financial advisor, deal manager, sole book running manager, placement agent and/or investment banker for the Offering beginning on the date hereof, and ending on the earlier of (i) twelve (12) months from the date of this Agreement, or (ii) the final closing, if any, of the Offering (the <u>"Engagement Period");</u> provided, however, that (i) the Company may terminate this Agreement on or after the 120-hundred and twentieth (120<sup>th</sup>) day following the date hereof upon thirty (30) days prior written notice to EF Hutton, and (ii) EF Hutton may terminate

this Agreement on or after the one-hundred twentieth (120th) day following the date hereof upon thirty (30) days prior written notice to the Company.

During the Engagement Period, the Company also hereby engages EF Hutton as its placement agent in a bridge financing with an offering size/transactional size of up to $5.0 million (the "Bridge Financing"). The Company shall also source financing in the Bridge Financing where EF Hutton acts as the sole placement agent and EF Hutton shall receive a placement fee of 10.0% of the aggregate gross proceeds of the total amount of the Bridge Financing (such total amount to include (i) the sub-total amount of proceeds of the Bridge Financing sourced by EF Hutton; plus (ii) the sub-total amount of proceeds of the Bridge Financing sourced by the Company, including Excepted Investors). Such placement fee shall be provided to EF Hutton at the closing of the Bridge Financing. For the avoidance of doubt, EF Hutton shall be under no obligation to raise any Bridge Financing under this Agreement.

The engagement period with respect to the Bridge Financing shall begin on the date hereof, and end on the final closing, if any, of the Bridge Financing (the "Bridge Financing Engagement Period"); provided, however, that each of the Company and EF Hutton may terminate this Agreement, as it pertains to the Bridge Financing, upon thirty (30) days prior written notice to the other party, if the other party has negligently not performed its duties under this Agreement; provided however such early termination with 30-day notice may not apply if (i) EF Hutton has already sourced an investor (or investors) and such investor(s) has affixed signatures on the securities purchase agreement/subscription agreement (or other relevant document) for the Bridge Financing, held in escrow; and/or (ii) legal substantive work has already led to a finalized form of the securities purchase agreement/subscription agreement (or other relevant document as applicable) whereby at least one signature is affixed and in escrow. Upon termination of this Agreement, as it relates to the Bridge Financing, whether through termination by way of a final closing or through early termination, within thirty (30) days of such terminated Bridge Financing Engagement Period, the Company shall cover and reimburse EF Hutton for all of its reasonable documented legal expenses then incurred, subject to a cap of US$50,000, irrespective of whether or not a Bridge Financing closing has been consummated. If a Bridge Financing closing occurs, then EF Hutton's reasonable documented legal costs (subject to a cap ofUS$50,000) in relation to the Bridge Financing shall be deducted directly from the gross proceeds and funding of the Bridge Financing.

Furthermore, the aggregate gross proceeds for Bridge Financings shall be directed to a third party escrow account with an escrow agent designated by EF Hutton (with escrow expenses to be paid by the Company) on the relevant day of closing and from there, EF Hutton shall distribute all funds (minus applicable fees, e.g., the placement fee of 10.0% pro-rated) to the Company upon closing. For the avoidance of doubt, there may occur more than one closing and EF Hutton shall tender the funds to the Company for each closing.

EF Hutton will be retained for the Offering during such Engagement Period pursuant to the terms of this Agreement. The Engagement Period may be extended upon mutual consent of the Company

and EF Hutton. Except for the Excepted Transactions, during the Engagement Period, the Company agrees not to solicit, negotiate with, or enter into any agreement with any other source of financing (whether equity, debt or otherwise), any underwriter, placement agent, financial advisor, investment banking firm or any other person or entity in connection with an offering of the Company's equity, debt and/or equity derivative instruments or any other financing or capital raise by the Company. EF Hutton acknowledges that the Company currently works with the investors as set forth in <u>Exhibit C</u> (hereinafter referred to as the "Excepted Investors"). For the sake of clarity: *both prior to and after the contemplated Bridge Financing,* the Company is permitted to consummate any transaction with the Excepted Investors (which is not the contemplated Offering) (an "Excepted Transaction") and EF Hutton shall not earn any fees including the placement agent fees described in this Agreement. *During the Bridge Financing,* the Company is permitted to include the Excepted Investors in their own portion of raising monies, but EF Hutton shall serve as the sole placement agent for the entire, aggregate Bridge Financing in which the Excepted Investors or any Company-sourced investor is participating, and EF Hutton shall be entitled to applicable fees including placement agent fee for all investors, including the Excepted Investors *(for the avoidance of doubt,* please see three paragraphs up for the exact fee structure of Bridge Financing).

For the avoidance of doubt, (i) during the Engagement Period, the Advisory Period (as defined below), the Tail Period (as defined below), the RoFR Period (as defined below), and any extensions thereof, EF Hutton shall be paid the compensation described herein in connection with the sale or issuance of any equity, debt and/or equity derivative instruments, which is not an Excepted Transaction (each, a <u>"Financing"),</u> (ii) during the Engagement Period and the RoFR Period, EF Hutton shall have the right to be the exclusive and sole investment banker, sole book-runner, and/or sole placement agent, at EF Hutton's sole discretion, for each and every future public and private equity Financing, and (iii) with respect to the foregoing subclauses (i) and (ii), EF Hutton shall be paid the applicable compensation irrespective of whether an underwriter, placement agent or other intermediary is engaged or receives compensation unless it is an Excepted Transaction. Upon execution of this Agreement, the Company is prohibited from working with any other underwriter, investment banker or placement agent.

**Section 2. Underwriting Agreement**

In connection with the Offering, EF Hutton's legal counsel will prepare an underwriting agreement between EF Hutton and the Company covering the sale of up to $25,000,000 (or other amount as may be mutually agreed upon between EF Hutton and the Company) of Securities, containing other customary terms and conditions (the <u>"Underwriting Agreement").</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Overallotment</u>. The Underwriting Agreement will provide that the Company will grant to EF Hutton an option that is exercisable within forty-five (45) days after the closing of the Offering, to acquire up to an additional fifteen percent (15.0%) of the total number of Securities to be offered by the Company in the Offering, solely for the purpose of covering over-allotments (the <u>"Over-Allotment Option").</u> To the extent a unit

of Securities is being offered, the option shall be for whole units as priced in the Offering and not for components of the unit, at EF Hutton's discretion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Syndicate.</u> As lead underwriter, deal manager and investment banker for the Offering, EF Hutton and the Company shall organize a syndicate and underwriting syndicate with registered broker dealers that are mutually acceptable to both EF Hutton and the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Terms and Conditions.</u> The final Underwriting Agreement will be in a form satisfactory to the Company and EF Hutton and will include indemnification provisions and other terms and conditions customarily found in underwriting agreements for such Offerings. The Company understands that any Underwriting Agreement will be subject to FINRA review and approval and will be subject to any revisions required by FINRA. The actual size of the Offering, the precise number of Securities to be offered by the Company, and the offering price per Security shall be the subject of continuing negotiations between the Company and EF Hutton and will depend upon the capitalization of the Company (at the time of the Offering) being acceptable to EF Hutton, general market and economic conditions, a review and finalization of audited financial statements and formal financial projections of the Company, as well as other factors which EF Hutton deems relevant in its discretion. EF Hutton may: (i) with the Company's approval (not to be unreasonably withheld, conditioned or delayed), create an underwriting syndicate for the Offering comprised of EF Hutton's representatives who are members of FINRA; (ii) rely on soliciting dealers who are FINRA members to participate in placing a portion of the Offering; and/or (iii) offer Securities to such dealers at less than the public Offering pnce.

**Section 3. Compensation for an Underwritten Offering**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Underwriting Discount.</u> In connection with the Offering as set forth in Section 2, an underwriting discount of eight percent (8.0%) (the <u>"Underwriting Discount")</u> of the total gross proceeds of the Offering shall be provided to EF Hutton at the closing of the Offering (such total amount to include (i) the sub-total amount of proceeds of the Offering sourced by EF Hutton; *plus* (ii) the sub-total amount of proceeds of the Offering sourced by the Company, including Excepted Investors), and each closing of the Over Allotment Option (if any).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Underwriter Warrants.</u> As additional compensation for EF Hutton's services, the Company shall issue to EF Hutton or its designees at the closing of the Offering (the <u>"Closing"),</u> and each closing of the Over-Allotment Option (if any), warrants (the <u>"Underwriter's Warrants")</u> to purchase that number of shares of common stock of the Company <u>("Common Stock")</u> equal to three percent (3.0%) of the aggregate number of shares of Common Stock sold in the Offering. The Underwriter's Warrants will be exercisable at any time and from time to time, in whole or in part, during the four and a half-year period commencing six (6) months from the commencement of sales of the Offering, at a price per share equal to 125% of the public offering price per Security. The Underwriter's Warrants will provide for registration rights (including a one-time demand registration right at the expense of the Company and unlimited piggyback rights during the term of the Underwriter's Warrants) and customary anti-dilution provisions (for stock dividends and splits and recapitalizations) and anti-dilution protection (adjustment in the number and price of such warrants and the shares underlying such warrants) resulting from corporate events (which would include dividends, reorganizations, mergers, etc.) and future issuance of Common Stock or Common Stock equivalents at prices (or with exercise and/or conversion prices) below the Offering price as permitted under FINRA Rule 5110(f)(2)(G).

**Section 4. Advisory Services**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) EF Hutton also will from time to time, at the request of the Company, provide advisory services to the Company <u>("Advisory Services").</u> All such counsel and assistance will be limited to matters that are compatible with EF Hutton's experience.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) In connection with any Financing (as defined below), the Company acknowledges that EF Hutton is a registered broker-dealer under Section 15A of the U.S. Securities Exchange Act of 1934, as amended (the <u>"Exchange Act"),</u> and any similar state law. While EF Hutton has preexisting relationships and contacts with various investors, registered broker-dealer and investment funds, EF Hutton 's participation in any actual or proposed offer or sale of Company securities shall be limited to that of EF Hutton to the Company and, if applicable, an introducer of investors, broker-dealers and/or funds. The Company acknowledges and agrees that the solicitation and consummation of any purchases of the Company's securities shall be handled by the Company or one or more FINRA member firms engaged by the Company for such purposes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Compensation.</u> As consideration for EF Hutton's Advisory Services pursuant to this Agreement, EF Hutton shall be entitled to receive, and the Company agrees to pay EF Hutton, the compensation set forth on <u>Exhibit B.</u> The fee payments shall be payable by wire or other immediately available funds. The fees appearing in <u>Exhibit B</u> (the <u>"Fee Schedule")</u> shall be earned by and paid to EF Hutton by the Company in connection with any Financings undertaken by the Company, the terms of which will be mutually agreed upon under a separate definitive agreement(s).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Company and EF Hutton acknowledge and agree that, in the course of performing Advisory Services hereunder, EF Hutton may communicate with (as the Company's advisor) or introduce the Company to third parties who may be interested in providing financing to the Company, including, without limitation, any Financing. The Company agrees that if during the term of this Agreement or within twelve (12) months from the effective date of the termination of this Agreement (the <u>"Advisory Period"),</u> either the Company or any party to whom the Company was introduced, directly or indirectly, by EF Hutton, or who was contacted by EF Hutton on behalf of the Company in connection with its Advisory Services for the Company, proposes a Financing involving the Company, then, if any such Financing is consummated, the Company shall pay to EF Hutton fees in accordance with the Fee Schedule. Such fees shall be payable to EF Hutton in cash, at the closing or closings of the Financing to which it relates. A Financing or M&A Transaction shall be deemed consummated before such date if any agreement in principle which includes material terms of such Financing is reached prior to such date even if the closing occurs later.

**Section 5. Registration Statement and Prospectus**

To the extent the Company decides to proceed with the Offering, the Company will, as soon as practicable, prepare and file with the Securities and Exchange Commission (the <u>"Commission")</u> a Registration Statement, as amended (the <u>"Registration Statement"),</u> under the Securities Act of 1933, as amended (the <u>"Securities Act")</u> (the prospectus included in such Registration Statement and any prospectus supplement is collectively referred to as the <u>"Prospectus")</u> covering the Securities to be offered and sold in the Offering. The Registration Statement (including the Prospectus therein), and all amendments and supplements thereto, will be in form reasonably satisfactory to EF Hutton and counsel to EF Hutton. Other than any information provided by EF Hutton in writing specifically for inclusion in the Registration Statement or the Prospectus, the Company will be solely responsible for the contents of its Registration Statement and Prospectus and any and all other written or oral communications provided by or on behalf of the Company to any actual or prospective investor of the Securities, and the Company represents and warrants that such materials and such other communications will not, as of the date of the offer or sale of the Securities, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. If at any time prior to the completion of the offer and sale of the Securities an event occurs that would cause the Registration Statement or Prospectus (as supplemented or amended) to contain an untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, the Company will notify EF Hutton immediately of such event and EF Hutton will suspend solicitations of the prospective purchasers of the Securities until such time as the Company shall prepare a supplement or amendment to the Registration Statement or Prospectus that corrects such statement or omission. The Registration

Statement will include as an exhibit a proposed form of Underwriting Agreement (which may be incorporated into such Registration Statement by reference). The final Underwriting Agreement will be in form satisfactory to the Company and EF Hutton and will include indemnification provisions and other terms and conditions customarily found in underwriting agreements for public offerings.

**Section 6. Company Expenses**

The Company will be responsible for and will pay all expenses relating to the Offering, including, without limitation, (a) all filing fees and expenses relating to the registration of the Securities with the Commission; (b) all fees and expenses relating to the listing of the Common Stock on a national exchange, if applicable; (c) all fees, expenses and disbursements relating to the registration or qualification of the Securities under the "blue sky" securities laws of such states and other jurisdictions as EF Hutton may reasonably designate (including, without limitation, all filing and registration fees, and the reasonable fees and disbursements of the Company's "blue sky" counsel, which will be EF Hutton's counsel) unless such filings are not required in connection with the Company's proposed listing on a national exchange, if applicable; (d) all fees, expenses and disbursements relating to the registration, qualification or exemption of the Securities under the securities laws of such foreign jurisdictions as EF Hutton may reasonably designate; (e) the costs of all mailing and printing of the Offering documents; (f) transfer and/or stamp taxes, if any, payable upon the transfer of Securities from the Company to EF Hutton; (g) the fees and expenses of the Company's accountants; (h) all filing fees and communication expenses associated with the review of the Offering by FINRA; (i) up to $20,000 of EF Hutton's actual accountable road show expenses for the Offering; (j) the $29,500 cost associated with EF Hutton's use oflpreo's book building, prospectus tracking and compliance software for the offering; (k) the costs associated with bound volumes of the Offering materials as well as commemorative mementos and lucite tombstones in an aggregate amount not to exceed $5,000; and (l) the fees for EF Hutton's legal counsel, in an amount not to exceed $175,000. For the sake of clarity, it is understood and agreed that the Company shall be responsible for EF Hutton's external counsel legal costs detailed in this Section, any background check costs incurred by EF Hutton and any due diligence costs, irrespective of whether the Offering is consummated or not, subject to a $50,000 cap, in the event that there is not a Closing. Upon the execution of this engagement letter, the Company shall at its own expense conduct background checks, by a background search firm acceptable to EF Hutton, on the Company's senior management and board of directors. Additionally, the Company will provide an expense advance (the "Advance") to EF Hutton of $30,000, which is payable immediately upon execution of this Agreement, such Advance may be applied by EF Hutton to the legal expenses incurred in the Offering as well as the Bridge Financing. The Advance shall be applied towards out-of-pocket accountable expense set forth herein and any portion of the Advance shall be returned back to the Company to the extent not actually incurred. EF Hutton may deduct from the net proceeds of the Offering payable to the Company on the date of Closing, or the closing of the Over-Allotment Option, if any, the expenses set forth herein to be paid by the Company to the underwriters. Additionally, one percent (1.0%) of the gross proceeds of the Offering shall be payable at the Closing to EF Hutton for non-accountable expenses.

**Section 7. Termination**

This Agreement will terminate at the end of the Engagement Period (subject to any extensions). Upon the termination of this Agreement, the Company agrees to reimburse EF Hutton for, or otherwise pay and bear, the expenses and fees to be paid and borne by the Company as provided for in Section 6 above and to reimburse EF Hutton for the full amount of its expenses incurred to such date as provided in Section 6 (which shall include, but shall not be limited to, all fees and disbursements of EF Hutton's legal counsel, travel, lodging and other "road show" expenses, mailing, printing and reproduction expenses, and any expenses incurred by EF Hutton in conducting its due diligence), less any Advance and amounts previously paid to EF Hutton in reimbursement for such expenses. The Agreement may not be terminated by the Company prior to the completion of the Engagement Period, other than as set forth in Section 1 herein. Nevertheless, the Company may also terminate this Agreement for cause, which shall include the material failure by EF Hutton to provide the underwriting services contemplated by this Agreement, as provided in FINRA Rule 51 l0(g)(S)(B).

**Section 8. Covenants, Acts, and Obligations**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Tail Financing.</u> EF Hutton shall be entitled to a cash fee equal to eight percent (8.0%) of the gross proceeds received by the Company from the sale of any equity, debt and/or equity derivative instruments to any investor actually introduced by EF Hutton to the Company during the Engagement Period, in connection with any public or private financing or capital raise that is not an Excepted Transaction (each a <u>"Tail Financing"),</u> and such Tail Financing is consummated at any time during the Engagement Period or within the twelve (12) month period following the expiration or termination of the Engagement Period (the <u>"Tail Period"),</u> provided that such Tail Financing is by a party actually introduced to the Company in an offering in which the Company has direct knowledge of such party's participation. Notwithstanding the foregoing, no fee shall be payable by the Company pursuant to this Section 8 if the Company terminates this Agreement for cause pursuant to Section 7.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Right of First Refusal.</u> Following the Closing of the Offering, EF Hutton shall have an irrevocable right of first refusal (the <u>"Right of First Refusal"),</u> for a period of twelve (12) months after the date the Offering is completed (the <u>"RoFR Period"),</u> to act as sole investment banker, sole book-runner, and/or sole placement agent, at EF Hutton's sole discretion, for each and every future public and private equity and debt offering, including all equity linked financings that are not Excepted Transactions (each, a <u>"Subject Transaction")</u>, during such twelve (12) month period, of the Company, or any successor to or any current or future subsidiary of the Company, on terms and conditions customary to EF Hutton for such Subject Transactions. EF Hutton shall have the sole right to determine whether or not any other broker dealer shall have the right to participate in a Subject Transaction and the economic terms of such participation. For the avoidance of any doubt, the Company shall not retain, engage or solicit any additional investment

banker, book-runner, financial advisor, underwriter and/or placement agent in a Subject Transaction without the express written consent of EF Hutton. Notwithstanding the foregoing, no fee shall be payable by the Company pursuant to this Section 8 if the Company terminates this Agreement for cause pursuant to Section 7.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Lock-Up Agreements:</u> The Company, on behalf of itself and any successor entity, agrees that, without the prior written consent of EF Hutton, it will not, during the Engagement Period (including any extensions thereof) and additionally for a period of 180 days after the Closing of the Offering (the <u>"Lock-Up Period"),</u> (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of capital stock of the Company or any securities convertible into or exercisable or exchangeable for shares of capital stock of the Company; (ii) file or caused to be filed any registration statement with the Commission relating to the offering of any shares of capital stock of the Company or any securities convertible into or exercisable or exchangeable for shares of capital stock of the Company; (iii) complete any offering of debt securities of the Company, other than entering into a line of credit with a traditional bank, or (iv) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of capital stock of the Company, whether any such transaction described in clause (i), (ii), (iii) or (iv) above is to be settled by delivery of shares of capital stock of the Company or such other securities, in cash or otherwise. Additionally, the Company's directors and officers and any holder(s) of five percent (5%) or more of the outstanding shares of Common Stock of the Company as of the effective date of the Registration Statement (and all holders of securities exercisable for or convertible into shares of Common Stock) shall enter into customary "lock-up" agreements in favor of EH Hutton pursuant to which such persons and entities shall agree, for a period of 180 days after the Closing of Offering, that they shall not offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of capital stock of the Company or any securities convertible into or exercisable or exchangeable for shares of capital stock of the Company, subject to customary exceptions. The foregoing restrictions shall also be contained and set forth in the Underwriting Agreement and customary "lock-up" agreements, as applicable. Notwithstanding the foregoing, EF Hutton may request "lock-up" agreements from any holder(s) ofless than five percent (5%) of the outstanding shares of Common Stock as of the effective date of the Registration Statement, in its reasonable discretion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Acts of the Company.</u> The Company agrees that any and all decisions, acts, actions, or omissions with respect to the Offering shall be the sole responsibility of the Company, and that the performance by EF Hutton of services hereunder will in no way expose EF Hutton to any liability for any such decisions, acts, actions or omissions of the Company.

**Section 9. Indemnification**

The Company agrees to indemnify EF Hutton and its affiliates as set forth in the Indemnification Provisions, a copy of which is attached hereto as <u>Exhibit A</u> and incorporated by reference herein (the <u>"Indemnification Provisions").</u>

**Section 10. No Limitations**

Nothing in this Agreement shall be construed to limit the ability of EF Hutton or its affiliates to

&nbsp;&nbsp;&nbsp;&nbsp;(a) trade in the Company's or any other company's securities or publish research on the Company or any other company, subject to applicable law, or (b) pursue or engage in investment banking, financial advisory or other business relationships with entities that may be engaged in or contemplate engaging in, or acquiring, merging with, partnering with, or disposing of, businesses that are similar to or competitive with the business of the Company.

**Section 11. Public Announcements**

Except as may be required by law, each party agrees that it will not issue press releases or engage in any other publicity with respect to the Offering, without the other party's prior written consent, which consent shall not be umeasonably withheld, delayed, or conditioned.

**Section 12. Certain Conditions**

The Offering shall be conditioned upon, among other things, the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Satisfactory completion by EF Hutton of its due diligence investigation and analysis of: (i) the Company's arrangements with its officers, directors, employees, affiliates, customers and suppliers, (ii) the audited historical financial statements of the Company as required by the Commission (including any relevant stub periods), and (iii) the Company's projected financial results for the fiscal years ending December 31, 2024 through 2026

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The execution by the Company and EF Hutton of the Underwriting Agreement, containing all applicable terms and conditions provided for in this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Company meeting the criteria necessary for inclusion of the Common Stock on the NASDAQ Market System, NYSE or the NYSE National and seeking and using its best efforts to maintain such listing for a period of at least three (3) years after the Closing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Neither the Company nor any of its affiliates has, either prior to the initial filing or the effective date of the Registration Statement, made any offer or sale of any securities which are required to be "integrated" pursuant to the Securities Act or the

regulations thereunder with the offer and sale of the Securities pursuant to the Registration Statement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The Company's registration of the Common Stock under the provisions of Section 12(b) or (g), as applicable, of the Exchange Act on or prior to the effective date of the Offering;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The Company retaining a nationally recognized PCAOB registered firm of independent certified public accountants acceptable to EF Hutton and the Company, which will have responsibility for the preparation of the financial statements and the financial exhibits, if any, to be included in the Registration Statement or any subsequent resale registration statement, it being agreed that the Company will continue to engage a nationally recognized PCAOB registered accounting firm of comparable quality (as may be determined by the Company's audit committee) for a period of at least (3) three years after the Closing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) The Company retaining a financial printer acceptable to EF Hutton to handle the printing and related aspects of the Offering;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) The Company retaining a transfer agent for the Securities reasonably acceptable to EF Hutton and continuing to retain such transfer agent for a period of three

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) years after the Closing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Company engaging a financial public relations firm reasonably acceptable to EF Hutton, which firm shall be experienced in assisting issuers in public offerings of securities and in their relations with their security holders, and continuing to retain such firm for a period of two (2) years after the Closing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) The Company registering with the Corporation Records Service (including annual report information) published by Standard & Poor's Corporation and covenanting to maintain such registration for a period of three (3) years from the Closing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) The Company shall have procured and shall covenant to maintain "key man" life insurance (in amounts agreed to by EF Hutton and with the Company as the sole beneficiary thereof) with an insurer rated at least AA or better in the most recent edition of "Best's Life Reports" on the lives of to be determined executive officer or officers of the Company; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Company shall have procured D&O insurance in a manner consistent with the Company's business and industry standards.

**Section 13. Finder's Fees**

The Company represents to EF Hutton that the Company is not liable for any finder's fees to third parties in connection with the introduction of the Company to EF Hutton. The Company represents and warrants to EF Hutton that the entry into this Agreement or any other action of the Company in connection with the proposed Offering will not violate any agreement between the Company and any other placement agent, underwriter, or financial advisor.

**Section 14. Adjustment of Compensation**

EF Hutton reserves the right to reduce any item of its compensation. However, the aggregate compensation otherwise to be paid to the underwriters by the Company may not be increased above the amounts stated herein without the approval of the Company, subject to applicable limitations imposed by FINRA.

**Section 15. Integration**

Neither the Company nor any of its affiliates has either prior to the initial filing or the effective date of the Registration Statement made any offer or sale of any securities which are required to be "integrated" pursuant to the Securities Act or the regulations thereunder with the offer and sale of the Company's securities pursuant to the Registration Statement.

**Section 16. Compliance With Laws During Road Show and Otherwise**

While the Commission is reviewing the Registration Statement, EF Hutton may plan and arrange one or more "road show" marketing trips for the Company's management to meet with prospective investors. Such trips will include visits to a number of prospective institutional and retail investors. The Company shall pay for all expenses, including, without limitation, travel and lodging expenses, associated with such trips. During the 45-day period prior to the filing of the Registration Statement with the Commission, and at all times thereafter prior and following to the effectiveness of the Registration Statement, the Company and its officers, directors and related parties will abide by all rules and regulations of the Commission relating to public offerings, including, without limitation, those relating to public statements *(i.e.,* "gun jumping") and disclosures of material non-public information.

**Section 17. Information and Due Diligence Review**

In connection with EF Hutton's engagement for the Offering during the Engagement Period, EF Hutton will perform a due diligence review. The Company agrees to cooperate with EF Hutton and to furnish or cause to be furnished to EF Hutton upon EF Hutton's request any and all information and data concerning the Company, its subsidiaries, businesses, operations, properties, financial condition, management and prospects of the Company (all such information so furnished being the <u>"Information")</u> which EF Hutton reasonably deems appropriate. The Company will provide EF Hutton with reasonable access during normal business hours of the Engagement Period to all of the Company's and its subsidiaries assets, properties, books, contracts, commitments and records and to the Company's and its subsidiaries officers, directors, employees, appraisers,

independent accountants, legal counsel and other consultants and advisors. The Company represents and warrants to EF Hutton that all Information contained in the Registration Statement and the Prospectus prepared by the Company in connection with the Offering will be complete and correct in all material respects and will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein not misleading in the light of the circumstances under which such statements are made. The Company further represents and warrants to EF Hutton that all such Information including financial projections and other forward looking information will have been prepared by Company in good faith and will be based upon assumptions which, in light of the circumstances under which they were made, are reasonable. The Company acknowledges and agrees that EF Hutton: (i) will use and rely primarily on the Information and on information available from generally recognized public sources, if any, in performing the services contemplated by this Agreement without having independently verified the same; (ii) does not assume responsibility for the accuracy or completeness of the Information and such other information; (iii) will not make an appraisal of any assets of the Company; and (iv) retains the right to continue to perform due diligence during the course of the Engagement Period.

**Section 18. Survival**

Except as provided in Section 1, 2, 3, 4, 6, 7, 8, 9, 17, 24, 25, 26 and the Indemnification Provisions hereof (which Sections are intended to be legally binding and enforceable on and against the Company and EF Hutton), this Agreement is not intended to be a binding legal document nor a legal commitment on the part of EF Hutton to provide any financing to the Company, as the agreement between the parties hereto on these matters will be embodied in the Underwriting Agreement.

**Section 19. Successors and Assigns**

The benefits of this Agreement shall inure to the parties hereto, their respective successors and assigns and to the indemnified parties hereunder and their respective successors and assigns, and the obligations and liabilities assumed in this Agreement shall be binding upon the parties hereto and their respective successors and assigns. The Company shall not assign any of its obligations hereunder without the prior written consent of the other party.

**Section 20. No Third-Party Beneficiaries**

This Agreement does not create, and shall not be construed as creating, any rights enforceable by any person or entity not a party hereto, except those entitled to the benefits of the Indemnification Provisions.

**Section 21. No Commitment**

It is expressly understood and acknowledged that EF Hutton's engagement with respect to capital raising activities does not constitute any commitment, express or implied, on the part of EF Hutton

or of any of its affiliates to purchase or place the Company's securities or to provide any type of financing.

**Section 22. No Waiver**

Failure of either party to enforce, at any time, any provision of this Agreement shall not constitute a waiver of such provision in any way or of the right of such party at any time to avail itself of such remedies as it may have for any breach or breaches of such provision.

**Section 23. Independent Contractor**

EF Hutton will act under this Agreement as an independent contractor with duties to the Company and nothing in this Agreement or the nature of EF Hutton's services shall be deemed to create a fiduciary or agency relationship between the Company and EF Hutton. The advice, written or oral, rendered by EF Hutton pursuant to this Agreement is intended solely for the benefit and use of the Company in considering the matters to which this Agreement relates, and the Company agrees that such advice may not be relied upon by any other person, used for any other purpose, reproduced, disseminated, or referred to at any time, in any manner or for any purpose, nor shall any public references to EF Hutton be made by the Company, without the prior written consent of EF Hutton which consent shall not be unreasonably withheld, except as otherwise required by applicable law. Notwithstanding any provision of this Agreement to the contrary, the Company agrees that neither EF Hutton nor its affiliates, and the respective officers, directors, employees, agents and representatives of EF Hutton, its affiliates and each other person, if any, controlling EF Hutton or any of its affiliates, shall have any liability (whether direct or indirect, in contract or tort or otherwise) to the Company for or in connection with the engagement and transaction described herein except for any such liability for losses, claims, damages or liabilities incurred by EF Hutton that are finally judicially determined to have resulted from the gross negligence or willful misconduct of such individuals or entities.

**Section 24. Specific Performance.**

The Company acknowledges and affirms that in the event of a breach of this Agreement by the Company, money damages may be inadequate and EF Hutton may not have an adequate remedy at law, and the Company agrees that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed by the Company in accordance with their specific terms or were otherwise breached. Accordingly, EF Hutton shall be entitled to seek an injunction or restraining order to prevent breaches of this Agreement and to seek to enforce specifically the terms and provisions hereof, without the requirement to post any bond or other security or to prove that money damages would be inadequate, this being in addition to any other right or remedy to which EF Hutton may be entitled under this Agreement, at law or in equity.

**Section 25. Jurisdiction and Governing Law**

This Agreement, including <u>Exhibit A</u> hereto, will be governed by and construed in accordance with the laws of the State of New York, without regard to principles of conflicts of law. Any controversy between the parties to this Agreement, or arising out of the Agreement, shall be resolved by arbitration before the Judicial Arbitration and Mediation Services, Inc. ("JAMS") in New York, New York. The following arbitration agreement should be read in conjunction with these disclosures:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) ARBITRATION
 IS FINAL AND BINDING ON THE PARTIES;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) THE
 PARTIES ARE WAIVING THEIR RIGHT TO SEEK REMEDIES IN COURT, INCLUDING THE RIGHT TO JURY TRIAL;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) PRE-ARBITRATION
 DISCOVERY IS GENERALLY MORE LIMITED THAN AND DIFFERENT FROM COURT PROCEEDING; AND

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) THE
 ARBITRATORS' AWARD IS NOT REQUIRED TO INCLUDE FACTUAL FINDING OR LEGAL REASONING AND ANY
 PARTY'S RIGHT TO APPEAL OR TO SEEK MODIFICATION OF RULINGS BY THE ARBITRATORS IS STRICTLY
 LIMITED.

Notwithstanding any provision of this Agreement to the contrary, the Company agrees that neither EF Hutton nor its affiliates, and the respective officers, directors, employees, agents and representatives of EF Hutton, its affiliates and each other person, if any, controlling EF Hutton or any of its affiliates, shall have any liability (whether direct or indirect, in contract or tort or otherwise) to the Company for or in connection with the engagement and transaction described herein except for any such liability for losses, claims, damages or liabilities incurred by the Company that are finally judicially determined to have resulted from the gross negligence or willful misconduct of such individuals or entities. If EF Hutton shall commence an action or proceeding to enforce any provisions of this Agreement, then in the event that EF Hutton is the prevailing party in such action, suit or proceeding, in addition to the obligations of the Company under Section 9 and <u>Exhibit A,</u> EF Hutton shall be reimbursed by the Company for its reasonable attorneys' fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.

**Section 26. Limitation of Liability**

In no event shall EF Hutton, or any of its affiliates, directors, officers, employees and controlling persons (within the meaning of Section 15 of the Securities Act of 1933, as amended, or Section 20 of the Securities Exchange Act of 1934) be liable to the Company for any incidental, indirect, special or consequential damages (i.e., lost profits) arising out of, or in connection with, this Agreement, whether or not such party was advised of the possibility of such damage. The Company further agrees that the liability limit of EF Hutton, or any of its affiliates, directors, officers, employees and controlling persons shall **in** no event be greater than the aggregate dollar amount which the Company paid to EF Hutton during the term of this Agreement.

**Section 27. Entire Agreement**

This Agreement (including <u>Exhibit A)</u> constitutes the entire agreement and understanding between EF Hutton and the Company regarding the subject matter hereof and supersedes all prior agreements and understandings, whether oral or written, relating to the subject matter hereof.

**Section 28. Modification**

This Agreement may be amended and modified only by a written agreement signed by all the parties specifically acknowledging and approving the modification.

**Section 29. Counterparts**

This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. This Agreement may be executed with electronic, facsimile, or e-mailed signatures. Such signatures shall be deemed valid for all purposes as if they were signed by hand.

***[Signature page follows]***

 ****

 **

**![](image_001.jpg)**

 **

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. Pursuant to the aforementioned advance expense, please wire $30,000 USD of immediately available funds to EF Hutton upon execution of this Agreement.

Very truly yours,

**EF Hutton LLC**

By: <u>/s/ Phillip Wiederlight</u>

Name: Phillip Wiederlight

Title: COO and Supervisory Principal

**AGREED AND ACCEPTED:**

The foregoing accurately sets forth our understanding and agreement with respect to the matters set forth herein.

**Favo Capital**

By: <u>/s/ Vincent Napolitano</u>

Name: Vincent Napolitano

Title: Chief Executive Officer

 

**<u>EXHIBIT A</u>**

**INDEMNIFICATION PROVISIONS**

The Company agrees to indemnify and hold harmless EF Hutton and its affiliates (as defined in Rule 405 under the Securities Act of 1933, as amended) and their respective directors, officers, stockholders, members, managers, partners, employees, representatives, agents and controlling persons (EF Hutton and each such person each being an "Indemnified Party") from and against all losses, claims, damages and liabilities (or actions, including shareholder actions, in respect thereof), joint or several, to which such Indemnified Party may become subject under any applicable federal or state law, or otherwise, which arise out of or are based on (i) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto), including the information deemed to be a part of the Registration Statement at the time of effectiveness and at any subsequent time pursuant to Rules 430A and 430B of the Securities Act and the rules and regulations thereunder, as applicable, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading or (ii) any untrue statement or alleged untrue statement of a material fact contained in any Prospectus (or any amendment or supplement to any of the foregoing) or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading or (iii) any untrue statement or alleged untrue statement of a material fact contained in any materials or information provided to investors by, or with the approval of, the Company in connection with the marketing of the offering of the Securities, including any roadshow or investor presentations made to investors by the Company (whether in person or electronically) or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading or (iv) in whole or in part any inaccuracy in any material respect in the representations and warranties of the Company contained herein; provided, however, that the Company shall not be liable to the extent that such loss, claim, liability, expense or damage is based on any untrue statement or omission or alleged untrue statement or omission made in reliance on and in conformity with written information furnished to the Company in writing with respect to the underwriters by the underwriters expressly for use in the Registration Statement, the Prospectus or any amendment thereof or supplement thereto, which information shall consist solely of the following: (i) the names of the underwriters appearing in the Prospectus; and (ii) the information set forth in the Prospectus in the "Electronic Distribution" and "Price Stabilization, Short Positions and Penalty Bids" sections under the caption "Underwriting". The Company will not be liable to any Indemnified Party under the foregoing indemnification and reimbursement provisions: (i) for any settlement by an Indemnified Party effected without its prior written consent (not to be unreasonably withheld); or (ii) to the extent that any loss, claim, damage or liability is found in a

Exhibit A-1

final, non-appeal able judgment by a court of competent jurisdiction to have resulted primarily from the Indemnified Party's willful misconduct or gross negligence. The Company also agrees that no Indemnified Party shall have any liability (whether direct or indirect, in contract or tort or otherwise) to the Company or its security holders or creditors related to or arising out of the engagement of EF Hutton pursuant to, or the performance by EF Hutton of the services contemplated by, this Agreement except to the extent that any loss, claim, damage or liability is found in a final, non-appealable judgment by a court of competent jurisdiction to have resulted primarily from such Indemnified Party's willful misconduct or gross negligence.

Promptly after receipt by an Indemnified Party of notice of any intention or threat to commence an action, suit or proceeding or notice of the commencement of any action, suit or proceeding, such Indemnified Party will, if a claim in respect thereof is to be made against the Company pursuant hereto, promptly notify the Company in writing of the same. Any failure or delay by an Indemnified Party to give the notice referred to in this paragraph shall not affect such Indemnified Party's right to be indemnified hereunder, except to the extent that such failure or delay causes actual material harm to the Company, or materially prejudices its ability to defend such action, suit or proceeding on behalf of such Indemnified Party. In case any such action is brought against any Indemnified Party and such Indemnified Party notifies the Company of the commencement thereof, the Company may elect to assume the defense thereof, with counsel reasonably satisfactory to such Indemnified Party, and an Indemnified Party may employ counsel to participate in the defense of any such action provided, that the employment of such counsel shall be at the Indemnified Party's own expense, unless (i) the employment of such counsel has been authorized in writing by the Company, (ii) the Indemnified Party has reasonably concluded (based upon advice of counsel to the Indemnified Party) that there are legal defenses available to the Indemnified Party that are not available to the Company, or that there exists a conflict or potential conflict of interest (based upon advice of counsel to the Indemnified Party) between the Indemnified Party and the Company that makes it impossible or inadvisable for counsel to the Company to conduct the defense of both parties (in which case the Company will not have the right to direct the defense of such action on behalf of the Indemnified Party), or (iii) the Company has not in fact employed counsel reasonably satisfactory to the Indemnified Party to assume the defense of such action within a reasonable time after receiving notice of the action, suit or proceeding, in each of which cases the reasonable fees, disbursements and other charges of such counsel will be at the expense of the Company; provided, further, that in no event shall the Company be required to pay fees and expenses for more than one firm of attorneys (and local counsel) representing the Indemnified Party.

If the indemnification provided for in this Agreement is for any reason held unenforceable by an arbitrator or court of competent jurisdiction, the Company agrees to contribute to the losses, claims, damages and liabilities incurred by such Indemnified Party for which such indemnification is held unenforceable (i) in such proportion as is appropriate to reflect the relative benefits to the Company, on the one hand, and EF Hutton on the other hand, of the Offering as contemplated whether or not the Offering is consummated or, (ii) if (but only if) the allocation provided for in clause (i) is for any reason unenforceable, in such proportion as is appropriate to

Exhibit A-2

reflect not only the relative benefits referred to in clause (i) but also the relative fault of the Company, on the one hand and EF Hutton, on the other hand, as well as any other relevant equitable considerations. The Company agrees that for the purposes of this paragraph the relative benefits to the Company and EF Hutton of the Offering as contemplated shall be deemed to be in the same proportion that the total value received or contemplated to be received by the Company in connection with the Offering bear to the fees paid or to be paid to EF Hutton under this Agreement. Notwithstanding the foregoing, the Company expressly agrees that EF Hutton shall not be required to contribute any amount in excess of the amount by which fees paid to EF Hutton hereunder (excluding reimbursable expenses), exceeds the amount of any damages which EF Hutton has otherwise been required to pay.

The Company agrees that without EF Hutton's prior written consent, which shall not be unreasonably withheld, it will not settle, compromise or consent to the entry of any judgment in any pending or threatened claim, action or proceeding in respect of which indemnification could be sought under the indemnification provisions of this Agreement (whether or not EF Hutton or any other Indemnified Party is an actual or potential party to such claim, action or proceeding), unless such settlement, compromise or consent includes an unconditional release of each Indemnified Party from all liability arising out of such claim, action or proceeding.

In the event that an Indemnified Party is required to appear as a witness in any action brought by or on behalf of or against the Company in which such Indemnified Party is not named as a defendant, the Company agrees to promptly reimburse EF Hutton on a monthly basis for all expenses incurred by it in connection with such Indemnified Party's appearing and preparing to appear as such a witness, including, without limitation, the reasonable fees and disbursements of its legal counsel.

If multiple claims are brought with respect to at least one of which indemnification is permitted under applicable law and provided for under this Agreement, the Company agrees that any judgment or arbitration award shall be conclusively deemed to be based on claims as to which indemnification is permitted and provided for, except to the extent the judgment or arbitration award expressly states that it, or any portion thereof, is based solely on a claim as to which indemnification is not available.

Exhibit A-3

**<u>EXHIBIT B</u>**

**COMPENSATION FOR FINANCINGS AND M&A TRANSACTIONS**

Capitalized terms used in this Exhibit shall have the meanings assigned to such terms in the Agreement to which this Exhibit is attached.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Financing Fees:</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) For
 private equity and equity-linked placements, pay EF Hutton a cash fee of eight percent (8.0%)
 of the amount of capital raised, invested or committed, payable to EF Hutton in cash at the
 closing or closings of the Financing to which it relates; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) For
 debt placements, pay EF Hutton a cash fee of six percent (6.0%) of the amount of capital
 raised, invested or committed, payable to EF Hutton in cash at the closing or
 closings of the Financing to which it relates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) As
 additional compensation for EF Hutton's services, the Company shall issue to EF
 Hutton or its designees at the Closing warrants (the "Warrants") to purchase that
 number of shares of Common Stock equal to three percent (3.0%) of the aggregate proceeds
 sold in an offering. The Warrants will be exercisable at any time in whole or in part, during
 the five years (5) years from the effective date of the Offering at a price per share equal
 to 125% of the Offering price. The Warrants will provide for piggyback
 registration rights, Black Scholes change in control provisions and customary anti-dilution
 provisions and adjustments in the number and price of such warrants and the shares underlying
 such warrants resulting from corporate events which would include dividends, reorganizations,
 mergers, etc. and future issuance of Common Stock or Common Stock equivalents at prices or
 with exercise and/or conversion prices below the offering price as permitted under FINRA
 Rule 5110(f)(2)(G).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>M&A Transaction Fees:</u> The M&A Transaction fees shall be payable to EF Hutton incash at
 the closing or closings of the M&A Transaction to which it relates and shall be equal
 to five percent (5.0%) ofM&A Transaction consideration as defined below. The amount of
 consideration paid in a M&A Transaction shall include, for purposes of calculating such
 fee, all forms of consideration paid or received, directly or indirectly, by the Company
 and/or its stockholders in such M&A Transaction, including, without limitation, cash,
 securities, notes or other evidences of

Exhibit B-1

indebtedness, assumption of liabilities (whether by operation of law or otherwise), or any combination thereof If all or portion of the consideration paid in the M&A Transaction is other than cash or securities, then the value of such non-cash consideration shall be the fair market value thereof on the date the M&A Transaction is consummated as mutually agreed upon in good faith by the Company and EF Hutton. If such non-cash consideration consists of common stock, options, warrants or rights for which a public trading market existed prior to the consummation for the M&A Transaction, then the value of such securities shall be determined based upon the closing or last sales price thereof on the date of the consummation of the M&A Transaction. If such non cash consideration consists of newly-issued, publicly-traded common stock, options, warrants or rights for which no public trading market existed prior to the consummation of the M&A Transaction, then the value thereof shall be the average of the closing prices for the twenty (20) trading days after the fifth (5<sup>th</sup>) trading day after the consummation of the M&A Transaction. In such event, the fee payable to EF Hutton pursuant to this Fee Schedule shall be paid on the thirtieth (30<sup>th</sup>) trading day after consummation of the M&A Transaction. If no public market exists for the common stock, options, warrants or other rights issued in the M&A Transaction, then the value thereof shall be as mutually agreed upon in good faith by the Company and EF Hutton. If the non cash consideration paid in the M&A Transaction consists of preferred stock or debt securities (regardless of whether a public trading market existed for such preferred stock or debt securities prior to consummation of the M&A Transaction or exists thereafter), the value thereof shall be the maximum liquidation value (without regard to accrued dividends) of the preferred stock or the principal amount of the debt securities, as the case may be. Any amounts payable by a purchaser to the Company, any stockholder of the Company or an affiliate of either the Company or any stockholder of the Company in connection with a non-competition, employment, consulting, licensing, supply or other agreement (or payable by the Company if the Company is the acquiring entity) shall be deemed to be part of the consideration paid in the M&A Transaction. If all or a portion of the consideration payable inconnection with the M&A Transaction includes contingent future payments, then the Company shall pay to EF Hutton an additional cash fee, determined in accordance with this Fee Schedule, as, when and if such contingency payments are received. If with respect to any non-cash consideration the Company and EF Hutton are unable to agree on the fair market value thereof, then such value shall be determined by submission of the question to a reputable appraisal firm with experience valuing property of the nature of the subject consideration acceptable to the Company and EF Hutton (the fees and expenses ofwhom shall be borne equally by the Company and EF Hutton).

Exhibit B-2

**<u>EXHIBIT C</u>**

**EXCEPTED INVESTORS**

&nbsp;&nbsp;&nbsp;&nbsp;1. Liro Holdings

&nbsp;&nbsp;&nbsp;&nbsp;2. Rocco Trotta

&nbsp;&nbsp;&nbsp;&nbsp;3. J & T Family Trust

&nbsp;&nbsp;&nbsp;&nbsp;4. Gennaro Trotta

&nbsp;&nbsp;&nbsp;&nbsp;5. Sovereign Agency

&nbsp;&nbsp;&nbsp;&nbsp;6. 315-352 Associated

&nbsp;&nbsp;&nbsp;&nbsp;7. Brian Eskin

&nbsp;&nbsp;&nbsp;&nbsp;8. Ronald Scaleri

&nbsp;&nbsp;&nbsp;&nbsp;9. Douglas V Lovely Trust

&nbsp;&nbsp;&nbsp;&nbsp;10. Douglas V Lovely IRA

&nbsp;&nbsp;&nbsp;&nbsp;11. William Bill Furr

&nbsp;&nbsp;&nbsp;&nbsp;12. Bryan Dumas

&nbsp;&nbsp;&nbsp;&nbsp;13. Xavier Group

&nbsp;&nbsp;&nbsp;&nbsp;14. Randel Strider

&nbsp;&nbsp;&nbsp;&nbsp;15. Randy Stout

&nbsp;&nbsp;&nbsp;&nbsp;16. Marc DiMecco

&nbsp;&nbsp;&nbsp;&nbsp;17. Total Security

&nbsp;&nbsp;&nbsp;&nbsp;18. SHB Equities

&nbsp;&nbsp;&nbsp;&nbsp;19. Matt DiMecco

&nbsp;&nbsp;&nbsp;&nbsp;20. Jack & Lilly Realty

&nbsp;&nbsp;&nbsp;&nbsp;21. Wimbledon Management

&nbsp;&nbsp;&nbsp;&nbsp;22. Jason Baskind

&nbsp;&nbsp;&nbsp;&nbsp;23. Bob Baskind

&nbsp;&nbsp;&nbsp;&nbsp;24. Traditions Funding

&nbsp;&nbsp;&nbsp;&nbsp;25. Thomas Francis

&nbsp;&nbsp;&nbsp;&nbsp;26. Stewards Investment
 Capital

&nbsp;&nbsp;&nbsp;&nbsp;27. ForFront Capital

&nbsp;&nbsp;&nbsp;&nbsp;28. Stewards Capital USA

&nbsp;&nbsp;&nbsp;&nbsp;29. Glen Steward

&nbsp;&nbsp;&nbsp;&nbsp;30. Bilal Adam

&nbsp;&nbsp;&nbsp;&nbsp;31. FAVO Holdings

&nbsp;&nbsp;&nbsp;&nbsp;32. Honey D & Sons

&nbsp;&nbsp;&nbsp;&nbsp;33. Valeriya Nayshevska

Exhibit C-1

For the avoidance of doubt, all Excepted Investors listed above are in fact investors. The Company represents and warrants that none of the above listed investors are other investment banks that may serve as a placement agent or underwriter to the Company under its existing contracts.

Exhibit C-2

## Exhibit 2.1

**<u>MEMBERSHIP INTEREST PURCHASE AGREEMENT</u>**

**THIS MEMBERSHIP INTEREST PURCHASE AGREEMENT** (hereinafter referred to as the "**Agreement**") is made and entered into on this 30<sup>th</sup> day of May 2023 by and among **FAVO Funding CA LLC**, a Delaware limited liability company (hereinafter referred to as the "**Company**"), **Vincent Napolitano** and **Shaun Quin**, individuals (hereinafter referred to collectively as the "**Members**" of the Company) and **FAVO Capital, Inc.**, a Nevada corporation (hereinafter referred to as "**Buyer**").

**<u> </u>**

**<u>W I T N E S S E T H</u>:**

**WHEREAS**, Members own all of the membership interest in the Company;

**WHEREAS**, Buyer desires to purchase one hundred percent (100%) of the membership interest of the Company from the Members (hereinafter referred to as the "**Membership Interest**"); and, Members desire to sell and transfer the Membership Interest to Buyer upon the terms and subject to the conditions hereinafter set forth; and

**NOW, THEREFORE**, in consideration of the mutual promises made herein and the benefits to be derived from this Agreement, the parties hereto do hereby represent, warrant, covenant and agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.** **<u>Recital Incorporation</u>**. The above recitals are true and correct and are hereinafter incorporated herein this Agreement by reference.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.** **<u>Purchase</u>**. On the terms and subject to the conditions and based upon the representations, warranties, covenants and agreements of the parties hereinafter set forth in this Agreement, Buyer hereby agrees to purchase from the Members and (i) the Company and (ii) the Members hereby agree to sell and deliver to Buyer the Membership Interest. The Company and the Members shall also deliver, or fully and successfully assign all management agreements and all other material agreements (the "**Contracts**") to Buyer upon the purchase.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.** **<u>Purchase Price</u>.** The purchase price shall be as set forth on <u>Annex A</u>, attached hereto (the "**Purchase Price**"), and paid as per <u>Annex A</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.**  **<u>Closing</u>** .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The closing hereunder will take place at the offices of the Buyers whose address is 1025 Old Country Road, Suite 421E, Westbury, NY 11590 on or before May 31<sup>st</sup>, 2023, at 10:45 AM or such other date and time as the parties hereto may mutually agree to in writing. Such closing is hereinafter and hereinbefore sometimes referred to as the "**Closing**" and such time and date are hereinafter and herein before sometimes referred to as the "**Closing Date**".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) At the Closing:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Members shall deliver to Buyer (i) an assignment of the Membership Interest of the Company and an amended and restated operating agreement of the Company (the "**Operating Agreement**"), together with such endorsements, assignments and other instruments as, in the opinion of counsel to Buyer, are necessary for the purpose of vesting in Buyer good and valid title to the Membership Interest free and clear of all liens, charges and encumbrances, and (ii) proof of assignment of the Contracts; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Buyer shall deliver the Purchase Price to the Members, pro- rata.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.** **<u>Representations, Covenants, Agreements and Warranties by Members and the Company</u>.** The Members and the Company hereby warrant and represent as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Members and the Company have and will have at the Closing, full, lawful power and authority to enter into and to carry out the terms of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Neither the execution nor delivery of this Agreement, nor the performance of Members or the Company in consummating the transactions contemplated by this Agreement, will (1) conflict with or result in a violation or breach of, or constitute default under, any term or provision of any agreement or instrument to which Members or the Company is a party or by which Members or the Company is bound, or (2) result in the imposition of any lien, encumbrance, charge or claim upon the Membership Interest; and Members and the Company have full power and authority to carry out all the terms, conditions and provisions of the transactions contemplated by this Agreement without the consent of any other person not a party hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) No consent, approval or authorization of, or designation, declaration or filing, with any governmental authority is required in connection with the execution or delivery of this Agreement by Members or the Company or the consummation by Members or the Company of the transaction contemplated hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) To the best of Members' knowledge, there are no judgments, liens, actions, suits, proceedings or investigations pending or in process that could materially affect Members' or the Company's right to enter into and consummate the transactions contemplated by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Buyer will have legal title to the Membership Interest, free and clear of all liens, claims, pledges or encumbrances of any kind, nature or description arising by, through or under the Members, with full and unrestricted legal power, authority and right to enter into this Agreement and to transfer and deliver the Membership Interest to Buyer pursuant hereto, and upon delivery of the Membership Interest to Buyer at the Closing, Buyer will be the owner of such Membership Interest and receive legal title to such Membership Interest, free and clear of all liens,

claims, pledges or encumbrances of any kind, nature or description arising by, through or under the Members.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The Company has full power and authority to operate its business in accordance with the Operating Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) The Company is a limited liability company duly organized, validly existing and (to the best of Members' knowledge) in good standing under the laws of the jurisdiction of its organization, and has all requisite power to own, lease and operate its properties and to carry on its business as now being conducted. The Membership Interest constitutes one hundred percent (100%) of the Members' right, title and interest in and to the Company. Members has not created, and is not aware of, any outstanding options, warrants, other securities, agreements or commitments pursuant to which any person has or may have the rights to acquire any or all of the Membership Interest or any other securities or any evidences of indebtedness of the Company, and to Members' knowledge there are no existing agreements or arrangements which require or permit any of the Membership Interest to be voted by or at the direction of anyone other than the record owner thereof, except as previously disclosed to the Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) To the best of Members' knowledge, no action or proceeding at law or in equity is pending against the Company or any of the Company's assets before any federal or state court or governmental commission, and no such proceeding is pending in arbitration or by or before any administrative agency wherein an unfavorable judgment, decision, ruling or finding would adversely affect the business, operations, assets, condition, financial or otherwise, of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) EXCEPT AS EXPRESSLY SET FORTH IN THIS PARAGRAPH 5, MEMBERS MAKE NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO THE MEMBERSHIP INTEREST OR THE BUSINESS, AFFAIRS, FINANCIAL CONDITION, ASSETS, LIABILITIES, MANAGEMENT, RISKS OR OPERATIONS OF THE COMPANY AND ITS BUSINESS. MEMBERS EXPRESSLY DISCLAIMS ANY AND ALL SUCH REPRESENTATIONS AND WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO THE WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.** **<u>Representations, Covenants, Agreements and Warranties by Buyer</u>.** Buyer hereby represents and warrants as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Buyer has, and will have at the Closing, full lawful power and authority to enter into and to carry out the terms of, and all transactions contemplated by, this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Neither the execution nor delivery of this Agreement, nor the performance by Buyer of the transactions contemplated by this Agreement will (i) conflict with or result in a

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) No consent, approval or authorization of, or designation, declaration or filing, with any governmental authority is required in connection with the execution or delivery of this Agreement by Buyer or the consummation by Buyer of the transaction contemplated hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Buyer has not relied on any business representations or warranties of the Members regarding the Company or Buyer's purchase of the Membership Interest and, together with Buyer's advisors, Buyer has the requisite knowledge and experience to understand the risks involved in the transactions contemplated by this Agreement. Buyer is thoroughly familiar with the business, affairs, financial condition, assets, liabilities, management, risks and operations of the Company and its business, and except for Members' warranties set forth in Paragraph 5 of this Agreement, Buyer acknowledges and agrees that Buyer is acquiring the Membership Interest "AS IS", "WHERE IS" and "WITH ALL FAULTS".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The Buyer is acquiring the Membership Interest for Buyer's own account for investment and not with a view to the distribution or with the present intention of selling, assigning or otherwise transferring any thereof. Buyer understands that the Membership Interest has not been registered under the Securities Act of 1933, as amended, and may not be sold, assigned or otherwise transferred without registration thereunder unless such sale, assignment or transfer does not involve a transaction requiring registration under the Securities Act of 1933, as amended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.**  **<u>Members' Indemnity</u>.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Members, hereby agrees to defend, indemnify and hold Buyer (hereinafter referred to as the "**Indemnitee**"), harmless from and against any damages, liabilities, losses and expenses (including but not limited to reasonable attorneys' fees) which may be sustained or suffered by the Indemnitee as the result of any action, claim, or proceeding whatsoever arising out of, or based upon, or by reason of Members' past operation of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Indemnitee shall give prompt written notice to Members of each claim for indemnification hereunder specifying the amount and nature of the claim, and of any matter which is likely to give rise to an indemnification claim. Indemnitee has the right to participate at its own expense in the defense of any such matter or its settlement, or the Indemnitee may direct Members to take over the defense of such matter. Failure to give timely notice of a matter which may give rise to an indemnification claim shall not affect the rights of any Indemnitee to collect such claims

from Members so long as such failure to so notify Members does not materially or adversely affect Members' ability to defend such claim against a third party. Members, in the defense of any claim or litigation shall not, except with the consent of an Indemnitee, which consent shall not be unreasonably withheld or delayed, consent to entry of any judgment or enter into any settlement by which such Indemnitee is to be bound and which judgment or settlement does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnitee a release from all liability in respect of such claim or litigation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.** **<u>Conditions Precedent to Performance By Buyer</u>**. The obligation of Buyer hereunder to purchase the Membership Interest pursuant to this Agreement is subject to the satisfaction at or prior to the Closing of all of the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Members and the Company shall have performed and complied with all terms, covenants and conditions required by this Agreement to be performed or complied with at or before the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) All representations and warranties of Members and the Company contained in this Agreement shall be true and correct at and as of the Closing, with the same force and effect as if such representations and warranties had been made as of the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.** **<u>Conditions Precedent to Performance by Members and the Company</u>.** The obligation of Members and the Company hereunder to sell the Membership Interest pursuant to this Agreement is subject to the satisfaction, at or prior to the Closing, of all of the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Buyer shall have performed and compiled with all terms, covenants and conditions required by this Agreement to be performed or complied with, at or before the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) All representations and warranties of Buyer contained in this Agreement shall be true and correct at and as of the Closing with the same force and effect as if such representations and warranties had been made as of the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) All action, proceedings, instruments and documents required or taken in connection with or to carry out the transactions contemplated by this Agreement, and all other legal matters, shall have been satisfactory in form and substance to Members' counsel.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Buyer shall have delivered the Purchase Price to the Members, pro- rata.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.** **<u>Brokers</u>**. Buyer represents and warrants to Members, and Members represent and warrant to Buyer, that the transactions contemplated by this Agreement have been and shall be carried out by the parties directly with each other and in such a manner as not to give rise to any valid claims against any of the parties for a brokerage commission, finder's fee or other like payment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.** **<u>Expenses</u>**. Buyer and Members will each pay the fee and expenses of their respective counsel and accountants.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**12.** **<u>Survival</u>**<u>.</u> All representations, warranties, covenants and indemnities made by any party to this Agreement in connection with the transactions contemplated hereby, or in any exhibit, schedule, certificate, list or other document delivered pursuant hereto, shall survive the Closing for a period of one (1) year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**13.** **<u>Notices</u>**. All notice and communications to any party required hereunder shall be in writing and shall be delivered to such party at his, her or its address set forth at the beginning of this Agreement, or to such other address as such party may designate by notice given hereunder. Any notices and communications which are mailed, shall be sent by registered or certified first- class mail, postage prepaid.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**14.** **<u>Assignment</u>**. On or before the Closing Date, no party may assign his, her or its rights, duties or obligations under this Agreement. After the Closing, the terms, provisions, covenants and conditions of this Agreement shall bind and benefit the parties hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**15.** **<u>Counterparts</u>**. This Agreement may be executed in two or more counterparts, each of which, when so executed and delivered, shall be an original instrument, but such counterparts, together, shall constitute a single agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**16.** **<u>Entire Agreement and Amendments</u>**. This Agreement, including the exhibits, schedules and certificates referred to herein which are a part hereof, contains the entire understanding of the parties hereto with respect to the subject matter contained herein and may be amended only by a written instrument executed by all of the parties hereto, or their respective heirs, successors, personal representatives and assigns. There are no restrictions, promises, warranties, covenants or undertaking other than those expressly set forth herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**17.** **<u>Governing Law</u>.** This Agreement shall be construed under and be governed by the laws of the State of Nevada without regard to principles of conflict of laws. Any action, claim or proceeding brought by any party hereunder shall be commenced exclusively in the courts of Nevada. The parties hereto each hereby irrevocably and unconditionally consent to the exclusive jurisdiction and venue of such courts in any action, claim or proceeding brought under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**18.** **<u>Headings</u>**. Headings are inserted for convenience and do not form a part of the Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**19.** **<u>Company Deposits</u>:** Any and all amounts currently on deposit for the benefit of the Company for utility services, insurance, rent etc., are and shall remain the sole property of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**20.** **<u>Severability</u>:** In the event that any of the provisions, or portions thereof, of this Agreement are held to be unenforceable or invalid by any court of competent jurisdiction, the validity and enforceability of the remaining provisions, or portions thereof, shall not be affected thereby and effect shall be given to the intent manifested by the provisions, or portions thereof, held to be enforceable and valid.

**IN WITNESS WHEREOF**, Members and Buyer have caused this Agreement to be executed in their respective names, in person or by their authorized officers, as of the day and year first above written.

---

| | |
|:---|:---|
| **Members:** | **Buyer:** |
| **Vincent Napolitano** | **FAVO Capital, Inc.** |
| /s/ Vincent Napolitano |  |
|  | By: Vincent Napolitano, CEO |
| **Shaun Quin** | /s/ Vincent Napolitano |
| /s/ Shaun Quin |  |
| **Company:**  |  |
| **FAVO Funding CA LLC** |  |
| By: Shaun Quin |  |
| /s/ Shaun Quin |  |
| **Acknowledged by Third Party Investor:** |  |
| **Forfront Capital, LLC** |  |
| By: Nathaniel Tsang Mang Kin |  |
| /s/ Nathaniel Tsang Mang Kin |  |

---

ANNEX A

**Based on the independent valuation of FAVO Funding CA LLC (Attached – Annex B) the following has been determined.**

**Purchase Price:**

**$0.00**

**FAVO Funding CA LLC forms part of FAVO Funding LLC and is Managed by FAVO GROUP LLC.**

ANNEX B - VALUATION

## Exhibit 2.1

**<u>MEMBERSHIP INTEREST PURCHASE AGREEMENT</u>**

**THIS MEMBERSHIP INTEREST PURCHASE AGREEMENT** (hereinafter referred to as the "**Agreement**") is made and entered into on this 30<sup>th</sup> day of May 2023 by and among **FAVO Funding LLC**, a Delaware limited liability company (hereinafter referred to as the "**Company**"), **Vincent Napolitano** and **Shaun Quin**, individuals (hereinafter referred to collectively as the "**Members**" of the Company) and **FAVO Capital, Inc.**, a Nevada corporation (hereinafter referred to as "**Buyer**").

**<u>W I T N E S S E T H</u>:**

**WHEREAS**, Members own all of the membership interest in the Company;

**WHEREAS**, Buyer desires to purchase one hundred percent (100%) of the membership interest of the Company from the Members (hereinafter referred to as the "**Membership Interest**"); and, Members desire to sell and transfer the Membership Interest to Buyer upon the terms and subject to the conditions hereinafter set forth; and

**NOW, THEREFORE**, in consideration of the mutual promises made herein and the benefits to be derived from this Agreement, the parties hereto do hereby represent, warrant, covenant and agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.** **<u>Recital Incorporation</u>**. The above recitals are true and correct and are hereinafter incorporated herein this Agreement by reference.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.** **<u>Purchase</u>**. On the terms and subject to the conditions and based upon the representations, warranties, covenants and agreements of the parties hereinafter set forth in this Agreement, Buyer hereby agrees to purchase from the Members and (i) the Company and (ii) the Members hereby agree to sell and deliver to Buyer the Membership Interest. The Company and the Members shall also deliver, or fully and successfully assign all management agreements and all other material agreements (the "**Contracts**") to Buyer upon the purchase.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.** **<u>Purchase Price</u>.** The purchase price shall be as set forth on <u>Annex A</u>, attached hereto (the "**Purchase Price**"), and paid as per <u>Annex A</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.**  **<u>Closing</u>** .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The closing hereunder will take place at the offices of the Buyers whose address is 1025 Old Country Road, Suite 421E, Westbury, NY 11590 on or before May 31<sup>st</sup>, 2023, at 10:45 AM or such other date and time as the parties hereto may mutually agree to in writing. Such closing is hereinafter and hereinbefore sometimes referred to as the "**Closing**" and such time and date are hereinafter and herein before sometimes referred to as the "**Closing Date**".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) At the Closing:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Members shall deliver to Buyer (i) an assignment of the Membership Interest of the Company and an amended and restated operating agreement of the Company (the "**Operating Agreement**"), together with such endorsements, assignments and other instruments as, in the opinion of counsel to Buyer, are necessary for the purpose of vesting in Buyer good and valid title to the Membership Interest free and clear of all liens, charges and encumbrances, and (ii) proof of assignment of the Contracts; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Buyer shall deliver the Purchase Price to the Members, pro- rata.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.** **<u>Representations, Covenants, Agreements and Warranties by Members and the Company</u>.** The Members and the Company hereby warrant and represent as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Members and the Company have and will have at the Closing, full, lawful power and authority to enter into and to carry out the terms of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Neither the execution nor delivery of this Agreement, nor the performance of Members or the Company in consummating the transactions contemplated by this Agreement, will (1) conflict with or result in a violation or breach of, or constitute default under, any term or provision of any agreement or instrument to which Members or the Company is a party or by which Members or the Company is bound, or (2) result in the imposition of any lien, encumbrance, charge or claim upon the Membership Interest; and Members and the Company have full power and authority to carry out all the terms, conditions and provisions of the transactions contemplated by this Agreement without the consent of any other person not a party hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) No consent, approval or authorization of, or designation, declaration or filing, with any governmental authority is required in connection with the execution or delivery of this Agreement by Members or the Company or the consummation by Members or the Company of the transaction contemplated hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) To the best of Members' knowledge, there are no judgments, liens, actions, suits, proceedings or investigations pending or in process that could materially affect Members' or the Company's right to enter into and consummate the transactions contemplated by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Buyer will have legal title to the Membership Interest, free and clear of all liens, claims, pledges or encumbrances of any kind, nature or description arising by, through or under the Members, with full and unrestricted legal power, authority and right to enter into this Agreement and to transfer and deliver the Membership Interest to Buyer pursuant hereto, and upon delivery of the Membership Interest to Buyer at the Closing, Buyer will be the owner of such Membership Interest and receive legal title to such Membership Interest, free and clear of all liens,

claims, pledges or encumbrances of any kind, nature or description arising by, through or under the Members.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The Company has full power and authority to operate its business in accordance with the Operating Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) The Company is a limited liability company duly organized, validly existing and (to the best of Members' knowledge) in good standing under the laws of the jurisdiction of its organization, and has all requisite power to own, lease and operate its properties and to carry on its business as now being conducted. The Membership Interest constitutes one hundred percent (100%) of the Members' right, title and interest in and to the Company. Members has not created, and is not aware of, any outstanding options, warrants, other securities, agreements or commitments pursuant to which any person has or may have the rights to acquire any or all of the Membership Interest or any other securities or any evidences of indebtedness of the Company, and to Members' knowledge there are no existing agreements or arrangements which require or permit any of the Membership Interest to be voted by or at the direction of anyone other than the record owner thereof, except as previously disclosed to the Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) To the best of Members' knowledge, no action or proceeding at law or in equity is pending against the Company or any of the Company's assets before any federal or state court or governmental commission, and no such proceeding is pending in arbitration or by or before any administrative agency wherein an unfavorable judgment, decision, ruling or finding would adversely affect the business, operations, assets, condition, financial or otherwise, of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) EXCEPT AS EXPRESSLY SET FORTH IN THIS PARAGRAPH 5, MEMBERS MAKE NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO THE MEMBERSHIP INTEREST OR THE BUSINESS, AFFAIRS, FINANCIAL CONDITION, ASSETS, LIABILITIES, MANAGEMENT, RISKS OR OPERATIONS OF THE COMPANY AND ITS BUSINESS. MEMBERS EXPRESSLY DISCLAIMS ANY AND ALL SUCH REPRESENTATIONS AND WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO THE WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.** **<u>Representations, Covenants, Agreements and Warranties by Buyer</u>.** Buyer hereby represents and warrants as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Buyer has, and will have at the Closing, full lawful power and authority to enter into and to carry out the terms of, and all transactions contemplated by, this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Neither the execution nor delivery of this Agreement, nor the performance by Buyer of the transactions contemplated by this Agreement will (i) conflict with or result in a

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) No consent, approval or authorization of, or designation, declaration or filing, with any governmental authority is required in connection with the execution or delivery of this Agreement by Buyer or the consummation by Buyer of the transaction contemplated hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Buyer has not relied on any business representations or warranties of the Members regarding the Company or Buyer's purchase of the Membership Interest and, together with Buyer's advisors, Buyer has the requisite knowledge and experience to understand the risks involved in the transactions contemplated by this Agreement. Buyer is thoroughly familiar with the business, affairs, financial condition, assets, liabilities, management, risks and operations of the Company and its business, and except for Members' warranties set forth in Paragraph 5 of this Agreement, Buyer acknowledges and agrees that Buyer is acquiring the Membership Interest "AS IS", "WHERE IS" and "WITH ALL FAULTS".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The Buyer is acquiring the Membership Interest for Buyer's own account for investment and not with a view to the distribution or with the present intention of selling, assigning or otherwise transferring any thereof. Buyer understands that the Membership Interest has not been registered under the Securities Act of 1933, as amended, and may not be sold, assigned or otherwise transferred without registration thereunder unless such sale, assignment or transfer does not involve a transaction requiring registration under the Securities Act of 1933, as amended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.**  **<u>Members' Indemnity</u>.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Members, hereby agrees to defend, indemnify and hold Buyer (hereinafter referred to as the "**Indemnitee**"), harmless from and against any damages, liabilities, losses and expenses (including but not limited to reasonable attorneys' fees) which may be sustained or suffered by the Indemnitee as the result of any action, claim, or proceeding whatsoever arising out of, or based upon, or by reason of Members' past operation of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Indemnitee shall give prompt written notice to Members of each claim for indemnification hereunder specifying the amount and nature of the claim, and of any matter which is likely to give rise to an indemnification claim. Indemnitee has the right to participate at its own expense in the defense of any such matter or its settlement, or the Indemnitee may direct Members to take over the defense of such matter. Failure to give timely notice of a matter which may give rise to an indemnification claim shall not affect the rights of any Indemnitee to collect such claims

from Members so long as such failure to so notify Members does not materially or adversely affect Members' ability to defend such claim against a third party. Members, in the defense of any claim or litigation shall not, except with the consent of an Indemnitee, which consent shall not be unreasonably withheld or delayed, consent to entry of any judgment or enter into any settlement by which such Indemnitee is to be bound and which judgment or settlement does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnitee a release from all liability in respect of such claim or litigation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.** **<u>Conditions Precedent to Performance By Buyer</u>**. The obligation of Buyer hereunder to purchase the Membership Interest pursuant to this Agreement is subject to the satisfaction at or prior to the Closing of all of the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Members and the Company shall have performed and complied with all terms, covenants and conditions required by this Agreement to be performed or complied with at or before the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) All representations and warranties of Members and the Company contained in this Agreement shall be true and correct at and as of the Closing, with the same force and effect as if such representations and warranties had been made as of the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.** **<u>Conditions Precedent to Performance by Members and the Company</u>.** The obligation of Members and the Company hereunder to sell the Membership Interest pursuant to this Agreement is subject to the satisfaction, at or prior to the Closing, of all of the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Buyer shall have performed and compiled with all terms, covenants and conditions required by this Agreement to be performed or complied with, at or before the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) All representations and warranties of Buyer contained in this Agreement shall be true and correct at and as of the Closing with the same force and effect as if such representations and warranties had been made as of the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) All action, proceedings, instruments and documents required or taken in connection with or to carry out the transactions contemplated by this Agreement, and all other legal matters, shall have been satisfactory in form and substance to Members' counsel.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Buyer shall have delivered the Purchase Price to the Members, pro- rata.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.** **<u>Brokers</u>**. Buyer represents and warrants to Members, and Members represent and warrant to Buyer, that the transactions contemplated by this Agreement have been and shall be carried out by the parties directly with each other and in such a manner as not to give rise to any valid claims against any of the parties for a brokerage commission, finder's fee or other like payment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.** **<u>Expenses</u>**. Buyer and Members will each pay the fee and expenses of their respective counsel and accountants.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**12.** **<u>Survival</u>**<u>.</u> All representations, warranties, covenants and indemnities made by any party to this Agreement in connection with the transactions contemplated hereby, or in any exhibit, schedule, certificate, list or other document delivered pursuant hereto, shall survive the Closing for a period of one (1) year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**13.** **<u>Notices</u>**. All notice and communications to any party required hereunder shall be in writing and shall be delivered to such party at his, her or its address set forth at the beginning of this Agreement, or to such other address as such party may designate by notice given hereunder. Any notices and communications which are mailed, shall be sent by registered or certified first- class mail, postage prepaid.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**14.** **<u>Assignment</u>**. On or before the Closing Date, no party may assign his, her or its rights, duties or obligations under this Agreement. After the Closing, the terms, provisions, covenants and conditions of this Agreement shall bind and benefit the parties hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**15.** **<u>Counterparts</u>**. This Agreement may be executed in two or more counterparts, each of which, when so executed and delivered, shall be an original instrument, but such counterparts, together, shall constitute a single agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**16.** **<u>Entire Agreement and Amendments</u>**. This Agreement, including the exhibits, schedules and certificates referred to herein which are a part hereof, contains the entire understanding of the parties hereto with respect to the subject matter contained herein and may be amended only by a written instrument executed by all of the parties hereto, or their respective heirs, successors, personal representatives and assigns. There are no restrictions, promises, warranties, covenants or undertaking other than those expressly set forth herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**17.** **<u>Governing Law</u>.** This Agreement shall be construed under and be governed by the laws of the State of Nevada without regard to principles of conflict of laws. Any action, claim or proceeding brought by any party hereunder shall be commenced exclusively in the courts of Nevada. The parties hereto each hereby irrevocably and unconditionally consent to the exclusive jurisdiction and venue of such courts in any action, claim or proceeding brought under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**18.** **<u>Headings</u>**. Headings are inserted for convenience and do not form a part of the Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**19.** **<u>Company Deposits</u>:** Any and all amounts currently on deposit for the benefit of the Company for utility services, insurance, rent etc., are and shall remain the sole property of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**20.** **<u>Severability</u>:** In the event that any of the provisions, or portions thereof, of this Agreement are held to be unenforceable or invalid by any court of competent jurisdiction, the validity and enforceability of the remaining provisions, or portions thereof, shall not be affected thereby and effect shall be given to the intent manifested by the provisions, or portions thereof, held to be enforceable and valid.

**IN WITNESS WHEREOF**, Members and Buyer have caused this Agreement to be executed in their respective names, in person or by their authorized officers, as of the day and year first above written.

---

| | |
|:---|:---|
| **Members:** | **Buyer:** |
| **Vincent Napolitano** | **FAVO Capital, Inc.** |
| /s/ Vincent Napolitano |  |
|  | By: Vincent Napolitano, CEO |
| **Shaun Quin** | /s/ Vincent Napolitano |
| /s/ Shaun Quin |  |
| **Company:**  |  |
| **FAVO Funding LLC** |  |
| By: Shaun Quin |  |
| /s/ Shaun Quin |  |
| **Acknowledged by Third Party Investor:** |  |
| **Forfront Capital, LLC** |  |
| By: Nathaniel Tsang Mang Kin |  |
| /s/ Nathaniel Tsang Mang Kin |  |

---

ANNEX A

**Based on the independent valuation of FAVO Funding LLC (Attached – Annex B) the following has been determined.**

**Purchase Price:**

**$5,000,000.00 (Five Million Dollars) To be Paid as follows:**

**FAVO (OTC Markets: FAVO)**

**Stock at $0.25 Per Share 20,000,000 (Twenty Million Shares)**

ANNEX B - VALUATION

## Exhibit 2.3

**<u>MEMBERSHIP INTEREST PURCHASE AGREEMENT</u>**

**THIS MEMBERSHIP INTEREST PURCHASE AGREEMENT** (hereinafter referred to as the "**Agreement**") is made and entered into on this 30<sup>th</sup> day of May 2023 by and among **FAVO Group Human Resources LLC**, a Delaware limited liability company (hereinafter referred to as the "**Company**"), **Vincent Napolitano** and **Shaun Quin**, individuals (hereinafter referred to collectively as the "**Members**" of the Company) and **FAVO Capital, Inc.**, a Nevada corporation (hereinafter referred to as "**Buyer**").

**<u>W I T N E S S E T H</u>:**

**WHEREAS**, Members own all of the membership interest in the Company;

**WHEREAS**, Buyer desires to purchase one hundred percent (100%) of the membership interest of the Company from the Members (hereinafter referred to as the "**Membership Interest**"); and, Members desire to sell and transfer the Membership Interest to Buyer upon the terms and subject to the conditions hereinafter set forth; and

**NOW, THEREFORE**, in consideration of the mutual promises made herein and the benefits to be derived from this Agreement, the parties hereto do hereby represent, warrant, covenant and agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.** **<u>Recital Incorporation</u>**. The above recitals are true and correct and are hereinafter incorporated herein this Agreement by reference.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.** **<u>Purchase</u>**. On the terms and subject to the conditions and based upon the representations, warranties, covenants and agreements of the parties hereinafter set forth in this Agreement, Buyer hereby agrees to purchase from the Members and (i) the Company and (ii) the Members hereby agree to sell and deliver to Buyer the Membership Interest. The Company and the Members shall also deliver, or fully and successfully assign all management agreements and all other material agreements (the "**Contracts**") to Buyer upon the purchase.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.** **<u>Purchase Price</u>.** The purchase price shall be as set forth on <u>Annex A</u>, attached hereto (the "**Purchase Price**"), and paid as per <u>Annex A</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.**  **<u>Closing</u>** .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The closing hereunder will take place at the offices of the Buyers whose address is 1025 Old Country Road, Suite 421E, Westbury, NY 11590 on or before May 31<sup>st</sup>, 2023, at 10:45 AM or such other date and time as the parties hereto may mutually agree to in writing. Such closing is hereinafter and hereinbefore sometimes referred to as the "**Closing**" and such time and date are hereinafter and herein before sometimes referred to as the "**Closing Date**".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) At the Closing:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Members shall deliver to Buyer (i) an assignment of the Membership Interest of the Company and an amended and restated operating agreement of the Company (the "**Operating Agreement**"), together with such endorsements, assignments and other instruments as, in the opinion of counsel to Buyer, are necessary for the purpose of vesting in Buyer good and valid title to the Membership Interest free and clear of all liens, charges and encumbrances, and (ii) proof of assignment of the Contracts; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Buyer shall deliver the Purchase Price to the Members, pro- rata.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.** **<u>Representations, Covenants, Agreements and Warranties by Members and the Company</u>.** The Members and the Company hereby warrant and represent as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Members and the Company have and will have at the Closing, full, lawful power and authority to enter into and to carry out the terms of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Neither the execution nor delivery of this Agreement, nor the performance of Members or the Company in consummating the transactions contemplated by this Agreement, will (1) conflict with or result in a violation or breach of, or constitute default under, any term or provision of any agreement or instrument to which Members or the Company is a party or by which Members or the Company is bound, or (2) result in the imposition of any lien, encumbrance, charge or claim upon the Membership Interest; and Members and the Company have full power and authority to carry out all the terms, conditions and provisions of the transactions contemplated by this Agreement without the consent of any other person not a party hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) No consent, approval or authorization of, or designation, declaration or filing, with any governmental authority is required in connection with the execution or delivery of this Agreement by Members or the Company or the consummation by Members or the Company of the transaction contemplated hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) To the best of Members' knowledge, there are no judgments, liens, actions, suits, proceedings or investigations pending or in process that could materially affect Members' or the Company's right to enter into and consummate the transactions contemplated by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Buyer will have legal title to the Membership Interest, free and clear of all liens, claims, pledges or encumbrances of any kind, nature or description arising by, through or under the Members, with full and unrestricted legal power, authority and right to enter into this Agreement and to transfer and deliver the Membership Interest to Buyer pursuant hereto, and upon delivery of the Membership Interest to Buyer at the Closing, Buyer will be the owner of such Membership Interest and receive legal title to such Membership Interest, free and clear of all liens,

claims, pledges or encumbrances of any kind, nature or description arising by, through or under the Members.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The Company has full power and authority to operate its business in accordance with the Operating Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) The Company is a limited liability company duly organized, validly existing and (to the best of Members' knowledge) in good standing under the laws of the jurisdiction of its organization, and has all requisite power to own, lease and operate its properties and to carry on its business as now being conducted. The Membership Interest constitutes one hundred percent (100%) of the Members' right, title and interest in and to the Company. Members has not created, and is not aware of, any outstanding options, warrants, other securities, agreements or commitments pursuant to which any person has or may have the rights to acquire any or all of the Membership Interest or any other securities or any evidences of indebtedness of the Company, and to Members' knowledge there are no existing agreements or arrangements which require or permit any of the Membership Interest to be voted by or at the direction of anyone other than the record owner thereof, except as previously disclosed to the Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) To the best of Members' knowledge, no action or proceeding at law or in equity is pending against the Company or any of the Company's assets before any federal or state court or governmental commission, and no such proceeding is pending in arbitration or by or before any administrative agency wherein an unfavorable judgment, decision, ruling or finding would adversely affect the business, operations, assets, condition, financial or otherwise, of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) EXCEPT AS EXPRESSLY SET FORTH IN THIS PARAGRAPH 5, MEMBERS MAKE NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO THE MEMBERSHIP INTEREST OR THE BUSINESS, AFFAIRS, FINANCIAL CONDITION, ASSETS, LIABILITIES, MANAGEMENT, RISKS OR OPERATIONS OF THE COMPANY AND ITS BUSINESS. MEMBERS EXPRESSLY DISCLAIMS ANY AND ALL SUCH REPRESENTATIONS AND WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO THE WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.** **<u>Representations, Covenants, Agreements and Warranties by Buyer</u>.** Buyer hereby represents and warrants as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Buyer has, and will have at the Closing, full lawful power and authority to enter into and to carry out the terms of, and all transactions contemplated by, this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Neither the execution nor delivery of this Agreement, nor the performance by Buyer of the transactions contemplated by this Agreement will (i) conflict with or result in a

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) No consent, approval or authorization of, or designation, declaration or filing, with any governmental authority is required in connection with the execution or delivery of this Agreement by Buyer or the consummation by Buyer of the transaction contemplated hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Buyer has not relied on any business representations or warranties of the Members regarding the Company or Buyer's purchase of the Membership Interest and, together with Buyer's advisors, Buyer has the requisite knowledge and experience to understand the risks involved in the transactions contemplated by this Agreement. Buyer is thoroughly familiar with the business, affairs, financial condition, assets, liabilities, management, risks and operations of the Company and its business, and except for Members' warranties set forth in Paragraph 5 of this Agreement, Buyer acknowledges and agrees that Buyer is acquiring the Membership Interest "AS IS", "WHERE IS" and "WITH ALL FAULTS".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The Buyer is acquiring the Membership Interest for Buyer's own account for investment and not with a view to the distribution or with the present intention of selling, assigning or otherwise transferring any thereof. Buyer understands that the Membership Interest has not been registered under the Securities Act of 1933, as amended, and may not be sold, assigned or otherwise transferred without registration thereunder unless such sale, assignment or transfer does not involve a transaction requiring registration under the Securities Act of 1933, as amended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.**  **<u>Members' Indemnity</u>.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Members, hereby agrees to defend, indemnify and hold Buyer (hereinafter referred to as the "**Indemnitee**"), harmless from and against any damages, liabilities, losses and expenses (including but not limited to reasonable attorneys' fees) which may be sustained or suffered by the Indemnitee as the result of any action, claim, or proceeding whatsoever arising out of, or based upon, or by reason of Members' past operation of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Indemnitee shall give prompt written notice to Members of each claim for indemnification hereunder specifying the amount and nature of the claim, and of any matter which is likely to give rise to an indemnification claim. Indemnitee has the right to participate at its own expense in the defense of any such matter or its settlement, or the Indemnitee may direct Members to take over the defense of such matter. Failure to give timely notice of a matter which may give rise to an indemnification claim shall not affect the rights of any Indemnitee to collect such claims

from Members so long as such failure to so notify Members does not materially or adversely affect Members' ability to defend such claim against a third party. Members, in the defense of any claim or litigation shall not, except with the consent of an Indemnitee, which consent shall not be unreasonably withheld or delayed, consent to entry of any judgment or enter into any settlement by which such Indemnitee is to be bound and which judgment or settlement does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnitee a release from all liability in respect of such claim or litigation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.** **<u>Conditions Precedent to Performance By Buyer</u>**. The obligation of Buyer hereunder to purchase the Membership Interest pursuant to this Agreement is subject to the satisfaction at or prior to the Closing of all of the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Members and the Company shall have performed and complied with all terms, covenants and conditions required by this Agreement to be performed or complied with at or before the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) All representations and warranties of Members and the Company contained in this Agreement shall be true and correct at and as of the Closing, with the same force and effect as if such representations and warranties had been made as of the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.** **<u>Conditions Precedent to Performance by Members and the Company</u>.** The obligation of Members and the Company hereunder to sell the Membership Interest pursuant to this Agreement is subject to the satisfaction, at or prior to the Closing, of all of the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Buyer shall have performed and compiled with all terms, covenants and conditions required by this Agreement to be performed or complied with, at or before the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) All representations and warranties of Buyer contained in this Agreement shall be true and correct at and as of the Closing with the same force and effect as if such representations and warranties had been made as of the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) All action, proceedings, instruments and documents required or taken in connection with or to carry out the transactions contemplated by this Agreement, and all other legal matters, shall have been satisfactory in form and substance to Members' counsel.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Buyer shall have delivered the Purchase Price to the Members, pro- rata.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.** **<u>Brokers</u>**. Buyer represents and warrants to Members, and Members represent and warrant to Buyer, that the transactions contemplated by this Agreement have been and shall be carried out by the parties directly with each other and in such a manner as not to give rise to any valid claims against any of the parties for a brokerage commission, finder's fee or other like payment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.** **<u>Expenses</u>**. Buyer and Members will each pay the fee and expenses of their respective counsel and accountants.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**12.** **<u>Survival</u>**<u>.</u> All representations, warranties, covenants and indemnities made by any party to this Agreement in connection with the transactions contemplated hereby, or in any exhibit, schedule, certificate, list or other document delivered pursuant hereto, shall survive the Closing for a period of one (1) year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**13.** **<u>Notices</u>**. All notice and communications to any party required hereunder shall be in writing and shall be delivered to such party at his, her or its address set forth at the beginning of this Agreement, or to such other address as such party may designate by notice given hereunder. Any notices and communications which are mailed, shall be sent by registered or certified first- class mail, postage prepaid.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**14.** **<u>Assignment</u>**. On or before the Closing Date, no party may assign his, her or its rights, duties or obligations under this Agreement. After the Closing, the terms, provisions, covenants and conditions of this Agreement shall bind and benefit the parties hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**15.** **<u>Counterparts</u>**. This Agreement may be executed in two or more counterparts, each of which, when so executed and delivered, shall be an original instrument, but such counterparts, together, shall constitute a single agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**16.** **<u>Entire Agreement and Amendments</u>**. This Agreement, including the exhibits, schedules and certificates referred to herein which are a part hereof, contains the entire understanding of the parties hereto with respect to the subject matter contained herein and may be amended only by a written instrument executed by all of the parties hereto, or their respective heirs, successors, personal representatives and assigns. There are no restrictions, promises, warranties, covenants or undertaking other than those expressly set forth herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**17.** **<u>Governing Law</u>.** This Agreement shall be construed under and be governed by the laws of the State of Nevada without regard to principles of conflict of laws. Any action, claim or proceeding brought by any party hereunder shall be commenced exclusively in the courts of Nevada. The parties hereto each hereby irrevocably and unconditionally consent to the exclusive jurisdiction and venue of such courts in any action, claim or proceeding brought under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**18.** **<u>Headings</u>**. Headings are inserted for convenience and do not form a part of the Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**19.** **<u>Company Deposits</u>:** Any and all amounts currently on deposit for the benefit of the Company for utility services, insurance, rent etc., are and shall remain the sole property of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**20.** **<u>Severability</u>:** In the event that any of the provisions, or portions thereof, of this Agreement are held to be unenforceable or invalid by any court of competent jurisdiction, the validity and enforceability of the remaining provisions, or portions thereof, shall not be affected thereby and effect shall be given to the intent manifested by the provisions, or portions thereof, held to be enforceable and valid.

**IN WITNESS WHEREOF**, Members and Buyer have caused this Agreement to be executed in their respective names, in person or by their authorized officers, as of the day and year first above written.

---

| | |
|:---|:---|
| **Members:** | **Buyer:** |
| **Vincent Napolitano** | **FAVO Capital, Inc.** |
| /s/ Vincent Napolitano |  |
|  | By: Vincent Napolitano, CEO |
| **Shaun Quin** | /s/ Vincent Napolitano |
| /s/ Shaun Quin |  |
| **Company:**  |  |
| **FAVO Group Human Resources LLC** |  |
| By: Shaun Quin |  |
| /s/ Shaun Quin |  |
| **Acknowledged by Third Party Investor:** |  |
| **Forfront Capital, LLC** |  |
| By: Nathaniel Tsang Mang Kin |  |
| /s/ Nathaniel Tsang Mang Kin |  |

---

ANNEX A

**Based on the independent valuation of FAVO Group Human Resources LLC (Attached – Annex B) the following has been determined.**

**Purchase Price:**

**$0.00**

**FAVO Group Human Resources LLC is the HR Division of FAVO Group LLC.**

ANNEX B - VALUATION

## Exhibit 2.4

**<u>MEMBERSHIP INTEREST PURCHASE AGREEMENT</u>**

**THIS MEMBERSHIP INTEREST PURCHASE AGREEMENT** (hereinafter referred to as the "**Agreement**") is made and entered into on this 30<sup>th</sup> day of May 2023 by and among **FAVO Group LLC**, a Delaware limited liability company (hereinafter referred to as the "**Company**"), **Vincent Napolitano** and **Shaun Quin**, individuals (hereinafter referred to collectively as the "**Members**" of the Company) and **FAVO Capital, Inc.**, a Nevada corporation (hereinafter referred to as "**Buyer**").

**<u>W I T N E S S E T H</u>:**

**WHEREAS**, Members own all of the membership interest in the Company;

**WHEREAS**, Buyer desires to purchase one hundred percent (100%) of the membership interest of the Company from the Members (hereinafter referred to as the "**Membership Interest**"); and, Members desire to sell and transfer the Membership Interest to Buyer upon the terms and subject to the conditions hereinafter set forth; and

**NOW, THEREFORE**, in consideration of the mutual promises made herein and the benefits to be derived from this Agreement, the parties hereto do hereby represent, warrant, covenant and agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.** **<u>Recital Incorporation</u>**. The above recitals are true and correct and are hereinafter incorporated herein this Agreement by reference.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.** **<u>Purchase</u>**. On the terms and subject to the conditions and based upon the representations, warranties, covenants and agreements of the parties hereinafter set forth in this Agreement, Buyer hereby agrees to purchase from the Members and (i) the Company and (ii) the Members hereby agree to sell and deliver to Buyer the Membership Interest. The Company and the Members shall also deliver, or fully and successfully assign all management agreements and all other material agreements (the "**Contracts**") to Buyer upon the purchase.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.** **<u>Purchase Price</u>.** The purchase price shall be as set forth on <u>Annex A</u>, attached hereto (the "**Purchase Price**"), and paid as per <u>Annex A</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.**  **<u>Closing</u>** .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The closing hereunder will take place at the offices of the Buyers whose address is 1025 Old Country Road, Suite 421E, Westbury, NY 11590 on or before May 31<sup>st</sup>, 2023, at 10:45 AM or such other date and time as the parties hereto may mutually agree to in writing. Such closing is hereinafter and hereinbefore sometimes referred to as the "**Closing**" and such time and date are hereinafter and herein before sometimes referred to as the "**Closing Date**".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) At the Closing:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Members shall deliver to Buyer (i) an assignment of the Membership Interest of the Company and an amended and restated operating agreement of the Company (the "**Operating Agreement**"), together with such endorsements, assignments and other instruments as, in the opinion of counsel to Buyer, are necessary for the purpose of vesting in Buyer good and valid title to the Membership Interest free and clear of all liens, charges and encumbrances, and (ii) proof of assignment of the Contracts; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Buyer shall deliver the Purchase Price to the Members, pro- rata.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.** **<u>Representations, Covenants, Agreements and Warranties by Members and the Company</u>.** The Members and the Company hereby warrant and represent as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Members and the Company have and will have at the Closing, full, lawful power and authority to enter into and to carry out the terms of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Neither the execution nor delivery of this Agreement, nor the performance of Members or the Company in consummating the transactions contemplated by this Agreement, will (1) conflict with or result in a violation or breach of, or constitute default under, any term or provision of any agreement or instrument to which Members or the Company is a party or by which Members or the Company is bound, or (2) result in the imposition of any lien, encumbrance, charge or claim upon the Membership Interest; and Members and the Company have full power and authority to carry out all the terms, conditions and provisions of the transactions contemplated by this Agreement without the consent of any other person not a party hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) No consent, approval or authorization of, or designation, declaration or filing, with any governmental authority is required in connection with the execution or delivery of this Agreement by Members or the Company or the consummation by Members or the Company of the transaction contemplated hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) To the best of Members' knowledge, there are no judgments, liens, actions, suits, proceedings or investigations pending or in process that could materially affect Members' or the Company's right to enter into and consummate the transactions contemplated by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Buyer will have legal title to the Membership Interest, free and clear of all liens, claims, pledges or encumbrances of any kind, nature or description arising by, through or under the Members, with full and unrestricted legal power, authority and right to enter into this Agreement and to transfer and deliver the Membership Interest to Buyer pursuant hereto, and upon delivery of the Membership Interest to Buyer at the Closing, Buyer will be the owner of such Membership Interest and receive legal title to such Membership Interest, free and clear of all liens,

claims, pledges or encumbrances of any kind, nature or description arising by, through or under the Members.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The Company has full power and authority to operate its business in accordance with the Operating Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) The Company is a limited liability company duly organized, validly existing and (to the best of Members' knowledge) in good standing under the laws of the jurisdiction of its organization, and has all requisite power to own, lease and operate its properties and to carry on its business as now being conducted. The Membership Interest constitutes one hundred percent (100%) of the Members' right, title and interest in and to the Company. Members has not created, and is not aware of, any outstanding options, warrants, other securities, agreements or commitments pursuant to which any person has or may have the rights to acquire any or all of the Membership Interest or any other securities or any evidences of indebtedness of the Company, and to Members' knowledge there are no existing agreements or arrangements which require or permit any of the Membership Interest to be voted by or at the direction of anyone other than the record owner thereof, except as previously disclosed to the Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) To the best of Members' knowledge, no action or proceeding at law or in equity is pending against the Company or any of the Company's assets before any federal or state court or governmental commission, and no such proceeding is pending in arbitration or by or before any administrative agency wherein an unfavorable judgment, decision, ruling or finding would adversely affect the business, operations, assets, condition, financial or otherwise, of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) EXCEPT AS EXPRESSLY SET FORTH IN THIS PARAGRAPH 5, MEMBERS MAKE NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO THE MEMBERSHIP INTEREST OR THE BUSINESS, AFFAIRS, FINANCIAL CONDITION, ASSETS, LIABILITIES, MANAGEMENT, RISKS OR OPERATIONS OF THE COMPANY AND ITS BUSINESS. MEMBERS EXPRESSLY DISCLAIMS ANY AND ALL SUCH REPRESENTATIONS AND WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO THE WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.** **<u>Representations, Covenants, Agreements and Warranties by Buyer</u>.** Buyer hereby represents and warrants as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Buyer has, and will have at the Closing, full lawful power and authority to enter into and to carry out the terms of, and all transactions contemplated by, this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Neither the execution nor delivery of this Agreement, nor the performance by Buyer of the transactions contemplated by this Agreement will (i) conflict with or result in a

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) No consent, approval or authorization of, or designation, declaration or filing, with any governmental authority is required in connection with the execution or delivery of this Agreement by Buyer or the consummation by Buyer of the transaction contemplated hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Buyer has not relied on any business representations or warranties of the Members regarding the Company or Buyer's purchase of the Membership Interest and, together with Buyer's advisors, Buyer has the requisite knowledge and experience to understand the risks involved in the transactions contemplated by this Agreement. Buyer is thoroughly familiar with the business, affairs, financial condition, assets, liabilities, management, risks and operations of the Company and its business, and except for Members' warranties set forth in Paragraph 5 of this Agreement, Buyer acknowledges and agrees that Buyer is acquiring the Membership Interest "AS IS", "WHERE IS" and "WITH ALL FAULTS".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The Buyer is acquiring the Membership Interest for Buyer's own account for investment and not with a view to the distribution or with the present intention of selling, assigning or otherwise transferring any thereof. Buyer understands that the Membership Interest has not been registered under the Securities Act of 1933, as amended, and may not be sold, assigned or otherwise transferred without registration thereunder unless such sale, assignment or transfer does not involve a transaction requiring registration under the Securities Act of 1933, as amended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.**  **<u>Members' Indemnity</u>.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Members, hereby agrees to defend, indemnify and hold Buyer (hereinafter referred to as the "**Indemnitee**"), harmless from and against any damages, liabilities, losses and expenses (including but not limited to reasonable attorneys' fees) which may be sustained or suffered by the Indemnitee as the result of any action, claim, or proceeding whatsoever arising out of, or based upon, or by reason of Members' past operation of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Indemnitee shall give prompt written notice to Members of each claim for indemnification hereunder specifying the amount and nature of the claim, and of any matter which is likely to give rise to an indemnification claim. Indemnitee has the right to participate at its own expense in the defense of any such matter or its settlement, or the Indemnitee may direct Members to take over the defense of such matter. Failure to give timely notice of a matter which may give rise to an indemnification claim shall not affect the rights of any Indemnitee to collect such claims

from Members so long as such failure to so notify Members does not materially or adversely affect Members' ability to defend such claim against a third party. Members, in the defense of any claim or litigation shall not, except with the consent of an Indemnitee, which consent shall not be unreasonably withheld or delayed, consent to entry of any judgment or enter into any settlement by which such Indemnitee is to be bound and which judgment or settlement does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnitee a release from all liability in respect of such claim or litigation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.** **<u>Conditions Precedent to Performance By Buyer</u>**. The obligation of Buyer hereunder to purchase the Membership Interest pursuant to this Agreement is subject to the satisfaction at or prior to the Closing of all of the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Members and the Company shall have performed and complied with all terms, covenants and conditions required by this Agreement to be performed or complied with at or before the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) All representations and warranties of Members and the Company contained in this Agreement shall be true and correct at and as of the Closing, with the same force and effect as if such representations and warranties had been made as of the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.** **<u>Conditions Precedent to Performance by Members and the Company</u>.** The obligation of Members and the Company hereunder to sell the Membership Interest pursuant to this Agreement is subject to the satisfaction, at or prior to the Closing, of all of the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Buyer shall have performed and compiled with all terms, covenants and conditions required by this Agreement to be performed or complied with, at or before the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) All representations and warranties of Buyer contained in this Agreement shall be true and correct at and as of the Closing with the same force and effect as if such representations and warranties had been made as of the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) All action, proceedings, instruments and documents required or taken in connection with or to carry out the transactions contemplated by this Agreement, and all other legal matters, shall have been satisfactory in form and substance to Members' counsel.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Buyer shall have delivered the Purchase Price to the Members, pro- rata.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.** **<u>Brokers</u>**. Buyer represents and warrants to Members, and Members represent and warrant to Buyer, that the transactions contemplated by this Agreement have been and shall be carried out by the parties directly with each other and in such a manner as not to give rise to any valid claims against any of the parties for a brokerage commission, finder's fee or other like payment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.** **<u>Expenses</u>**. Buyer and Members will each pay the fee and expenses of their respective counsel and accountants.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**12.** **<u>Survival</u>**<u>.</u> All representations, warranties, covenants and indemnities made by any party to this Agreement in connection with the transactions contemplated hereby, or in any exhibit, schedule, certificate, list or other document delivered pursuant hereto, shall survive the Closing for a period of one (1) year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**13.** **<u>Notices</u>**. All notice and communications to any party required hereunder shall be in writing and shall be delivered to such party at his, her or its address set forth at the beginning of this Agreement, or to such other address as such party may designate by notice given hereunder. Any notices and communications which are mailed, shall be sent by registered or certified first- class mail, postage prepaid.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**14.** **<u>Assignment</u>**. On or before the Closing Date, no party may assign his, her or its rights, duties or obligations under this Agreement. After the Closing, the terms, provisions, covenants and conditions of this Agreement shall bind and benefit the parties hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**15.** **<u>Counterparts</u>**. This Agreement may be executed in two or more counterparts, each of which, when so executed and delivered, shall be an original instrument, but such counterparts, together, shall constitute a single agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**16.** **<u>Entire Agreement and Amendments</u>**. This Agreement, including the exhibits, schedules and certificates referred to herein which are a part hereof, contains the entire understanding of the parties hereto with respect to the subject matter contained herein and may be amended only by a written instrument executed by all of the parties hereto, or their respective heirs, successors, personal representatives and assigns. There are no restrictions, promises, warranties, covenants or undertaking other than those expressly set forth herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**17.** **<u>Governing Law</u>.** This Agreement shall be construed under and be governed by the laws of the State of Nevada without regard to principles of conflict of laws. Any action, claim or proceeding brought by any party hereunder shall be commenced exclusively in the courts of Nevada. The parties hereto each hereby irrevocably and unconditionally consent to the exclusive jurisdiction and venue of such courts in any action, claim or proceeding brought under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**18.** **<u>Headings</u>**. Headings are inserted for convenience and do not form a part of the Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**19.** **<u>Company Deposits</u>:** Any and all amounts currently on deposit for the benefit of the Company for utility services, insurance, rent etc., are and shall remain the sole property of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**20.** **<u>Severability</u>:** In the event that any of the provisions, or portions thereof, of this Agreement are held to be unenforceable or invalid by any court of competent jurisdiction, the validity and enforceability of the remaining provisions, or portions thereof, shall not be affected thereby and effect shall be given to the intent manifested by the provisions, or portions thereof, held to be enforceable and valid.

**IN WITNESS WHEREOF**, Members and Buyer have caused this Agreement to be executed in their respective names, in person or by their authorized officers, as of the day and year first above written.

---

| | |
|:---|:---|
| **Members:** | **Buyer:** |
| **Vincent Napolitano** | **FAVO Capital, Inc.** |
| /s/ Vincent Napolitano |  |
|  | By: Vincent Napolitano, CEO |
| **Shaun Quin** | /s/ Vincent Napolitano |
| /s/ Shaun Quin |  |
| **Company:**  |  |
| **FAVO Group LLC** |  |
| By: Shaun Quin |  |
| /s/ Shaun Quin |  |
| **Acknowledged by Third Party Investor:** |  |
| **Forfront Capital, LLC** |  |
| By: Nathaniel Tsang Mang Kin |  |
| /s/ Nathaniel Tsang Mang Kin |  |

---

ANNEX A – INSTALLMENT SALE

**Based on the independent valuation of FAVO Group LLC (Attached – Annex B) the following has been determined.**

**Purchase Price:**

**$5,000,000.00 (Five Million Dollars)**

**Cash Portion:**

**49% - $2,450,000 (Two Million, Four Hundred and Fifty Thousand Dollars)**

**Debt Portion: (Installment Sale)**

**51% - $2,550,000 (Two Million, Five hundred and Fifty Thousand Dollars)**

ANNEX B -

VALUATION

## Exhibit 2.5

**<u>MEMBERSHIP INTEREST PURCHASE AGREEMENT</u>**

**THIS MEMBERSHIP INTEREST PURCHASE AGREEMENT** (hereinafter referred to as the "**Agreement**") is made and entered into on this 30<sup>th</sup> day of May 2023 by and among **FORE Funding CA LLC**, a Delaware limited liability company (hereinafter referred to as the "**Company**"), **Vincent Napolitano** and **Shaun Quin**, individuals (hereinafter referred to collectively as the "**Members**" of the Company) and **FAVO Capital, Inc.**, a Nevada corporation (hereinafter referred to as "**Buyer**").

**<u>W I T N E S S E T H</u>:**

**WHEREAS**, Members own all of the membership interest in the Company;

**WHEREAS**, Buyer desires to purchase one hundred percent (100%) of the membership interest of the Company from the Members (hereinafter referred to as the "**Membership Interest**"); and, Members desire to sell and transfer the Membership Interest to Buyer upon the terms and subject to the conditions hereinafter set forth; and

**NOW, THEREFORE**, in consideration of the mutual promises made herein and the benefits to be derived from this Agreement, the parties hereto do hereby represent, warrant, covenant and agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.** **<u>Recital Incorporation</u>**. The above recitals are true and correct and are hereinafter incorporated herein this Agreement by reference.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.** **<u>Purchase</u>**. On the terms and subject to the conditions and based upon the representations, warranties, covenants and agreements of the parties hereinafter set forth in this Agreement, Buyer hereby agrees to purchase from the Members and (i) the Company and (ii) the Members hereby agree to sell and deliver to Buyer the Membership Interest. The Company and the Members shall also deliver, or fully and successfully assign all management agreements and all other material agreements (the "**Contracts**") to Buyer upon the purchase.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.** **<u>Purchase Price</u>.** The purchase price shall be as set forth on <u>Annex A</u>, attached hereto (the "**Purchase Price**"), and paid as per <u>Annex A</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.**  **<u>Closing</u>** .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The closing hereunder will take place at the offices of the Buyers whose address is 1025 Old Country Road, Suite 421E, Westbury, NY 11590 on or before May 31<sup>st</sup>, 2023, at 10:45 AM or such other date and time as the parties hereto may mutually agree to in writing. Such closing is hereinafter and hereinbefore sometimes referred to as the "**Closing**" and such time and date are hereinafter and herein before sometimes referred to as the "**Closing Date**".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) At the Closing:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Members shall deliver to Buyer (i) an assignment of the Membership Interest of the Company and an amended and restated operating agreement of the Company (the "**Operating Agreement**"), together with such endorsements, assignments and other instruments as, in the opinion of counsel to Buyer, are necessary for the purpose of vesting in Buyer good and valid title to the Membership Interest free and clear of all liens, charges and encumbrances, and (ii) proof of assignment of the Contracts; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Buyer shall deliver the Purchase Price to the Members, pro- rata.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.** **<u>Representations, Covenants, Agreements and Warranties by Members and the Company</u>.** The Members and the Company hereby warrant and represent as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Members and the Company have and will have at the Closing, full, lawful power and authority to enter into and to carry out the terms of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Neither the execution nor delivery of this Agreement, nor the performance of Members or the Company in consummating the transactions contemplated by this Agreement, will (1) conflict with or result in a violation or breach of, or constitute default under, any term or provision of any agreement or instrument to which Members or the Company is a party or by which Members or the Company is bound, or (2) result in the imposition of any lien, encumbrance, charge or claim upon the Membership Interest; and Members and the Company have full power and authority to carry out all the terms, conditions and provisions of the transactions contemplated by this Agreement without the consent of any other person not a party hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) No consent, approval or authorization of, or designation, declaration or filing, with any governmental authority is required in connection with the execution or delivery of this Agreement by Members or the Company or the consummation by Members or the Company of the transaction contemplated hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) To the best of Members' knowledge, there are no judgments, liens, actions, suits, proceedings or investigations pending or in process that could materially affect Members' or the Company's right to enter into and consummate the transactions contemplated by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Buyer will have legal title to the Membership Interest, free and clear of all liens, claims, pledges or encumbrances of any kind, nature or description arising by, through or under the Members, with full and unrestricted legal power, authority and right to enter into this Agreement and to transfer and deliver the Membership Interest to Buyer pursuant hereto, and upon delivery of the Membership Interest to Buyer at the Closing, Buyer will be the owner of such Membership Interest and receive legal title to such Membership Interest, free and clear of all liens,

claims, pledges or encumbrances of any kind, nature or description arising by, through or under the Members.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The Company has full power and authority to operate its business in accordance with the Operating Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) The Company is a limited liability company duly organized, validly existing and (to the best of Members' knowledge) in good standing under the laws of the jurisdiction of its organization, and has all requisite power to own, lease and operate its properties and to carry on its business as now being conducted. The Membership Interest constitutes one hundred percent (100%) of the Members' right, title and interest in and to the Company. Members has not created, and is not aware of, any outstanding options, warrants, other securities, agreements or commitments pursuant to which any person has or may have the rights to acquire any or all of the Membership Interest or any other securities or any evidences of indebtedness of the Company, and to Members' knowledge there are no existing agreements or arrangements which require or permit any of the Membership Interest to be voted by or at the direction of anyone other than the record owner thereof, except as previously disclosed to the Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) To the best of Members' knowledge, no action or proceeding at law or in equity is pending against the Company or any of the Company's assets before any federal or state court or governmental commission, and no such proceeding is pending in arbitration or by or before any administrative agency wherein an unfavorable judgment, decision, ruling or finding would adversely affect the business, operations, assets, condition, financial or otherwise, of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) EXCEPT AS EXPRESSLY SET FORTH IN THIS PARAGRAPH 5, MEMBERS MAKE NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO THE MEMBERSHIP INTEREST OR THE BUSINESS, AFFAIRS, FINANCIAL CONDITION, ASSETS, LIABILITIES, MANAGEMENT, RISKS OR OPERATIONS OF THE COMPANY AND ITS BUSINESS. MEMBERS EXPRESSLY DISCLAIMS ANY AND ALL SUCH REPRESENTATIONS AND WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO THE WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.** **<u>Representations, Covenants, Agreements and Warranties by Buyer</u>.** Buyer hereby represents and warrants as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Buyer has, and will have at the Closing, full lawful power and authority to enter into and to carry out the terms of, and all transactions contemplated by, this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Neither the execution nor delivery of this Agreement, nor the performance by Buyer of the transactions contemplated by this Agreement will (i) conflict with or result in a

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) No consent, approval or authorization of, or designation, declaration or filing, with any governmental authority is required in connection with the execution or delivery of this Agreement by Buyer or the consummation by Buyer of the transaction contemplated hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Buyer has not relied on any business representations or warranties of the Members regarding the Company or Buyer's purchase of the Membership Interest and, together with Buyer's advisors, Buyer has the requisite knowledge and experience to understand the risks involved in the transactions contemplated by this Agreement. Buyer is thoroughly familiar with the business, affairs, financial condition, assets, liabilities, management, risks and operations of the Company and its business, and except for Members' warranties set forth in Paragraph 5 of this Agreement, Buyer acknowledges and agrees that Buyer is acquiring the Membership Interest "AS IS", "WHERE IS" and "WITH ALL FAULTS".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The Buyer is acquiring the Membership Interest for Buyer's own account for investment and not with a view to the distribution or with the present intention of selling, assigning or otherwise transferring any thereof. Buyer understands that the Membership Interest has not been registered under the Securities Act of 1933, as amended, and may not be sold, assigned or otherwise transferred without registration thereunder unless such sale, assignment or transfer does not involve a transaction requiring registration under the Securities Act of 1933, as amended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.**  **<u>Members' Indemnity</u>.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Members, hereby agrees to defend, indemnify and hold Buyer (hereinafter referred to as the "**Indemnitee**"), harmless from and against any damages, liabilities, losses and expenses (including but not limited to reasonable attorneys' fees) which may be sustained or suffered by the Indemnitee as the result of any action, claim, or proceeding whatsoever arising out of, or based upon, or by reason of Members' past operation of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Indemnitee shall give prompt written notice to Members of each claim for indemnification hereunder specifying the amount and nature of the claim, and of any matter which is likely to give rise to an indemnification claim. Indemnitee has the right to participate at its own expense in the defense of any such matter or its settlement, or the Indemnitee may direct Members to take over the defense of such matter. Failure to give timely notice of a matter which may give rise to an indemnification claim shall not affect the rights of any Indemnitee to collect such claims

from Members so long as such failure to so notify Members does not materially or adversely affect Members' ability to defend such claim against a third party. Members, in the defense of any claim or litigation shall not, except with the consent of an Indemnitee, which consent shall not be unreasonably withheld or delayed, consent to entry of any judgment or enter into any settlement by which such Indemnitee is to be bound and which judgment or settlement does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnitee a release from all liability in respect of such claim or litigation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.** **<u>Conditions Precedent to Performance By Buyer</u>**. The obligation of Buyer hereunder to purchase the Membership Interest pursuant to this Agreement is subject to the satisfaction at or prior to the Closing of all of the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Members and the Company shall have performed and complied with all terms, covenants and conditions required by this Agreement to be performed or complied with at or before the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) All representations and warranties of Members and the Company contained in this Agreement shall be true and correct at and as of the Closing, with the same force and effect as if such representations and warranties had been made as of the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.** **<u>Conditions Precedent to Performance by Members and the Company</u>.** The obligation of Members and the Company hereunder to sell the Membership Interest pursuant to this Agreement is subject to the satisfaction, at or prior to the Closing, of all of the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Buyer shall have performed and compiled with all terms, covenants and conditions required by this Agreement to be performed or complied with, at or before the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) All representations and warranties of Buyer contained in this Agreement shall be true and correct at and as of the Closing with the same force and effect as if such representations and warranties had been made as of the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) All action, proceedings, instruments and documents required or taken in connection with or to carry out the transactions contemplated by this Agreement, and all other legal matters, shall have been satisfactory in form and substance to Members' counsel.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Buyer shall have delivered the Purchase Price to the Members, pro- rata.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.** **<u>Brokers</u>**. Buyer represents and warrants to Members, and Members represent and warrant to Buyer, that the transactions contemplated by this Agreement have been and shall be carried out by the parties directly with each other and in such a manner as not to give rise to any valid claims against any of the parties for a brokerage commission, finder's fee or other like payment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.** **<u>Expenses</u>**. Buyer and Members will each pay the fee and expenses of their respective counsel and accountants.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**12.** **<u>Survival</u>**<u>.</u> All representations, warranties, covenants and indemnities made by any party to this Agreement in connection with the transactions contemplated hereby, or in any exhibit, schedule, certificate, list or other document delivered pursuant hereto, shall survive the Closing for a period of one (1) year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**13.** **<u>Notices</u>**. All notice and communications to any party required hereunder shall be in writing and shall be delivered to such party at his, her or its address set forth at the beginning of this Agreement, or to such other address as such party may designate by notice given hereunder. Any notices and communications which are mailed, shall be sent by registered or certified first- class mail, postage prepaid.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**14.** **<u>Assignment</u>**. On or before the Closing Date, no party may assign his, her or its rights, duties or obligations under this Agreement. After the Closing, the terms, provisions, covenants and conditions of this Agreement shall bind and benefit the parties hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**15.** **<u>Counterparts</u>**. This Agreement may be executed in two or more counterparts, each of which, when so executed and delivered, shall be an original instrument, but such counterparts, together, shall constitute a single agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**16.** **<u>Entire Agreement and Amendments</u>**. This Agreement, including the exhibits, schedules and certificates referred to herein which are a part hereof, contains the entire understanding of the parties hereto with respect to the subject matter contained herein and may be amended only by a written instrument executed by all of the parties hereto, or their respective heirs, successors, personal representatives and assigns. There are no restrictions, promises, warranties, covenants or undertaking other than those expressly set forth herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**17.** **<u>Governing Law</u>.** This Agreement shall be construed under and be governed by the laws of the State of Nevada without regard to principles of conflict of laws. Any action, claim or proceeding brought by any party hereunder shall be commenced exclusively in the courts of Nevada. The parties hereto each hereby irrevocably and unconditionally consent to the exclusive jurisdiction and venue of such courts in any action, claim or proceeding brought under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**18.** **<u>Headings</u>**. Headings are inserted for convenience and do not form a part of the Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**19.** **<u>Company Deposits</u>:** Any and all amounts currently on deposit for the benefit of the Company for utility services, insurance, rent etc., are and shall remain the sole property of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**20.** **<u>Severability</u>:** In the event that any of the provisions, or portions thereof, of this Agreement are held to be unenforceable or invalid by any court of competent jurisdiction, the validity and enforceability of the remaining provisions, or portions thereof, shall not be affected thereby and effect shall be given to the intent manifested by the provisions, or portions thereof, held to be enforceable and valid.

**IN WITNESS WHEREOF**, Members and Buyer have caused this Agreement to be executed in their respective names, in person or by their authorized officers, as of the day and year first above written.

---

| | |
|:---|:---|
| **Members:** | **Buyer:** |
| **Vincent Napolitano** | **FAVO Capital, Inc.** |
| /s/ Vincent Napolitano |  |
|  | By: Vincent Napolitano, CEO |
| **Shaun Quin** | /s/ Vincent Napolitano |
| /s/ Shaun Quin |  |
| **Company:**  |  |
| **FORE Funding CA LLC** |  |
| By: Shaun Quin |  |
| /s/ Shaun Quin |  |
| **Acknowledged by Third Party Investor:** |  |
| **Forfront Capital, LLC** |  |
| By: Nathaniel Tsang Mang Kin |  |
| /s/ Nathaniel Tsang Mang Kin |  |

---

ANNEX A

**Based on the independent valuation of FORE Funding CA LLC (Attached – Annex B) the following has been determined.**

**Purchase Price:**

**$0.00**

**FORE Funding CA LLC forms part of FORE Funding LLC and is Managed by FAVO GROUP LLC.**

ANNEX B -

VALUATION

## Exhibit 2.6

**<u>MEMBERSHIP INTEREST PURCHASE AGREEMENT</u>**

**THIS MEMBERSHIP INTEREST PURCHASE AGREEMENT** (hereinafter referred to as the "**Agreement**") is made and entered into on this 30<sup>th</sup> day of May 2023 by and among **FORE Funding LLC**, a Delaware limited liability company (hereinafter referred to as the "**Company**"), **Vincent Napolitano** and **Shaun Quin**, individuals (hereinafter referred to collectively as the "**Members**" of the Company) and **FAVO Capital, Inc.**, a Nevada corporation (hereinafter referred to as "**Buyer**").

**<u>W I T N E S S E T H</u>:**

**WHEREAS**, Members own all of the membership interest in the Company;

**WHEREAS**, Buyer desires to purchase one hundred percent (100%) of the membership interest of the Company from the Members (hereinafter referred to as the "**Membership Interest**"); and, Members desire to sell and transfer the Membership Interest to Buyer upon the terms and subject to the conditions hereinafter set forth; and

**NOW, THEREFORE**, in consideration of the mutual promises made herein and the benefits to be derived from this Agreement, the parties hereto do hereby represent, warrant, covenant and agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.** **<u>Recital Incorporation</u>**. The above recitals are true and correct and are hereinafter incorporated herein this Agreement by reference.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.** **<u>Purchase</u>**. On the terms and subject to the conditions and based upon the representations, warranties, covenants and agreements of the parties hereinafter set forth in this Agreement, Buyer hereby agrees to purchase from the Members and (i) the Company and (ii) the Members hereby agree to sell and deliver to Buyer the Membership Interest. The Company and the Members shall also deliver, or fully and successfully assign all management agreements and all other material agreements (the "**Contracts**") to Buyer upon the purchase.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.** **<u>Purchase Price</u>.** The purchase price shall be as set forth on <u>Annex A</u>, attached hereto (the "**Purchase Price**"), and paid as per <u>Annex A</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.**  **<u>Closing</u>** .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The closing hereunder will take place at the offices of the Buyers whose address is 1025 Old Country Road, Suite 421E, Westbury, NY 11590 on or before May 31<sup>st</sup>, 2023, at 10:45 AM or such other date and time as the parties hereto may mutually agree to in writing. Such closing is hereinafter and hereinbefore sometimes referred to as the "**Closing**" and such time and date are hereinafter and herein before sometimes referred to as the "**Closing Date**".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) At the Closing:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Members shall deliver to Buyer (i) an assignment of the Membership Interest of the Company and an amended and restated operating agreement of the Company (the "**Operating Agreement**"), together with such endorsements, assignments and other instruments as, in the opinion of counsel to Buyer, are necessary for the purpose of vesting in Buyer good and valid title to the Membership Interest free and clear of all liens, charges and encumbrances, and (ii) proof of assignment of the Contracts; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Buyer shall deliver the Purchase Price to the Members, pro- rata.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.** **<u>Representations, Covenants, Agreements and Warranties by Members and the Company</u>.** The Members and the Company hereby warrant and represent as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Members and the Company have and will have at the Closing, full, lawful power and authority to enter into and to carry out the terms of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Neither the execution nor delivery of this Agreement, nor the performance of Members or the Company in consummating the transactions contemplated by this Agreement, will (1) conflict with or result in a violation or breach of, or constitute default under, any term or provision of any agreement or instrument to which Members or the Company is a party or by which Members or the Company is bound, or (2) result in the imposition of any lien, encumbrance, charge or claim upon the Membership Interest; and Members and the Company have full power and authority to carry out all the terms, conditions and provisions of the transactions contemplated by this Agreement without the consent of any other person not a party hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) No consent, approval or authorization of, or designation, declaration or filing, with any governmental authority is required in connection with the execution or delivery of this Agreement by Members or the Company or the consummation by Members or the Company of the transaction contemplated hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) To the best of Members' knowledge, there are no judgments, liens, actions, suits, proceedings or investigations pending or in process that could materially affect Members' or the Company's right to enter into and consummate the transactions contemplated by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Buyer will have legal title to the Membership Interest, free and clear of all liens, claims, pledges or encumbrances of any kind, nature or description arising by, through or under the Members, with full and unrestricted legal power, authority and right to enter into this Agreement and to transfer and deliver the Membership Interest to Buyer pursuant hereto, and upon delivery of the Membership Interest to Buyer at the Closing, Buyer will be the owner of such Membership Interest and receive legal title to such Membership Interest, free and clear of all liens,

claims, pledges or encumbrances of any kind, nature or description arising by, through or under the Members.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The Company has full power and authority to operate its business in accordance with the Operating Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) The Company is a limited liability company duly organized, validly existing and (to the best of Members' knowledge) in good standing under the laws of the jurisdiction of its organization, and has all requisite power to own, lease and operate its properties and to carry on its business as now being conducted. The Membership Interest constitutes one hundred percent (100%) of the Members' right, title and interest in and to the Company. Members has not created, and is not aware of, any outstanding options, warrants, other securities, agreements or commitments pursuant to which any person has or may have the rights to acquire any or all of the Membership Interest or any other securities or any evidences of indebtedness of the Company, and to Members' knowledge there are no existing agreements or arrangements which require or permit any of the Membership Interest to be voted by or at the direction of anyone other than the record owner thereof, except as previously disclosed to the Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) To the best of Members' knowledge, no action or proceeding at law or in equity is pending against the Company or any of the Company's assets before any federal or state court or governmental commission, and no such proceeding is pending in arbitration or by or before any administrative agency wherein an unfavorable judgment, decision, ruling or finding would adversely affect the business, operations, assets, condition, financial or otherwise, of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) EXCEPT AS EXPRESSLY SET FORTH IN THIS PARAGRAPH 5, MEMBERS MAKE NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO THE MEMBERSHIP INTEREST OR THE BUSINESS, AFFAIRS, FINANCIAL CONDITION, ASSETS, LIABILITIES, MANAGEMENT, RISKS OR OPERATIONS OF THE COMPANY AND ITS BUSINESS. MEMBERS EXPRESSLY DISCLAIMS ANY AND ALL SUCH REPRESENTATIONS AND WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO THE WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.** **<u>Representations, Covenants, Agreements and Warranties by Buyer</u>.** Buyer hereby represents and warrants as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Buyer has, and will have at the Closing, full lawful power and authority to enter into and to carry out the terms of, and all transactions contemplated by, this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Neither the execution nor delivery of this Agreement, nor the performance by Buyer of the transactions contemplated by this Agreement will (i) conflict with or result in a

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) No consent, approval or authorization of, or designation, declaration or filing, with any governmental authority is required in connection with the execution or delivery of this Agreement by Buyer or the consummation by Buyer of the transaction contemplated hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Buyer has not relied on any business representations or warranties of the Members regarding the Company or Buyer's purchase of the Membership Interest and, together with Buyer's advisors, Buyer has the requisite knowledge and experience to understand the risks involved in the transactions contemplated by this Agreement. Buyer is thoroughly familiar with the business, affairs, financial condition, assets, liabilities, management, risks and operations of the Company and its business, and except for Members' warranties set forth in Paragraph 5 of this Agreement, Buyer acknowledges and agrees that Buyer is acquiring the Membership Interest "AS IS", "WHERE IS" and "WITH ALL FAULTS".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The Buyer is acquiring the Membership Interest for Buyer's own account for investment and not with a view to the distribution or with the present intention of selling, assigning or otherwise transferring any thereof. Buyer understands that the Membership Interest has not been registered under the Securities Act of 1933, as amended, and may not be sold, assigned or otherwise transferred without registration thereunder unless such sale, assignment or transfer does not involve a transaction requiring registration under the Securities Act of 1933, as amended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.**  **<u>Members' Indemnity</u>.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Members, hereby agrees to defend, indemnify and hold Buyer (hereinafter referred to as the "**Indemnitee**"), harmless from and against any damages, liabilities, losses and expenses (including but not limited to reasonable attorneys' fees) which may be sustained or suffered by the Indemnitee as the result of any action, claim, or proceeding whatsoever arising out of, or based upon, or by reason of Members' past operation of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Indemnitee shall give prompt written notice to Members of each claim for indemnification hereunder specifying the amount and nature of the claim, and of any matter which is likely to give rise to an indemnification claim. Indemnitee has the right to participate at its own expense in the defense of any such matter or its settlement, or the Indemnitee may direct Members to take over the defense of such matter. Failure to give timely notice of a matter which may give rise to an indemnification claim shall not affect the rights of any Indemnitee to collect such claims

from Members so long as such failure to so notify Members does not materially or adversely affect Members' ability to defend such claim against a third party. Members, in the defense of any claim or litigation shall not, except with the consent of an Indemnitee, which consent shall not be unreasonably withheld or delayed, consent to entry of any judgment or enter into any settlement by which such Indemnitee is to be bound and which judgment or settlement does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnitee a release from all liability in respect of such claim or litigation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.** **<u>Conditions Precedent to Performance By Buyer</u>**. The obligation of Buyer hereunder to purchase the Membership Interest pursuant to this Agreement is subject to the satisfaction at or prior to the Closing of all of the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Members and the Company shall have performed and complied with all terms, covenants and conditions required by this Agreement to be performed or complied with at or before the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) All representations and warranties of Members and the Company contained in this Agreement shall be true and correct at and as of the Closing, with the same force and effect as if such representations and warranties had been made as of the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.** **<u>Conditions Precedent to Performance by Members and the Company</u>.** The obligation of Members and the Company hereunder to sell the Membership Interest pursuant to this Agreement is subject to the satisfaction, at or prior to the Closing, of all of the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Buyer shall have performed and compiled with all terms, covenants and conditions required by this Agreement to be performed or complied with, at or before the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) All representations and warranties of Buyer contained in this Agreement shall be true and correct at and as of the Closing with the same force and effect as if such representations and warranties had been made as of the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) All action, proceedings, instruments and documents required or taken in connection with or to carry out the transactions contemplated by this Agreement, and all other legal matters, shall have been satisfactory in form and substance to Members' counsel.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Buyer shall have delivered the Purchase Price to the Members, pro- rata.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.** **<u>Brokers</u>**. Buyer represents and warrants to Members, and Members represent and warrant to Buyer, that the transactions contemplated by this Agreement have been and shall be carried out by the parties directly with each other and in such a manner as not to give rise to any valid claims against any of the parties for a brokerage commission, finder's fee or other like payment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.** **<u>Expenses</u>**. Buyer and Members will each pay the fee and expenses of their respective counsel and accountants.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**12.** **<u>Survival</u>**<u>.</u> All representations, warranties, covenants and indemnities made by any party to this Agreement in connection with the transactions contemplated hereby, or in any exhibit, schedule, certificate, list or other document delivered pursuant hereto, shall survive the Closing for a period of one (1) year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**13.** **<u>Notices</u>**. All notice and communications to any party required hereunder shall be in writing and shall be delivered to such party at his, her or its address set forth at the beginning of this Agreement, or to such other address as such party may designate by notice given hereunder. Any notices and communications which are mailed, shall be sent by registered or certified first- class mail, postage prepaid.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**14.** **<u>Assignment</u>**. On or before the Closing Date, no party may assign his, her or its rights, duties or obligations under this Agreement. After the Closing, the terms, provisions, covenants and conditions of this Agreement shall bind and benefit the parties hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**15.** **<u>Counterparts</u>**. This Agreement may be executed in two or more counterparts, each of which, when so executed and delivered, shall be an original instrument, but such counterparts, together, shall constitute a single agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**16.** **<u>Entire Agreement and Amendments</u>**. This Agreement, including the exhibits, schedules and certificates referred to herein which are a part hereof, contains the entire understanding of the parties hereto with respect to the subject matter contained herein and may be amended only by a written instrument executed by all of the parties hereto, or their respective heirs, successors, personal representatives and assigns. There are no restrictions, promises, warranties, covenants or undertaking other than those expressly set forth herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**17.** **<u>Governing Law</u>.** This Agreement shall be construed under and be governed by the laws of the State of Nevada without regard to principles of conflict of laws. Any action, claim or proceeding brought by any party hereunder shall be commenced exclusively in the courts of Nevada. The parties hereto each hereby irrevocably and unconditionally consent to the exclusive jurisdiction and venue of such courts in any action, claim or proceeding brought under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**18.** **<u>Headings</u>**. Headings are inserted for convenience and do not form a part of the Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**19.** **<u>Company Deposits</u>:** Any and all amounts currently on deposit for the benefit of the Company for utility services, insurance, rent etc., are and shall remain the sole property of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**20.** **<u>Severability</u>:** In the event that any of the provisions, or portions thereof, of this Agreement are held to be unenforceable or invalid by any court of competent jurisdiction, the validity and enforceability of the remaining provisions, or portions thereof, shall not be affected thereby and effect shall be given to the intent manifested by the provisions, or portions thereof, held to be enforceable and valid.

**IN WITNESS WHEREOF**, Members and Buyer have caused this Agreement to be executed in their respective names, in person or by their authorized officers, as of the day and year first above written.

---

| | |
|:---|:---|
| **Members:** | **Buyer:** |
| **Vincent Napolitano** | **FAVO Capital, Inc.** |
| /s/ Vincent Napolitano |  |
|  | By: Vincent Napolitano, CEO |
| **Shaun Quin** | /s/ Vincent Napolitano |
| /s/ Shaun Quin |  |
| **Company:**  |  |
| **FAVO Funding LLC** |  |
| By: Shaun Quin |  |
| /s/ Shaun Quin |  |
| **Acknowledged by Third Party Investor:** |  |
| **Forfront Capital, LLC** |  |
| By: Nathaniel Tsang Mang Kin |  |
| /s/ Nathaniel Tsang Mang Kin |  |

---

ANNEX A

**Based on the independent valuation of FORE Funding LLC (Attached - Annex B) the following has been determined.**

**Purchase Price:**

**$4,200,000.00 (Four Million Two Hundred Thousand Dollars)**

**Cash Portion:**

**49% - $2,050,000 (Two Million and Fifty Thousand Dollars)**

**Debt Portion: (Installment Sale)**

**51% - $2,150,000 (Two Million, One Hundred and Fifty Thousand Dollars)**

ANNEX B - VALUATION

## Exhibit 2.7

**<u>MEMBERSHIP INTEREST PURCHASE AGREEMENT</u>**

**THIS MEMBERSHIP INTEREST PURCHASE AGREEMENT** (hereinafter referred to as the "**Agreement**") is made and entered into on this 30<sup>th</sup> day of May 2023 by and among **Honeycomb Sub Fund LLC**, a Delaware limited liability company (hereinafter referred to as the "**Company**"), **Vincent Napolitano** and **Shaun Quin**, individuals (hereinafter referred to collectively as the "**Members**" of the Company) and **FAVO Capital, Inc.**, a Nevada corporation (hereinafter referred to as "**Buyer**").

**<u>W I T N E S S E T H</u>:**

**WHEREAS**, Members own all of the membership interest in the Company;

**WHEREAS**, Buyer desires to purchase one hundred percent (100%) of the membership interest of the Company from the Members (hereinafter referred to as the "**Membership Interest**"); and, Members desire to sell and transfer the Membership Interest to Buyer upon the terms and subject to the conditions hereinafter set forth; and

**NOW, THEREFORE**, in consideration of the mutual promises made herein and the benefits to be derived from this Agreement, the parties hereto do hereby represent, warrant, covenant and agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.** **<u>Recital Incorporation</u>**. The above recitals are true and correct and are hereinafter incorporated herein this Agreement by reference.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.** **<u>Purchase</u>**. On the terms and subject to the conditions and based upon the representations, warranties, covenants and agreements of the parties hereinafter set forth in this Agreement, Buyer hereby agrees to purchase from the Members and (i) the Company and (ii) the Members hereby agree to sell and deliver to Buyer the Membership Interest. The Company and the Members shall also deliver, or fully and successfully assign all management agreements and all other material agreements (the "**Contracts**") to Buyer upon the purchase.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.** **<u>Purchase Price</u>.** The purchase price shall be as set forth on <u>Annex A</u>, attached hereto (the "**Purchase Price**"), and paid as per <u>Annex A</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.**  **<u>Closing</u>** .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The closing hereunder will take place at the offices of the Buyers whose address is 1025 Old Country Road, Suite 421E, Westbury, NY 11590 on or before May 31<sup>st</sup>, 2023, at 10:45 AM or such other date and time as the parties hereto may mutually agree to in writing. Such closing is hereinafter and hereinbefore sometimes referred to as the "**Closing**" and such time and date are hereinafter and herein before sometimes referred to as the "**Closing Date**".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) At the Closing:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Members shall deliver to Buyer (i) an assignment of the Membership Interest of the Company and an amended and restated operating agreement of the Company (the "**Operating Agreement**"), together with such endorsements, assignments and other instruments as, in the opinion of counsel to Buyer, are necessary for the purpose of vesting in Buyer good and valid title to the Membership Interest free and clear of all liens, charges and encumbrances, and (ii) proof of assignment of the Contracts; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Buyer shall deliver the Purchase Price to the Members, pro- rata.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.** **<u>Representations, Covenants, Agreements and Warranties by Members and the Company</u>.** The Members and the Company hereby warrant and represent as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Members and the Company have and will have at the Closing, full, lawful power and authority to enter into and to carry out the terms of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Neither the execution nor delivery of this Agreement, nor the performance of Members or the Company in consummating the transactions contemplated by this Agreement, will (1) conflict with or result in a violation or breach of, or constitute default under, any term or provision of any agreement or instrument to which Members or the Company is a party or by which Members or the Company is bound, or (2) result in the imposition of any lien, encumbrance, charge or claim upon the Membership Interest; and Members and the Company have full power and authority to carry out all the terms, conditions and provisions of the transactions contemplated by this Agreement without the consent of any other person not a party hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) No consent, approval or authorization of, or designation, declaration or filing, with any governmental authority is required in connection with the execution or delivery of this Agreement by Members or the Company or the consummation by Members or the Company of the transaction contemplated hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) To the best of Members' knowledge, there are no judgments, liens, actions, suits, proceedings or investigations pending or in process that could materially affect Members' or the Company's right to enter into and consummate the transactions contemplated by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Buyer will have legal title to the Membership Interest, free and clear of all liens, claims, pledges or encumbrances of any kind, nature or description arising by, through or under the Members, with full and unrestricted legal power, authority and right to enter into this Agreement and to transfer and deliver the Membership Interest to Buyer pursuant hereto, and upon delivery of the Membership Interest to Buyer at the Closing, Buyer will be the owner of such Membership Interest and receive legal title to such Membership Interest, free and clear of all liens,

claims, pledges or encumbrances of any kind, nature or description arising by, through or under the Members.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The Company has full power and authority to operate its business in accordance with the Operating Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) The Company is a limited liability company duly organized, validly existing and (to the best of Members' knowledge) in good standing under the laws of the jurisdiction of its organization, and has all requisite power to own, lease and operate its properties and to carry on its business as now being conducted. The Membership Interest constitutes one hundred percent (100%) of the Members' right, title and interest in and to the Company. Members has not created, and is not aware of, any outstanding options, warrants, other securities, agreements or commitments pursuant to which any person has or may have the rights to acquire any or all of the Membership Interest or any other securities or any evidences of indebtedness of the Company, and to Members' knowledge there are no existing agreements or arrangements which require or permit any of the Membership Interest to be voted by or at the direction of anyone other than the record owner thereof, except as previously disclosed to the Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) To the best of Members' knowledge, no action or proceeding at law or in equity is pending against the Company or any of the Company's assets before any federal or state court or governmental commission, and no such proceeding is pending in arbitration or by or before any administrative agency wherein an unfavorable judgment, decision, ruling or finding would adversely affect the business, operations, assets, condition, financial or otherwise, of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) EXCEPT AS EXPRESSLY SET FORTH IN THIS PARAGRAPH 5, MEMBERS MAKE NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO THE MEMBERSHIP INTEREST OR THE BUSINESS, AFFAIRS, FINANCIAL CONDITION, ASSETS, LIABILITIES, MANAGEMENT, RISKS OR OPERATIONS OF THE COMPANY AND ITS BUSINESS. MEMBERS EXPRESSLY DISCLAIMS ANY AND ALL SUCH REPRESENTATIONS AND WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO THE WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.** **<u>Representations, Covenants, Agreements and Warranties by Buyer</u>.** Buyer hereby represents and warrants as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Buyer has, and will have at the Closing, full lawful power and authority to enter into and to carry out the terms of, and all transactions contemplated by, this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Neither the execution nor delivery of this Agreement, nor the performance by Buyer of the transactions contemplated by this Agreement will (i) conflict with or result in a

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) No consent, approval or authorization of, or designation, declaration or filing, with any governmental authority is required in connection with the execution or delivery of this Agreement by Buyer or the consummation by Buyer of the transaction contemplated hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Buyer has not relied on any business representations or warranties of the Members regarding the Company or Buyer's purchase of the Membership Interest and, together with Buyer's advisors, Buyer has the requisite knowledge and experience to understand the risks involved in the transactions contemplated by this Agreement. Buyer is thoroughly familiar with the business, affairs, financial condition, assets, liabilities, management, risks and operations of the Company and its business, and except for Members' warranties set forth in Paragraph 5 of this Agreement, Buyer acknowledges and agrees that Buyer is acquiring the Membership Interest "AS IS", "WHERE IS" and "WITH ALL FAULTS".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The Buyer is acquiring the Membership Interest for Buyer's own account for investment and not with a view to the distribution or with the present intention of selling, assigning or otherwise transferring any thereof. Buyer understands that the Membership Interest has not been registered under the Securities Act of 1933, as amended, and may not be sold, assigned or otherwise transferred without registration thereunder unless such sale, assignment or transfer does not involve a transaction requiring registration under the Securities Act of 1933, as amended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.**  **<u>Members' Indemnity</u>.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Members, hereby agrees to defend, indemnify and hold Buyer (hereinafter referred to as the "**Indemnitee**"), harmless from and against any damages, liabilities, losses and expenses (including but not limited to reasonable attorneys' fees) which may be sustained or suffered by the Indemnitee as the result of any action, claim, or proceeding whatsoever arising out of, or based upon, or by reason of Members' past operation of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Indemnitee shall give prompt written notice to Members of each claim for indemnification hereunder specifying the amount and nature of the claim, and of any matter which is likely to give rise to an indemnification claim. Indemnitee has the right to participate at its own expense in the defense of any such matter or its settlement, or the Indemnitee may direct Members to take over the defense of such matter. Failure to give timely notice of a matter which may give rise to an indemnification claim shall not affect the rights of any Indemnitee to collect such claims

from Members so long as such failure to so notify Members does not materially or adversely affect Members' ability to defend such claim against a third party. Members, in the defense of any claim or litigation shall not, except with the consent of an Indemnitee, which consent shall not be unreasonably withheld or delayed, consent to entry of any judgment or enter into any settlement by which such Indemnitee is to be bound and which judgment or settlement does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnitee a release from all liability in respect of such claim or litigation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.** **<u>Conditions Precedent to Performance By Buyer</u>**. The obligation of Buyer hereunder to purchase the Membership Interest pursuant to this Agreement is subject to the satisfaction at or prior to the Closing of all of the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Members and the Company shall have performed and complied with all terms, covenants and conditions required by this Agreement to be performed or complied with at or before the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) All representations and warranties of Members and the Company contained in this Agreement shall be true and correct at and as of the Closing, with the same force and effect as if such representations and warranties had been made as of the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.** **<u>Conditions Precedent to Performance by Members and the Company</u>.** The obligation of Members and the Company hereunder to sell the Membership Interest pursuant to this Agreement is subject to the satisfaction, at or prior to the Closing, of all of the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Buyer shall have performed and compiled with all terms, covenants and conditions required by this Agreement to be performed or complied with, at or before the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) All representations and warranties of Buyer contained in this Agreement shall be true and correct at and as of the Closing with the same force and effect as if such representations and warranties had been made as of the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) All action, proceedings, instruments and documents required or taken in connection with or to carry out the transactions contemplated by this Agreement, and all other legal matters, shall have been satisfactory in form and substance to Members' counsel.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Buyer shall have delivered the Purchase Price to the Members, pro- rata.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.** **<u>Brokers</u>**. Buyer represents and warrants to Members, and Members represent and warrant to Buyer, that the transactions contemplated by this Agreement have been and shall be carried out by the parties directly with each other and in such a manner as not to give rise to any valid claims against any of the parties for a brokerage commission, finder's fee or other like payment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.** **<u>Expenses</u>**. Buyer and Members will each pay the fee and expenses of their respective counsel and accountants.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**12.** **<u>Survival</u>**<u>.</u> All representations, warranties, covenants and indemnities made by any party to this Agreement in connection with the transactions contemplated hereby, or in any exhibit, schedule, certificate, list or other document delivered pursuant hereto, shall survive the Closing for a period of one (1) year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**13.** **<u>Notices</u>**. All notice and communications to any party required hereunder shall be in writing and shall be delivered to such party at his, her or its address set forth at the beginning of this Agreement, or to such other address as such party may designate by notice given hereunder. Any notices and communications which are mailed, shall be sent by registered or certified first- class mail, postage prepaid.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**14.** **<u>Assignment</u>**. On or before the Closing Date, no party may assign his, her or its rights, duties or obligations under this Agreement. After the Closing, the terms, provisions, covenants and conditions of this Agreement shall bind and benefit the parties hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**15.** **<u>Counterparts</u>**. This Agreement may be executed in two or more counterparts, each of which, when so executed and delivered, shall be an original instrument, but such counterparts, together, shall constitute a single agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**16.** **<u>Entire Agreement and Amendments</u>**. This Agreement, including the exhibits, schedules and certificates referred to herein which are a part hereof, contains the entire understanding of the parties hereto with respect to the subject matter contained herein and may be amended only by a written instrument executed by all of the parties hereto, or their respective heirs, successors, personal representatives and assigns. There are no restrictions, promises, warranties, covenants or undertaking other than those expressly set forth herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**17.** **<u>Governing Law</u>.** This Agreement shall be construed under and be governed by the laws of the State of Nevada without regard to principles of conflict of laws. Any action, claim or proceeding brought by any party hereunder shall be commenced exclusively in the courts of Nevada. The parties hereto each hereby irrevocably and unconditionally consent to the exclusive jurisdiction and venue of such courts in any action, claim or proceeding brought under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**18.** **<u>Headings</u>**. Headings are inserted for convenience and do not form a part of the Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**19.** **<u>Company Deposits</u>:** Any and all amounts currently on deposit for the benefit of the Company for utility services, insurance, rent etc., are and shall remain the sole property of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**20.** **<u>Severability</u>:** In the event that any of the provisions, or portions thereof, of this Agreement are held to be unenforceable or invalid by any court of competent jurisdiction, the validity and enforceability of the remaining provisions, or portions thereof, shall not be affected thereby and effect shall be given to the intent manifested by the provisions, or portions thereof, held to be enforceable and valid.

**IN WITNESS WHEREOF**, Members and Buyer have caused this Agreement to be executed in their respective names, in person or by their authorized officers, as of the day and year first above written.

---

| | |
|:---|:---|
| **Members:** | **Buyer:** |
| **Vincent Napolitano** | **FAVO Capital, Inc.** |
| /s/ Vincent Napolitano |  |
|  | By: Vincent Napolitano, CEO |
| **Shaun Quin** | /s/ Vincent Napolitano |
| /s/ Shaun Quin |  |
| **Company:**  |  |
| **Honeycomb Sub Fund LLC** |  |
| By: Shaun Quin |  |
| /s/ Shaun Quin |  |
| **Acknowledged by Third Party Investor:** |  |
| **Forfront Capital, LLC** |  |
| By: Nathaniel Tsang Mang Kin |  |
| /s/ Nathaniel Tsang Mang Kin |  |

---

ANNEX A

**Based on the independent valuation of Honeycomb Sub Fund LLC (Attached – Annex B) the following has been determined.**

**Purchase Price:**

**$0.00**

**Honeycomb Sub Fund LLC forms part of FAVO Funding LLC and is Managed by FAVO GROUP LLC.**

ANNEX B - VALUATION

## Exhibit 2.8

**ASSET PURCHASE AGREEMENT**

This ASSET PURCHASE AGREEMENT (this "<u>Agreement</u>"), dated as of December __, 2023, is entered into by and among DBOSS Funding, LLC (dba Simplified Funding), a Florida limited liability company, LendTech CRM Solutions, LLC, a Florida limited liability company and Believe PMF EIRL, a company formed in the Dominican Republic (collectively, the "<u>Companies</u>"), Robin Nadeau-Camus, the sole owner (the "<u>Shareholder</u>") of each of the Companies, and Favo Capital, Inc., a Nevada corporation ("<u>Purchaser</u>"), which includes a wholly owned entity to be formed by Purchaser.

**<u>RECITALS</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. The Companies are engaged in the business of using proprietary software and a call center in the Dominican Republic to offer secured and unsecured financial products and services to clients with funders across the United States (the "<u>Business</u>");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. The Companies desire to sell, and Purchaser desires to purchase, certain assets of the Business for the consideration and on the terms set forth in this Agreement; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. The Shareholder owns all of the issued and outstanding ownership interests of the Companies and recognizes that her agreement to the terms of this Agreement (including <u>Section 5.5</u>) is a material inducement for Purchaser to enter into this Agreement.

**<u>AGREEMENT</u>**

NOW, THEREFORE, in consideration of the representations, warranties, covenants and agreements contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound hereby, the parties agree as follows:

**ARTICLE I**

**SALE AND TRANSFER OF ASSETS; CLOSING**

Section 1.1 <u>Assets To Be Sold</u>. Upon the terms and subject to the conditions set forth in this Agreement, at the Closing, but effective as of the Effective Time, the Companies will sell, convey, assign, transfer and deliver to Purchaser (or a wholly owned entity to be formed by Purchaser), and Purchaser will purchase and acquire from the Companies, free and clear of any Encumbrances, all of the Companies' rights, title and interest in and to the following assets of the Companies related to the Business other than the Excluded Assets:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) all of the Companies' rights under any contracts, commitments, purchase orders and other agreements related to the Business set forth on <u>Schedule 1.1(a)</u> (the "<u>Purchased Contracts</u>");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) all fixed assets and items of machinery, furniture, equipment, supplies and other tangible personal property related to the Business listed on <u>Schedule 1.1(b)</u> (the "<u>Furniture, Fixtures and Equipment</u>");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) all lists and records pertaining to customer accounts (whether past, current or future potential) of the Business, suppliers and distributors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) all claims, deposits, warranties, guarantees, refunds, causes of action, rights of recovery, rights of set-off and rights of recoupment of every kind and nature related to the Business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) all Intellectual Property and all goodwill associated therewith related to the Business, including without limitation any design collections, drawings, specifications, creative materials, trade styles, archives or similar assets, including those items of Intellectual Property listed on <u>Schedule 1.1(e)</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) all licenses and Permits related to the Business, to the extent assignable;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) all insurance and warranty proceeds received after the Closing Date with respect to damage, non-conformance of or loss to the Assets, or with respect to the Assets, or the Assumed Liabilities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) all billed and unbilled accounts receivable and all correspondence with respect thereto, including, without limitation, all trade accounts receivable, notes receivable from customers, retainages and all other obligations from customers, including, without limitation, those items listed on <u>Schedule 1.1(h)</u> (the "<u>Accounts Receivable</u>");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) all prepayments, vendor credits, prepaid expenses and similar assets related to the Business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) all finished goods inventory associated with the Business set forth on <u>Schedule 1.1(j)</u> or having an SKU set forth on <u>Schedule 1.1(j)</u>, but excluding all raw materials and work in process (WIP) (the "<u>Inventory</u>");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) all books, records, ledgers, files, documents, correspondence, lists, studies and reports and other printed or written materials related to the Business and its customers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) all samples of products of the Business and historic testing records;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) assignments or subleases on the lease agreements associated with the Leased Real Property of the Companies: in the Dominican Republic at *C/ Privada #196 esquina Dominicana, Bonao, 42000, Dominican Republic* and Fort Lauderdale, Florida at *4300 N University Drive, Fort Lauderhill, Florida 33351*; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) all goodwill and going concern value with respect to the Business.

The assets set forth in this <u>Section 1.1</u> are all of the assets to be sold to Purchaser pursuant to this Agreement and are referred to herein collectively as the "<u>Assets</u>."

Section 1.2 <u>Excluded Assets</u>. Notwithstanding the foregoing <u>Section 1.1</u>, the following assets are expressly excluded from the purchase and sale contemplated by this Agreement (the "<u>Excluded Assets</u>"):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) cash and cash equivalents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the Companies' rights under or pursuant to this Agreement and agreements entered into pursuant to this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) the Companies' minute books, statutory books and corporate seals;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) all licenses and Permits that are not assignable or do not relate to
the Business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) all rights existing under each Contract set forth on <u>Schedule 1.2(e)</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) all business insurance policies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) all Employee Benefit Plans;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) all Contracts related to Indebtedness; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) all other assets of any kind or nature of the Companies which are not included in the Assets.

Section 1.3 <u>Liabilities.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Assumed Liabilities</u>. On the Closing Date, but effective as of the Effective Time, Purchaser will assume and agree to discharge (i) the accounts payable of the Companies set forth on <u>Schedule 1.3(a)</u> to the extent included in the Closing Working Capital on a dollar- for-dollar basis as finally determined pursuant to <u>Section 1.6</u>, (ii) accrued but unused paid time off to the extent included in the Closing Working Capital on a dollar-for-dollar basis as finally determined pursuant to <u>Section 1.6</u>, and (iii) the obligations of the Companies arising with respect to the period after the Closing pursuant to the Purchased Contracts (the Liabilities in (i), (ii), and (iii), collectively, the "<u>Assumed Liabilities</u>"); <u>provided</u>, <u>however</u>, the Assumed Liabilities do not include Liabilities that are caused by the actions or inactions of the Companies with respect to the Purchased Contracts on or prior to the Closing Date, or Liabilities that are expressly listed as Retained Liabilities

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Retained Liabilities</u>. All Liabilities of the Companies not specifically included in the Assumed Liabilities will remain the sole responsibility of the Companies, will be retained, paid, performed and discharged solely by the Companies, and are expressly not being assumed by Purchaser as Assumed Liabilities (the "<u>Retained Liabilities</u>"). For the avoidance of doubt, the Retained Liabilities will expressly include (without limitation): (i) Liabilities related to Taxes; (ii) all Liabilities related to the Excluded Assets, (iii) the Companies and the Shareholder expenses pursuant to <u>Section 5.4</u> herein, (iv) all Liabilities that are caused by the actions or inactions of the Companies with respect to the Purchased Contracts on or prior to the Closing Date, (v) all product liability, all returns, and all warranty liability with respect to sales made by, or product manufactured by, the Companies, (vi) all Liabilities that arise out of or in connection with any violation of or non-compliance of the Companies with any applicable Laws, (vii) all refunds due to third parties, which obligations were incurred or relate to events that occurred on or prior to the Closing Date; (viii) except as set forth in <u>Section 5.17</u> of this Agreement and except for accrued but unused paid time off to the extent included in the Closing Working Capital on a dollar-for-dollar basis as finally determined pursuant to <u>Section 1.6</u>, any and all Liabilities relating to the Companies' employees, including all payroll related liabilities, including accrued payroll, employee bonuses, commissions, severance or separation pay, and including any stay bonus payable upon or after the Closing, (ix) all Liabilities associated with any Employee Benefit Plan, including all withdrawal Liability, and (x) any other Liabilities of the Companies not specifically included in the Assumed Liabilities.

Section 1.4 <u>Purchase Price; Payment of Purchase Price</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The purchase price for the Assets (the "Purchase Price") shall be equal to $1,650,000 plus the assumption of the Assumed Liabilities, as <u>adjusted</u> by the Working Capital Adjustment as provided in <u>Section 1.6</u> hereof, and shall consist of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) $1,250,000 in restricted common stock of the Purchaser, par value $0.0001 per
share, valued by the parties at $0.25 per share (the "Equity Purchase Price"); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) $400,000 in cash (the "Cash Purchase Price").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) At Closing, the Purchaser will issue 1,000,000 shares of common stock, and will issue 2,000,000 and 2,000,000 shares of common stock, representing the full amount of the Equity Purchase Price, to the Shareholder or the Shareholder's nominee(s) on the first and second anniversary of the Closing, respectively. In the event of Shareholder's death prior to the issuance of any portion of the Equity Purchase Price, all remaining shares shall be issued to Shareholder's estate or as designated in Shareholder's will.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) At Closing, and subject to the conditions set forth in this Agreement, the Cash Purchase Price will be paid by Purchaser by wire transfer of immediately available funds, an aggregate amount (the "<u>Closing Cash Payment</u>") equal to the sum of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the Cash Purchase Price, <u>minus</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) An amount equal to $20,000 (the "Holdback"), <u>plus</u> or <u>minus</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) the amount of the Estimated Working Capital Adjustment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Holdback (less any pending or paid indemnity claims) will be paid to the Companies within five (5) Business Days after the determination of Closing Working Capital becomes final and binding pursuant to the provisions of <u>Section 1.6</u> of this Agreement; <u>provided</u>, <u>however</u>, that if the Closing Working Capital has not become final and binding pursuant to the provisions of <u>Section 1.6</u> of this Agreement because the Companies have notified the Purchaser of an objection to the Closing Working Capital Statement pursuant to <u>Section 1.6(c)(ii)</u> of this Agreement, then if the Holdback (less any pending or paid indemnity claims) exceeds such amount in dispute, Purchaser shall pay such excess to the Companies within five (5) Business Days of the Companies' notice delivered pursuant to <u>Section 1.6(c)(ii)</u>.

Section 1.5 <u>Closing Date</u>. The closing of the purchase and sale of the Assets and the transactions relating thereto (the "<u>Closing</u>") will take place on the later of (i) December , 2023, and (ii) the third (3rd) day (unless such day is not a business day, in which case the Closing will take place on the next business day following such day) following the satisfaction or waiver of all conditions to the Closing set forth in <u>Article IV</u> other than those to be satisfied at the Closing, but subject to their satisfaction or waiver, at the offices of Purchaser, or at such other location, or by electronic communications, including e-mail, portable document format ("<u>PDF</u>") or facsimile, as the parties may agree, on the Closing Date. The date of the Closing is referred to as the "<u>Closing Date</u>." The effective time of the Closing shall be 12:01 a.m. ET on the Closing Date (the "<u>Effective Time</u>").

Section 1.6 <u>Working Capital Adjustment</u>. The Purchase Price will be subject to adjustment as provided in this <u>Section 1.6</u> (the "<u>Working Capital Adjustment</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Working Capital</u>. "<u>Working Capital</u>" means the Current Assets of the Companies (excluding Cash and any tax asset), minus the Current Liabilities of the Companies (excluding Indebtedness), as of the applicable date, determined in a manner consistent with GAAP and the methodology set forth in <u>Schedule 1.6(a)</u> to this Agreement (the "<u>Working Capital Methodology</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Estimated Working Capital Adjustment</u>. At least five (5) Business Days prior to the Closing Date, the Companies will deliver to the Purchaser an estimated statement of the Working Capital as of the close of business on the day prior to the Closing Date, and, unless such statement is disputed by the Purchaser prior to the Closing Date, the Working Capital amount set forth in such statement shall be

the "<u>Estimated Working Capital</u>" for purposes of this Agreement. If the Estimated Working Capital is greater than the Working Capital Target, then, on the Closing Date, the Purchase Price will be increased on a dollar-for-dollar basis by an amount equal to the Estimated Working Capital less the Working Capital Target, however, if the Working Capital Target is greater than the Estimated Working Capital, then, on the Closing Date, the Purchase Price will be decreased on a dollar-for-dollar basis by an amount equal to the Working Capital Target less the Estimated Working Capital (such adjustment, the "<u>Estimated Working Capital Adjustment</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Closing Working Capital Adjustment</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) No later than sixty (60) days after the Closing Date, the Purchaser will prepare and deliver to the Companies a reasonably detailed statement (the "<u>Closing Working Capital Statement</u>") of the Working Capital as of the close of business on the day prior to the Closing Date (the "<u>Closing Working Capital</u>"). Following the Closing Date, the Purchaser will cooperate with the Companies and its advisors in making available to the Companies and its advisors such books, records, financial information, work papers and supporting data as may reasonably be requested by the Companies in connection with its review of the Closing Working Capital.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) The Companies may deliver a written notice to the Purchaser no later than twenty (20) days following the Companies' receipt of the Closing Working Capital Statement stating whether the Companies has any objections to the Closing Working Capital Statement, describing in reasonable detail any objections thereto. Failure to give a timely objection notice (or written notification from the Companies that they have no objection to the Closing Working Capital Statement) will constitute acceptance and approval of the calculation of Closing Working Capital set forth therein, and such calculation of Closing Working Capital will be final and binding upon the parties, absent manifest error.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) If the Companies notify the Purchaser of any objection to the Closing Working Capital Statement within the time period set forth in <u>Section 1.6(c)(ii)</u>, the Purchaser and the Companies will attempt in good faith to reach an agreement as to the matter in dispute. If such parties have failed to resolve any such disputed item within twenty (20) days after receipt of timely notice of such objection, then either party may at any time thereafter submit such disputed item to an independent accounting firm selected by the Purchaser and the Companies (the "<u>Independent Accounting Firm</u>") for determination. The Independent Accounting Firm will be given reasonable access to all of the relevant records of the Companies and the Purchaser to resolve any disputed item regarding the Closing Working Capital Statement and will be instructed to submit its determination in writing with respect to any disputed matters to the Purchaser and the Companies within twenty (20) days. The Independent Accounting Firm will address only those items properly disputed in accordance with <u>Section 1.6(c)(ii)</u> and the Independent Accounting Firm may not assign a value greater than the greatest value or lower than the lowest value for any such item claimed by the Purchaser, on the one hand, or the Companies, on the other hand. The Companies and the Purchaser will be entitled to present any materials they deem appropriate to the Independent Accounting Firm, including at a meeting with all parties present (to the extent such parties desire to be present in such meeting), to discuss their position. The fees and expenses of the Independent Accounting Firm incurred in resolving the disputed matter will be equitably apportioned by the Independent Accounting Firm based on the extent to which the Purchaser, on the one hand, or the Companies, on the other hand, is determined by the Independent Accounting Firm

to be the prevailing party in the resolution of each such disputed matter. The Closing Working Capital Statement properly disputed under this <u>Section 1.6(c)(iii)</u> will, after resolution of such dispute pursuant to this <u>Section 1.6(c)(iii)</u>, be final, binding and conclusive on all parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) If the Closing Working Capital as finally determined is greater than the Estimated Working Capital, then the Purchaser will pay such excess on a dollar-for-dollar basis to the Companies in immediately available funds, and if the Estimated Working Capital is greater than the Closing Working Capital as finally determined, then the Companies will pay such excess on a dollar-for-dollar basis to the Purchaser in immediately available funds. All payments pursuant to this <u>Section 1.6(c)(iv)</u> will be made within five (5) Business Days after the determination of Closing Working Capital becomes final and binding. In the Purchaser's sole discretion, any payment due from the Companies may be paid from the Holdback.

Section 1.7 <u>Withholding</u>. The Purchaser will be entitled to deduct and withhold from the consideration otherwise payable to the Companies or Shareholder pursuant to this Agreement or any Ancillary Agreement such amounts as the Purchaser is required to deduct and withhold with respect to the making of such payment under the Code or any provision of Law with respect to Taxes. To the extent that amounts are so withheld and timely paid over to the appropriate Government Entity by the Purchaser, such withheld amounts will be treated for all purposes of this Agreement or the applicable Ancillary Agreement as having been paid to the Companies or Shareholder, as applicable.

Section 1.8 <u>Purchase Price Allocation</u>. The Purchase Price will be allocated among the Assets in accordance with and as provided by Section 1060 of the Code (the "<u>Section 1060 Allocation</u>") as set forth on <u>Schedule 1.8</u>. The parties agree that any Tax Returns will be prepared and filed consistently with such agreed upon Section 1060 Allocation. In this regard, the parties agree that, to the extent required, they will each properly prepare and timely file Form 8594 in accordance with the agreed upon Section 1060 Allocation.

**ARTICLE II**

**REPRESENTATIONS AND** **WARRANTIES OF THE COMPANIES**

**AND THE SHAREHOLDER**

Except as set forth in the disclosure schedules delivered to Purchaser concurrently herewith (together, the "<u>Companies Disclosure Schedule</u>"), as of the date hereof and as of the Closing Date, the Companies and the Shareholder, jointly and severally, represent and warrant to Purchaser as to the matters in this <u>Article II</u>. The Purchaser acknowledges that Purchaser has been provide with information from the Companies via Google Docs, which satisfies the Purchaser fully with regard to disclosures. Purchaser acknowledges that the Disclosure Schedules do not contain all responsive items called for hereunder and agrees to waive, now and at all times, any claim against the Companies or Shareholder for any immaterial inaccuracy or omission to the Disclosure Schedules and agrees that neither any of the Companies nor the Shareholder shall have any liability arising from any immaterial inaccuracy or omission in the Disclosure Schedules.

Section 2.1 <u>Organization and Power; Authorization</u>. The Companies are duly formed and validly existing under the laws of their respective jurisdictions, are duly qualified to transact business in the United States and aboard with respect to the Business and are in good standing in each jurisdiction set forth on <u>Schedule 2.1</u> of the Companies Disclosure Schedule, which constitutes all jurisdictions where the operation of the Business requires that the Companies be qualified. The Companies possesses all requisite power and authority necessary to own and operate their properties and to carry on the Business as now conducted.

Section 2.2 <u>Capitalization</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The equity interests of the Companies issued and outstanding are owned of record and beneficially as set forth on <u>Section 2.2</u> of the Companies Disclosure Schedule. There are no outstanding options, warrants, purchase rights, exchange rights or other contracts or commitments which require the Companies to issue, sell, or otherwise to cause to become outstanding any equity interests of the Companies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The equity interests of the Shareholder issued and outstanding are owned of record and beneficially as set forth on <u>Schedule 2.2</u> of the Companies Disclosure Schedule. There are no outstanding options, warrants, purchase rights, exchange rights or other contracts or commitments which require the Shareholder to issue, sell, or otherwise to cause to become outstanding any equity interests of the Shareholder.

Section 2.3 <u>Authority</u>. Each of the Companies and Shareholder have the requisite power to execute and deliver this Agreement and the Ancillary Agreements to which it or they are a party and to fulfill their obligations hereunder and thereunder and to consummate the Contemplated Transactions. The execution, delivery and performance of this Agreement and of the Ancillary Agreements to which the Companies and Shareholder are a party have been duly authorized by all requisite action. This Agreement has been duly executed and delivered by the Companies and Shareholder and, as of the Closing, each of the other Ancillary Agreements to which the Companies or the Shareholder are a party will be duly executed and delivered by the Companies and the Shareholder, as appropriate, and, assuming due execution by the counterparties, this Agreement and, as of the Closing, each of the other Ancillary Agreements to the which the Companies or the Shareholder are a party will constitute the valid and binding obligations of the Companies or the Shareholder, as applicable, enforceable in accordance with their terms, subject only to bankruptcy, insolvency, reorganization, moratoriums, or similar Laws at the time in effect affecting the enforceability or right of creditors generally and by general equitable principles which may limit the right to obtain equitable remedies.

Section 2.4 <u>Noncontravention</u>. Neither the execution and delivery of this Agreement or any Ancillary Agreement to which the Companies or the Shareholder are a party nor the consummation of the Contemplated Transactions will conflict with or result in any violation of any provision of the Governing Documents of the Companies or the Shareholder, as applicable. Except as set forth on <u>Schedule 2.4</u> of the Companies Disclosure Schedule, no Consent, rights of first refusal, Order or approval of or filing with any Person or Government Entity, including without limitation, Consents from parties to Contracts with the Companies or the Shareholder, is required for the execution and delivery of this Agreement and the consummation of the Contemplated Transactions.

Section 2.5 <u>Financial Statements</u>. Attached hereto as <u>Schedule 2.5</u> of the Companies Disclosure Schedule are (i) the unaudited balance sheets of the Companies as of December 31, 2022 and 2021, and the unaudited income statements and statements of cash flows for the years ended December 31, 2022 and 2021,

&nbsp;&nbsp;&nbsp;&nbsp;(ii) the unaudited balance sheet of the Companies as of September 30, 2023, and the unaudited income statements and statements of cash flows for the nine months ended September 30, 2023 and 2022 (such financial statements in (i) and (ii), collectively, the "<u>Financial Statements</u>"). The Financial Statements have been prepared in accordance with GAAP and fairly present in all respects the financial condition of the Companies and the accounting practices have been consistently applied for all periods represented by the Financial Statements. The Companies' books and records are complete and correct in all material respects and in all material respects accurately reflect all of the assets, liabilities, transactions and results of operations of the Companies and the Financial Statements have been prepared and presented based upon and in conformity therewith.

Section 2.6 <u>No Undisclosed Liabilities; Indebtedness</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Companies do not have any Liabilities, Indebtedness, or obligations of any nature relating to the Business or secured by the Assets, whether absolute, accrued, contingent or otherwise and whether due or to become due, except those disclosed on <u>Schedule 2.6(a)</u> of the Companies Disclosure Schedule. <u>Schedule 2.6(b)</u> of the Companies Disclosure Schedule lists all Indebtedness of the Companies (including the outstanding balance as of the date of this Agreement), which includes amounts for assets under capital leases (as determined in accordance with GAAP), and all obligations of others guaranteed by the Companies with respect to the Business.

Section 2.7 <u>Title to Assets; Sufficiency</u>. Except as set forth on <u>Schedule 2.7</u> of the Companies Disclosure Schedule, the Companies own good and transferable title to all Assets, free and clear of any Encumbrances. Such assets, taken as a whole, are free from any defects, have been maintained in accordance with normal industry practice, and are in an operating condition and repair (subject to normal wear and tear) adequate and suitable for the purposes for which such assets are presently used. The Assets constitute all of the assets, property, and rights that are used in or necessary for the Companies to conduct the design, sales and distribution functions of the Business (the "<u>DSD Business</u>") as currently conducted and are sufficient for the continued conduct of those portions of the Business after the Closing in substantially the same manner as conducted prior to the Closing.

Section 2.8 <u>Purchased Contracts</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Schedule 2.8</u> of the Companies Disclosure Schedule contains a complete and accurate list of the following Contracts of the Companies (collectively, the "<u>Material Contracts</u>"):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) any Contract for the acquisition or sale of any securities or any substantial portion of the Assets or Business of or to any other Person whether completed or pending;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) any continuing Contract that requires the Companies to purchase materials, supplies, equipment, services or data involving in the case of any such Contract or agreement more than $25,000 over the remaining life of such contract or $10,000 per annum;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) any customer Contract with annual revenues in excess of $10,000;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) any indenture, mortgage, note, loan agreement, equipment financing agreement, installment obligation, or other Contract, agreement or instrument relating to Indebtedness;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) any Contract for capital expenditures with remaining obligations in excess of $10,000;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) any Contract that contains non-competition, non-solicitation, or other similar provisions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) any confidentiality, secrecy, or non-disclosure agreement entered into outside the Ordinary Course;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) any Contract involving payments during a twelve (12) month period of

$10,000 or more, pursuant to which the Companies are a lessor or lessee of any real property, machinery, equipment, motor vehicles, office furniture, fixtures or other personal property;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) any Contract involving a Related Party Transaction;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) any Contract to provide a guaranty, indemnification, reimbursement, contribution, assumption or endorsement of, or any substantially similar commitment with respect to, the obligations, Liabilities or Indebtedness of any other Person except Contracts containing standard indemnification provisions entered into in the Ordinary Course;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi) any investment banking, placement, broker or substantially similar Contract;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xii) any Contract with any Government Entity;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiii) any consulting Contract involving payments during any twelve (12) month period
of $10,000 or more;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiv) any distribution, reseller, dealer, agency, franchise, advertising, revenue sharing, alliance, joint venture, marketing or similar Contract of the Companies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xv) any employment, independent contractor or similar agreement of the Companies, including any agreement to provide any bonus or benefit to any employee or independent contractor;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xvi) any collective bargaining agreement with any labor organization or
 works council;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xvii) any Contract that contemplates the payment of royalties, commissions, or other payments based on provision of services or sales of products, whether related to licensing or development of Intellectual Property or otherwise; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xviii) any Contract that individually, or collectively with related Contracts, represents a material portion of the Companies' revenue or is otherwise material to the Business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Purchased Contracts constitute all of the Contracts that are necessary for the Companies to conduct the DSD Business as currently conducted and are sufficient for the continued conduct of the DSD Business after the Closing in substantially the same manner as conducted prior to the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Companies have performed all obligations required to be performed by them to date under the Purchased Contracts, and there are no defaults, to the Knowledge of the Companies, by any other party thereto, and no event has occurred (or failed to occur) that, with the passing of time or the giving of notice or both would constitute a default by the Companies under any such Purchased Contract, including the consummation of the Contemplated Transactions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Except as set forth in <u>Schedule 2.8</u> of the Companies Disclosure Schedule, no Consent is required to be obtained from, and no penalty, assessment or special payment is required to be paid to, and no notice is required to be sent to, any third party or Government Entity in order to preserve for Purchaser the benefits of the Purchased Contracts after the consummation of the Contemplated Transactions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Each Purchased Contract is in full force and effect and constitutes a legal, valid, binding agreement, except that the enforceability thereof may be subject to or limited by bankruptcy, insolvency, reorganization, arrangement, moratorium, or other similar Laws relating to or affecting rights of creditors and general equitable principles.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Purchaser has been supplied with a true and correct copy of all Purchased Contracts and all written contracts required to be disclosed in <u>Schedule 2.8</u> of the Companies Disclosure Schedule, together with all amendments, waivers or other changes thereto and true and correct written summaries of all oral contracts or agreements.

Section 2.9 <u>Intellectual Property Rights</u>. Set forth in <u>Schedule 2.9</u> of the Companies Disclosure Schedule is a list and brief description of all patents, patent rights, patent applications, trademarks, trademark applications and registrations, proprietary rights, service marks, service mark applications, trade names, domain names, copyrights and formulae related to the Assets or used in the Business and owned by or registered in the name of the Companies, or of which the Companies are a licensor or licensee or in which the Companies have any right, and in each case a brief description of the nature of such right. The Companies are not subject to any obligation, including any license or royalty obligation, relating to any product or service of the Business which the Companies now markets or has marketed in the past three years. All of the Intellectual Property in <u>Schedule 2.9</u> of the Companies Disclosure Schedule owned by or registered in the name of the Companies, and to the Knowledge of the Companies and the Shareholder, all of the Intellectual Property in <u>Schedule 2.9</u> of the Companies Disclosure Schedule of which the Companies are a licensor or licensee or in which the Companies have any right, is enforceable, subsisting and valid. Except as set forth in <u>Schedule 2.9</u> of the Companies Disclosure Schedule, the Companies own all rights in, or possess adequate licenses or other rights to use, all patents, patent applications, trademarks, trademark applications and registrations, service marks, service mark applications and registrations, indicia of origin, proprietary rights, trade names, domain names, web site content, copyrights, works of authorship, software, manufacturing processes, batch tickets, formulae, technology, trade secrets and know how, used in, or necessary to conduct, the Business as conducted prior to Closing (collectively, "<u>Intellectual Property</u>") free and clear of all Encumbrances. Neither the Intellectual Property nor the conduct of the Business as conducted prior to Closing, infringes upon or conflicts with the right of any third party. No claim by any third party contesting the validity, enforceability, use or ownership of the Intellectual Property by the Companies has been made or, to the Knowledge of the Companies or Shareholder, is threatened. To the Knowledge of the Companies and the Shareholder, no third party is infringing the Intellectual Property. Neither the Shareholder nor any other Affiliate or Insider of the Companies or Shareholder owns or has any interest in the Intellectual Property used by the Companies. All employees and independent contractors (including consultants) who have participated in the development or creation of Intellectual Property have executed appropriate assignment agreements, pursuant to which each such employee or independent contractor has assigned to the Companies all of its rights, in and to all Intellectual Property, ideas, inventions, processes, works of authorship and other work products that relate to the Business, and that were conceived, created, authored or developed, in whole or in part, by such employee or independent contractor. No past or present employee or independent contractor of the Companies has any ownership interest, license, permission or other right in or to any such Intellectual Property.

Section 2.10 <u>Litigation</u>. Except as set forth on <u>Schedule 2.10</u> of the Companies Disclosure Schedule, there is no suit, claim, action, Proceeding or investigation pending or, to the Knowledge of the Companies, threatened against the Companies or to which the Companies are a party with regard to the Assets or the Business before any Government Entity or arbitration authority. The Companies are not in breach or default with respect to, or subject to, any Order of any court or other Government Entity, and there are no unsatisfied judgments against the Companies, the Business or the Assets. <u>Schedule 2.10</u> of the Companies Disclosure Schedule lists all suits, claims, actions, Proceedings or investigations against the Companies at law or in equity that have occurred since January 1, 2012, with respect to the Business or the Assets.

Section 2.11 <u>Environmental Matters</u>. Except as disclosed in <u>Schedule 2.11</u> of the Companies Disclosure Schedule and with respect to the Business, (a) the Companies are and have been in compliance with all Environmental Laws; (b) the Companies have not received, in the past three (3) years, any notice from a Government Entity alleging that it is not in compliance with applicable Environmental Laws; (c) the Companies have obtained and is in compliance with all Permits required pursuant to Environmental Laws for the operation of the Business (each of which is disclosed in <u>Schedule 2.13</u> of the Companies Disclosure Schedule); (d) the Companies have not received any order, notice, or other communication from (nor to the Knowledge of the Companies has any action been threatened by) any Person of any alleged obligation of the Companies to undertake or bear the cost of any remediation action; (e) there are no pending or, to the Knowledge of the Companies, threatened, claims, Encumbrances, or other restrictions of any nature, resulting from any violation or failure to comply with any applicable Environmental Law with respect to the Business or any Asset; (f) there has been no release of any Hazardous Substances on or from any real property owned, operated or leased by the Companies in violation of any applicable Environmental Law, and to the Knowledge of the Companies, no real property owned, operated or leased by the Companies has been contaminated by any Hazardous Substance; and (g) none of the real property currently or formerly owned, leased or operated by the Companies in connection with the Business is listed on, or has been proposed for listing on, the National Priorities List under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. § 9601 et seq., or its state equivalent, and the Companies have not sent or disposed of Hazardous Substances to or at a site that, pursuant to CERCLA, or any similar state law, has been listed or proposed for listing on the National Priorities List or its state equivalent.

Section 2.12 <u>Tax Matters</u>. The Companies have filed all Tax Returns (including sales tax returns) that it was required to file. All such Tax Returns were true, correct and complete in all respects. All Taxes due and payable by the Companies have been paid. No claim has ever been made by a Government Entity in a jurisdiction where the Companies do not file Tax Returns (including sales tax returns), that they are, or may be, subject to taxation by that jurisdiction. There are no Encumbrances (other than Encumbrances of real estate and personal property Taxes or assessments not yet due and payable) on any of the assets of the Companies that arose in connection with any failure (or alleged failure) to pay any Taxes. The Companies have withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, or other third party and each such party has been properly classified. There is not outstanding any notice received by the Companies from any Government Entity that the Companies are subject to an audit or investigation that could result in the payment of additional Taxes. There is outstanding no dispute or claim concerning any Tax of the Companies either (a) claimed or raised by any Government Entity in writing, or (b) as to which the Companies have Knowledge. The Companies are not a party to any Tax allocation or sharing agreement. The Companies have no Liability for the Taxes of any Person, as a transferee or successor, by Contract, or otherwise.

Section 2.13 <u>Compliance with Laws; Permits</u>. The Companies are in compliance with all applicable Laws as such compliance relates in any way to the Business or the Assets. Except as set forth in <u>Section 2.13</u> of the Companies Disclosure Schedule, there are no permits, approvals, registrations, franchises, licenses, certificates, certifications, accreditations and other authorizations of all Governmental Entities or other third-parties ("<u>Permits</u>") required for the Companies to conduct the Business or to own, lease, use or operate the Assets. No notices have been received by the Companies alleging the failure to hold any Permits. <u>Schedule 2.13</u> of the Companies Disclosure Schedule sets forth all third-party certifications of the Products (as defined below).

Section 2.14 <u>Brokerage and Finder's Fees</u>. Except as set forth on <u>Schedule 2.14</u> of the Companies Disclosure Schedule, neither the Companies nor the Shareholder have incurred nor will incur, any brokerage, finder's or similar fee in connection with the Contemplated Transactions.

Section 2.15 <u>Insurance</u>. The Companies are currently insured by insurers unaffiliated with the Companies with respect to their properties, assets and operation of the Business in such amounts and against such risks which are appropriate and customary for the type of business conducted by the Companies with customary deductibles and retained amounts. <u>Schedule 2.15</u> of the Companies Disclosure Schedule provides a description of each type of coverage held by the Companies, the name of the insurer, policy term, policy number, limits and retentions (including a description of any self-insured liabilities if applicable). In addition, the Companies have maintained comparable insurance for all prior periods. With respect to each insurance policy held by the Companies insuring any aspect of the operation of the Business or the Assets (a) the policy is legal, valid, binding and in full force and effect; and (b) the Companies are not in default under the respective policy. There are no claims by the Companies pending under any such policies and the Companies have not been informed that coverage has been questioned, denied or disputed by the underwriters of such policies with respect to any such claims. The Companies are not aware of any Liability for which the aggregate policy limits could be exhausted or materially eroded by virtue of claim.

Section 2.16 <u>Inventory</u>. The Inventory is held for resale and consists of items that are of a quality and quantity usable and salable and are of the type and nature which the Companies have sold or utilized within the one-year period prior to the date of this Agreement. The method of valuing such Inventory on the Financial Statements, and the reserves with respect thereto, are consistent with past practice and in accordance with GAAP. The values of obsolete or below standard quality Inventory have been written down on the Companies' books. The Inventory is located at one of the parcels of Real Property.

Section 2.17 <u>Accounts Receivable</u>. All Accounts Receivable are valid receivables, collectible, and represent arm's length transactions in the Ordinary Course. Any reserve for doubtful accounts with respect to such Accounts Receivable is reflected in the Financial Statements and has been determined in accordance with past practice and in accordance with GAAP. There is no contest, claim, defense or right of setoff with any account debtor of the Companies relating to the amount or validity of such Accounts Receivable. Each of the Accounts Receivable either has been or will be collected in full, without any setoff, within ninety

&nbsp;&nbsp;&nbsp;&nbsp;(90) days after the day on which it first becomes due and payable.

Section 2.18 <u>Absence of Certain Developments</u>. Except as set forth in <u>Schedule 2.18</u> of the Companies Disclosure Schedule, since September 30, 2023, the Companies have conducted the Business only in the Ordinary Course, have incurred no Liabilities relating to the Business other than in the Ordinary Course, and have not, other than in accordance with the terms of this Agreement, with respect to the Business or relating to the Assets:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) discharged or satisfied any Encumbrance or paid any obligation or Liability, other than current Liabilities paid in the Ordinary Course, or cancelled, compromised, waived or released any right or claim;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) sold, assigned, licensed or transferred any of its assets, except for sales in the Ordinary Course, or mortgaged, pledged or subjected its assets to any Encumbrance;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) suffered any extraordinary loss, damage, destruction or casualty loss or waived any rights of material value, whether or not covered by insurance and whether or not in the Ordinary Course;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) borrowed any amount or incurred or become subject to any material Liabilities, except current Liabilities incurred in the Ordinary Course and Liabilities under Contracts entered into in the Ordinary Course;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) declared, set aside or paid any dividend or distribution of cash or other property to any equityholder;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) commenced any litigation or binding dispute resolution process or settled or compromised any pending or threatened suit, action or claim;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) sold, assigned, transferred, abandoned or permitted to lapse any licenses or Permits associated with the Business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) received notice from any of its suppliers of a material increase in the cost of goods
or services;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) entered into any other material transaction, other than in the Ordinary
Course; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) experienced a Material Adverse Effect.

Section 2.19 <u>Related Party Transactions</u>. Except as set forth in <u>Schedule 2.19</u> of the Companies Disclosure Schedule, the Companies have no Knowledge of and are not currently a party to any Related Party Transaction and have not been a party to any Related Party Transaction since January 1, 2021, in each case, with respect to the Business.

Section 2.20 <u>Warranties</u>. <u>Section 2.20</u> of the Companies Disclosure Schedule sets forth a description of all product warranties and guarantees given by the Companies to any customer in connection with the Business. Each of the products in the Business developed, sold, or distributed by the Companies (the "<u>Products</u>") meets, and, at all times, has met, all standards for quality and workmanship prescribed by Law, industry standards, contractual agreements, or the product literature of the Companies and have been labeled in accordance with all Laws. Except as described in <u>Schedule 2.20</u> of the Companies Disclosure Schedule, (a) no claims have been made under the product warranties or guarantees of the Companies, and

&nbsp;&nbsp;&nbsp;&nbsp;(b) there have not been any mandatory or voluntary product recalls or withdrawals with
respect to any Products. The Companies have no Liability arising out of any injury to any Person or property as a result of
the ownership, possession, or use of any Products sold, leased, distributed, or delivered by the Companies.

Section 2.21 <u>Customers, Suppliers and Sales Representatives</u>. <u>Schedule 2.21</u> of the Companies Disclosure Schedule sets forth (i) a list of the top 25 customers and the top 10 suppliers of the Business with respect to dollar volume of sales and purchases for the fiscal year ended December 31, 2022 and for the nine-month period ended September 30, 2023, and (ii) a list of the current sales representatives of the Business, including the commissions paid to such sales representatives for the fiscal year ended December 31, 2022, and for the nine-month period ended September 30, 2023, as well as the current commission rates for such sales representatives. Except as set forth in <u>Schedule 2.21</u> of the Companies Disclosure Schedule, since September 30, 2023, the Companies have not received any notice from any customer or supplier listed in <u>Schedule 2.21</u> of the Companies Disclosure Schedule to the effect that any such customer or supplier will stop, materially decrease the rate of, or materially change the terms (whether related to payment, price or otherwise) with respect to, purchasing or selling products or services from or to the Companies (whether as a result of the consummation of the transactions contemplated hereby or otherwise). The Companies have not received notice and has no Knowledge that any customer or customers which, individually or in the aggregate, account for more than two percent (2%) of the revenue of the Business, has plans or has threatened to stop or materially decrease the rate of business done with the Companies. The Companies have not received notice and the Companies have no Knowledge that any supplier or suppliers which, individually or in the aggregate, account for more than two percent (2%) of the dollar amount of payments made by the Companies relating to the Business, has plans or has threatened to stop or materially decrease the rate of business done with the Companies. The Companies have not received notice and have no Knowledge that any sales representative listed in <u>Schedule 2.21</u> of the Companies Disclosure Schedule has plans or has threatened to stop marketing or promoting, or to materially decrease the rate at which such sales representative markets or promotes, the products or services of the Companies.

Section 2.22 <u>Real Property. Schedule 2.22</u> of the Companies Disclosure Schedule sets forth (i) the address of each parcel of real estate owned by the Companies (the "<u>Owned Real Property</u>") and (ii) the address of each parcel of real estate leased by the Companies (the "<u>Leased Real Property</u>," and together with the Owned Real Property, the "<u>Real Property</u>"), and a true and complete list of all leases (including all amendments, extensions, renewals, guaranties and other agreements with respect thereto) for any Leased Real Property (including the date and name of the parties to such lease or license document). The Companies have delivered to Purchaser a true and complete copy of each such lease document. Except as set forth in <u>Schedule 2.22</u> of the Companies Disclosure Schedule: (a) each lease for the Leased Real Property is legal, valid, binding, enforceable and in full force and effect; (b) the Companies' possession and quiet enjoyment of the Real Property has not been disturbed and there are no disputes with respect to such possession; (c) the Companies and any other party to any lease for the Leased Real Property is not in breach or default under such lease, and no event has occurred or circumstance exists which, with the delivery of notice, the passage of time or both, would constitute such a breach or default, or permit the termination, modification or acceleration of rent under such lease; (d) no security deposit or portion thereof deposited with respect to a lease for the Leased Real Property has been applied in respect of a breach or default under such lease which has not been redeposited in full; (e) neither the Companies nor the Shareholder owe, or will owe in the future, any brokerage commissions or finder's fees with respect to any Real Property; (f) the Companies have not subleased, licensed or otherwise granted any Person the right to use or occupy the Real Property or any portion thereof; (g) the Companies have not collaterally assigned or granted any other security interest in the Real Property (including with respect to any lease for any Leased Real Property); (h) the Companies have not received notice of actual or threatened special assessments of the Real Property; (i) the Real Property is in compliance with all applicable Laws, including the Acmes with Disability Act and all Laws with respect to zoning, building, fire, safety, health codes and sanitation; and (j) all buildings, structures, improvements, fixtures, building systems and equipment, and all components thereof, included in the applicable Real Property are in good condition and repair (fair wear and tear excepted) and sufficient for the operation of the Business as presently conducted thereon.

Section 2.23 <u>Compensation of and Contracts with Employees; Accrued Liabilities</u>. <u>Schedule 2.23</u> of the Companies Disclosure Schedule sets forth a correct and complete list of all employees, consultants or contractors of the Companies as of the date hereof, and sets forth for each such individual the following: (a) name, (b) title or position (including whether full or part- time), (c) hire date, (d) current annual base compensation rate, (e) commission, bonus or other incentive-based compensation, and (f) the rate and amount of such compensation paid to each such employee for the year to date. Except as set forth in <u>Schedule 2.23</u> of the Companies Disclosure Schedule, the Companies do not have any outstanding loans or advances to employees. <u>Schedule 2.23</u> of the Companies Disclosure Schedule lists any employee handbook and/or personnel manuals that in any way affect such employees, correct and complete copies of which have been given to the Purchaser. Any individual performing services for the Companies who has been classified as an independent contractor, as an employee of some other entity whose services are leased to the Companies, or as any other nonemployee category, has been correctly so classified and is in fact not a common law employee of the Companies. Except as set forth in <u>Section 2.23</u> of the Companies Disclosure Schedule, no employees are out on a leave of absence (whether related to disability, under the Family and Medical Leave Act (or any analogous Law), or otherwise). To the Knowledge of the Companies and the Shareholder, no employee or independent contractor intends to terminate his or her employment or engagement with the Companies or decline an offer of employment from Purchaser as a result of or in connection with the transactions contemplated hereby.

Section 2.24 <u>Labor Relations; Employee Benefit Plans</u>. Except as set forth in <u>Schedule</u>

&nbsp;&nbsp;&nbsp;&nbsp;<u>2.24</u> of the Companies Disclosure Schedule:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Companies have not engaged in any plant closing, mass layoff or other action related to any employee that has resulted or could result in Liability under the Worker Adjustment and Retraining Notification Act of 1988, or under any comparable Law or regulation of a state or a foreign jurisdiction, and has not issued any notice that any such action is to occur in the future.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Set forth in <u>Schedule 2.24</u> of the Companies Disclosure Schedule is a complete list of all pension, profit sharing, retirement, equity purchase, equity option, bonus, incentive compensation and deferred compensation plans, life, health, dental, accident or disability, workers' compensation or other employee welfare benefit plans (insured or self-insured), educational assistance, pre-tax premium or flexible spending account plans, supplemental or executive benefit plans, non-qualified retirement plans, severance or separation plans, and any other employee benefit plans, practices, policies or arrangements of any kind, whether written or oral, which are currently maintained by the Companies for the benefit of any of its employees (including former employees), or under which the Companies have any current or potential Liability with respect to any employee or former employee or the dependents of any such person, including any "employee benefit plan" which is subject to the Employee Retirement Income Security Act of 1974, as amended ("<u>ERISA</u>") (herein collectively referred to as "<u>Employee Benefit Plans</u>" and individually as an "<u>Employee Benefit Plan</u>"). All Employee Benefit Plans comply in form and in operation in all material respects with their terms, the applicable requirements of ERISA, the applicable requirements of the Code and all applicable Laws. The Purchaser will not have any Liability (whether actual, potential or contingent) on or after the Closing Date with respect to any Employee Benefit Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) With respect to each Employee Benefit Plan, the Companies have delivered to the Purchaser accurate, current and substantially complete copies of each of the following: (i) the plan document, together with all amendments; (ii) where the Employee Benefit Plan has not been reduced to writing, a written summary of all material plan terms; (iii) where applicable, copies of any trust agreements, custodial agreements, insurance policies, administration agreements and similar agreements, and investment management or investment advisory agreements; (iv) copies of any summary plan descriptions, employee handbooks or similar employee communications relating to any Employee Benefit Plan; (v) in the case of any Employee Benefit Plan that is intended to be qualified under Section 401(a) of the Code, a copy of the most recent determination, advisory or opinion letter from the Internal Revenue Service; (vi) in the case of any Employee Benefit Plan for which Forms 5500 are required to be filed, a copy of the most recently filed Forms 5500, with schedules attached; and (vii) copies of notices, letters or other correspondence from the Internal Revenue Service, Department of Labor or Pension Benefit Guaranty Corporation relating to the Employee Benefit Plan during the last six years. Except as specifically provided in the foregoing documents that have been delivered to Purchaser, there are no amendments to any Employee Benefit Plan that have been adopted or approved nor have the Companies undertaken to make any such amendments or to adopt or approve any new Employee Benefit Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Except as set forth in <u>Schedule 2.24</u> of the Companies Disclosure Schedule or the Offer Letters (as defined in <u>Section 4.1(h)(vi)</u> of this Agreement), the execution of this Agreement and the consummation of the transactions contemplated by this Agreement (alone or together with any other event) will not (i) entitle any current or former officer, director, employee, or consultant of the Companies to severance pay, retention bonuses, parachute payments, or any other similar payment, (ii) accelerate the time of payment or vesting, or increase the amount of compensation due any such officer, director, employee, or consultant, (iii) result in any forgiveness of material indebtedness or material obligation to fund benefits with respect to any such officer, director, employee, or consultant, or (iv) result in any amount failing to be deductible by reason of Section 280G of the Code.

Section 2.25 <u>Disclosure</u>. No representation or warranty by the Companies or the Shareholder contained in this Agreement, and no statement contained in the Companies Disclosure Schedule or any other document, certificate or other instrument delivered to or to be delivered by or on behalf of the Companies or the Shareholder pursuant to this Agreement, contains or will contain any untrue statement of a material fact or omits or will omit to state any material fact necessary, in light of the circumstances under which it was or will be made, in order to make the statements herein or therein not misleading.

**ARTICLE III**

**REPRESENTATIONS AND WARRANTIES OF PURCHASER**

Purchaser hereby represents and warrants to the Companies and the Shareholder as follows:

Section 3.1 <u>Organization</u>. Purchaser is a corporation duly formed, validly existing and in good standing under the laws of its jurisdiction of formation and has all requisite power and authority to own, lease and operate its properties and to carry on its business as it is now being conducted.

Section 3.2 <u>Authority Relative to this Agreement</u>. Except as set forth in <u>Section 4.1(e)</u> of this Agreement, Purchaser has the requisite power and authority to execute and deliver this Agreement and the Ancillary Agreements to which Purchaser is a party, to perform its obligations hereunder and to consummate the Contemplated Transactions. The execution, delivery and performance of this Agreement and of the Ancillary Agreements to which Purchaser is a party by Purchaser have been duly authorized by all requisite corporate action. This Agreement has been duly executed and delivered by the Purchaser and, as of the Closing, each of the other Ancillary Agreements to which Purchaser is a party will be duly and validly executed and delivered by Purchaser and, assuming the due authorization, execution and delivery hereof and thereof by the counterparties, this Agreement and, as of the Closing, each of the other Ancillary Agreements to which the Purchaser is a party will constitute valid and binding agreements of Purchaser enforceable in accordance with their terms, subject only to bankruptcy, insolvency, reorganization, moratoriums, or similar Laws at the time in effect affecting the enforceability or right of creditors generally and by general equitable principles which may limit the right to obtain equitable remedies.

Section 3.3 <u>Noncontravention</u>. Neither the execution and delivery of this Agreement, the Ancillary Agreements to which Purchaser is a party nor the consummation of the Contemplated Transactions will (a) conflict with or result in any violation of any provision of the Governing Documents of Purchaser, or (b) require any Consent or notice under, or conflict with or result in a violation or breach of, or constitute (with or without notice or lapse of time or both) a default (or give rise to any right of termination, cancellation or acceleration) under, any of the terms, conditions or provisions of any Contracts of Purchaser, except as has been obtained in advance of the date hereof.

Section 3.4 Not a Shell Company. The Purchaser is not and has not been at any time since October 1, 2020 a "shell company" as such term is defined by either Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.

**ARTICLE IV**

**CONDITIONS TO OBLIGATION TO CLOSE**

Section 4.1 <u>Conditions to Obligation of Purchaser</u>. Except as otherwise expressly provided in this Agreement, the obligation of Purchaser to consummate the Contemplated Transactions is subject to the satisfaction of the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) each of the representations and warranties made by the Companies and the Shareholder will be accurate and correct in all material respects (except that any such representation and warranty that is qualified by materiality, Material Adverse Effect, or similar phrases will be true and correct in all respects) as of the date of this Agreement and as of the Closing Date as if made anew as of such date (except to the extent such representation and warranty expressly relates to a specific date (in which case as of such specific date));

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the Companies and Shareholder will have performed and complied in all material respects with all of the covenants, obligations and agreements contained in this Agreement to be

performed and complied with by the Companies and Shareholder on or prior to the Closing Date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) the Companies and Shareholder will have delivered to the Purchaser a certificate signed by the Companies and Shareholder, dated as of the Closing Date, certifying that the conditions set forth in <u>Section 4.1(a)</u> and <u>Section 4.1(b)</u> have been satisfied;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) since the date of this Agreement, there will not have been commenced or threatened against the Companies, the Shareholder or Purchaser or any of their respective Affiliates any action, arbitration, audit, hearing, investigation or suit (i) including any challenge to, or seeking damages or other relief in connection with, any of the transactions contemplated by this Agreement or (ii) that may have the effect of preventing, delaying, imposing limitations or conditions on or otherwise interfering with any of the transactions contemplated by this Agreement or the Purchaser's ability to use the Assets and operate the DSD Business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) there will not be any injunction, judgment, order, decree, ruling or charge having the likely effect of preventing consummation of any of the Contemplated Transactions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) the Companies will have obtained and provided Purchaser with all Consents of any Governmental Entities or third parties that are required for the consummation of the Contemplated Transactions on terms and conditions reasonably satisfactory to Purchaser; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) the Companies will have delivered to Purchaser:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) a Bill of Sale, Assignment and Assumption Agreement, in the form attached hereto as <u>Exhibit A</u> (the "<u>Bill of Sale, Assignment and Assumption Agreement</u>"), executed by the Companies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Transition Services Agreements, in the form attached hereto as <u>Exhibit B</u> (the "<u>Transition Services Agreement</u>");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) an Intellectual Property Assignment Agreement, in the form attached hereto as <u>Exhibit C</u> (the "<u>IP Assignment Agreement</u>");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) A Business Commission Agreement, in the form attached hereto as Exhibit D (the "<u>Business Commission Agreement</u>");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) payoff letters acceptable to Purchaser and lien releases with respect to the Indebtedness of the Companies and any and all Encumbrances on the Assets which payoff letters, for the avoidance of doubt, include (A) the automatic release of all of the guarantees by, and all of the liens and securities interests on any assets of, the Seller relating thereto upon payment on full of such Indebtedness and (B) an authorization for the Seller, Buyer or their designees to file all releases and termination statements, as applicable;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) a Consent to assignment for each Contract set forth on <u>Schedule 4.1(h)(v)</u>, in a form reasonably acceptable to Purchaser, executed by each party to such Contracts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) an assignment or sublease on the Leased Real Property of the Companies: in the Dominican Republic at C/ Privada #196 esquina Dominicana, Bonao, 42000, Dominican Republic and Fort Lauderdale, Florida at 4300 N University Drive, Fort Lauderhill, Florida 33351;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) offer letters, if appliable, executed by employees of the Companies (collectively, the "<u>Transferred Employees</u>"), substantially in the forms included in

<u>Schedule 4.1(h)(vi)</u> (collectively, the "<u>Offer Letters</u>");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) a good standing or similar certificate of the Companies from the secretary of states of the Companies' jurisdictions of formation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) certified copies of the resolutions duly adopted by all of the members and managers of the Companies and all of the directors and shareholders of the Shareholder, if applicable, authorizing the execution, delivery and performance of this Agreement and the Ancillary Agreements, and the consummation of the Contemplated Transactions; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi) such other documents or instruments as Purchaser reasonably requests to effect the Contemplated Transactions.

Section 4.2 <u>Conditions to Obligation of Companies and Shareholders</u>. Except as otherwise expressly provided in this Agreement, the obligation of the Companies and the Shareholders to consummate the Contemplated Transactions is subject to satisfaction of the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) each of the representations and warranties made by the Purchaser will be accurate and correct in all material respects as of the date of this Agreement and as of the Closing Date as if made anew as of such date (except to the extent such representation and warranty expressly relates to a specific date (in which case, as of such specific date));

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Purchaser will have performed and complied in all material respects with all of its respective covenants, obligations and agreements contained in this Agreement to be performed and complied with by Purchaser on or prior to the Closing Date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Purchaser will have delivered to the Companies and Shareholders a certificate signed by an officer of Purchaser, dated as of the Closing Date, certifying that the conditions set forth in <u>Section 4.2(a)</u> and <u>Section 4.2(b)</u> have been satisfied; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Purchaser will have delivered to the Companies:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the Closing Cash Payment by wire transfer to an account specified in writing by the Companies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the Transition Services Agreements executed by Purchaser;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) the Bill of Sale, Assignment and Assumption Agreement executed by Purchaser;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) the IP Assignment Agreement executed by Purchaser;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) the assignment or sublease on the Leased Real Property of the Companies: and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) Business Commission Agreement executed by Purchaser.

**ARTICLE V COVENANTS**

Section 5.1 <u>Transfer Taxes</u>. The Companies will be responsible for all stamp, transfer, documentary, sales, use, value added, registration, property, excise and other such taxes and fees relating thereto (including any penalties, interest and additions to such taxes) incurred in connection with this Agreement, the Ancillary Agreements and the Contemplated Transactions, and the Companies will make all filings, returns, reports and forms as may be required to comply with the provisions of all applicable Tax Laws.

Section 5.2 <u>Transition</u>. Neither the Companies nor any Shareholders will take any action which is intended to have the effect of discouraging customers, suppliers, lessors, licensors and other business associates from maintaining the same business relationships with Purchaser after the date of this Agreement as were maintained with the Companies with respect to the Business prior to the date of this Agreement.

Section 5.3 <u>Payment of Retained Liabilities</u>. In addition to payment of Taxes pursuant to <u>Section 5.1</u>, the Companies will pay, or make adequate provision for the payment, in full all of the Retained Liabilities and other Liabilities of the Companies under this Agreement. If any such Liabilities are not so paid or provided for, or if Purchaser reasonably determines that failure to make any payments will impair Purchaser's use or enjoyment of the Assets or conduct of the Business, Purchaser may, at any time after the Closing Date, elect to make all such payments directly (but will have no obligation to do so) and will be promptly reimbursed by the Companies and the Shareholder, jointly and severally, for the amount paid by Purchaser (or at the Purchaser's election, the Purchaser may offset such amount against the Holdback).

Section 5.4 <u>Expenses</u>. Each party hereto will be solely responsible for and will bear all of its own costs and expenses incident to its obligations under and in respect of this Agreement and the Contemplated Transactions, including, but not limited to, any such costs and expenses incurred by any party in connection with the negotiation, preparation and performance of and compliance with the terms of this Agreement (including, without limitation, the fees and expenses of legal counsel, accountants, investment bankers or other representatives and consultants); provided that the Shareholder will be responsible for such expenses of the Companies.

Section 5.5 <u>Noncompetition;</u> <u>Nonsolicitation</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Noncompetition</u>. For a period of five (5) years after the Closing Date, the Companies and the Shareholder will not, anywhere in the world, directly or indirectly invest in, own, manage, operate, finance, control, advise, render services to or guarantee the obligations of any Person engaged in or planning to become engaged in the Business, provided, however, that the Shareholder or the Companies may (i) purchase or otherwise acquire up to (but not more than) three percent (3%) of any class of the securities of any Person (but may not otherwise participate in the activities of such Person) if such securities are listed on any national or regional securities exchange or have been registered under Section 12(g) of the Exchange Act, and (ii) may perform the obligations of the Companies pursuant to the Transition Services Agreements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Nonsolicitation and Nonhire</u>. For a period of five (5) years after the Closing Date, neither the Companies nor the Shareholder will, directly or indirectly, with respect to the Business:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) solicit the business of any Person who is a customer of Purchaser;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) cause, induce or attempt to cause or induce any customer, supplier, licensee, licensor, franchisee, employee, consultant or other business relation of Purchaser to cease doing business with Purchaser, to deal with any competitor of Purchaser or in any way interfere with its relationship with Purchaser;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) cause, induce or attempt to cause or induce any customer, supplier, licensee, licensor, franchisee, employee, consultant or other business relation of the Companies at any time on or prior to the Closing Date to cease doing business with Purchaser, to deal with any competitor of Purchaser or in any way interfere with its relationship with Purchaser; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) hire, retain or attempt to hire or retain any employee or independent contractor of Purchaser (current, or former if such Person was an employee or independent contractor in the twelve-month period prior to the relevant time period) or in any way interfere with the relationship between Purchaser and any of its employees or independent contractors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Tolling</u>. If the Companies or any Shareholder violates any provisions or covenants of this <u>Section 5.5</u>, the duration of the restrictions in this <u>Section 5.5</u> will be extended for a period of time equal to that period beginning when such violation commenced and ending when the activities constituting such violation terminated, and, in the event Purchaser seeks relief from such violation before any court, board or other tribunal, then the duration of restrictions in this <u>Section 5.5</u> will be extended for a period of time equal to the pendency of such proceedings, including all appeals.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Modification of Covenant</u>. If a final judgment of a court or tribunal of competent jurisdiction determines that any term or provision contained in <u>Section 5.5(a)</u> or <u>(b)</u> is invalid or unenforceable, then the parties agree that the court or tribunal will have the power to reduce the scope, duration or geographic area of the term or provision, to delete specific words or phrases or to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision. This <u>Section</u> 5.5 will be enforceable as so modified after the expiration of the time within which the judgment may be appealed. This <u>Section 5.5</u> is reasonable and necessary to protect and preserve Purchaser's legitimate business interests and the value of the Assets and to prevent any unfair advantage conferred on the Companies or any Shareholder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Enforcement of Covenant</u>. The parties agree that the remedy of damages at law for the breach of any of the covenants contained in this <u>Section 5.5</u> is an inadequate remedy. In recognition of the irreparable harm that a violation by the Shareholder or Companies of any of the covenants, agreements or obligations arising under this <u>Section 5.5</u> would cause Purchaser or its Affiliates, the Companies and each Shareholder agrees that in addition to any other remedies or relief afforded by law, a preliminary and permanent injunction against an actual or threatened violation or violations may be issued against any the Companies or any Shareholder without showing actual monetary damages or posting of a bond or other security. In the event of an action to enforce the covenants in this <u>Section 5.5</u>, Purchaser will be entitled to be reimbursed by the Companies and Shareholder for reasonable attorney's fees and other expenses incurred by Purchaser with respect to such enforcement action. The Companies and Shareholder acknowledge and expressly consent to the governing law and exclusive jurisdiction provisions set forth in <u>Section 8.9</u> with respect to this <u>Section 5.5</u>.

Section 5.6 <u>Non-Assignable Assets.</u> If the assignment of any Assets requires the consent of any Person and such consent is not obtained at or prior to the Closing (a) the Companies and the Shareholder will use their reasonable best efforts to obtain the written consent of such other Person to the assignment,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) this Agreement will not constitute an agreement to assign such Assets until such consent
is obtained, and (c) at Purchaser's election, (i) the Companies will continue to maintain and/or perform any such Assets at the
direction and for the risk, liability and benefit of Purchaser or (ii) Purchaser may act as agent and attorney-in-fact for the Companies
to obtain the benefits thereunder for Purchaser.

Section 5.7 <u>Administration of Accounts.</u> All payments and reimbursements received by the Companies or any Affiliate of the Companies after the Closing Date from any third party in the name of the Companies with respect to any assets included within the Assets will be held by the Companies or an Affiliate in trust for the benefit of Purchaser. Immediately upon collection and receipt of such payment or reimbursement, the Companies will pay to Purchaser the amount of such payment or reimbursement without right of set-off, offset, or reduction of any kind. Without limiting the generality of the foregoing, the Companies will, and the Shareholder will cause the Companies to, cooperate to implement a sweep of Companies bank accounts, add Purchaser representatives as signators on such accounts, and otherwise cause all amounts received by the Companies with respect to any assets (including accounts receivable) included within the Assets to be promptly remitted to Purchaser.

Section 5.8 <u>Name Change</u>. The Companies will adopt, following the Closing Date, a new entity name wholly dissimilar to its current name and any variations or derivations thereof, and will at a mutually agreed upon time following the Closing file necessary amendments to its Governing Documents to reflect such name change. After the Closing, the Companies and Shareholder will not use either Companies' pre- Closing names or any variation or derivation thereof in any commercial context; <u>provided</u>, <u>however</u>, that the Companies may use the Companies' pre-Closing names in connection with the dissolution or liquidation of the Companies.

Section 5.9 <u>[INTENTIONALLY OMITTED]</u>

Section 5.10 <u>Bulk Sales Laws</u>. The parties hereby waive compliance with the provisions of any bulk sales, bulk transfer or similar Laws of any jurisdiction that may otherwise be applicable with respect to the sale of any or all of the Assets to Purchaser, it being understood that any Liabilities arising out of the failure of the Companies or Shareholder to comply with the requirements and provisions of any bulk sales, bulk transfer or similar Laws of any jurisdiction will be treated as Retained Liabilities.

Section 5.11 <u>Further Assurances</u>. At any time after the Closing Date, the Companies will, and, as applicable the Shareholder will, execute, acknowledge and deliver any further deeds, assignments, conveyances, certificates and other assurances and documents and instruments of transfer reasonably requested by Purchaser and will take any action consistent with the terms of this Agreement that may reasonably be requested by Purchaser for the purpose of assigning, transferring, granting, conveying, vesting and confirming ownership in or to Purchaser, or reducing to Purchaser's possession, any or all of the Assets. Without limiting the generality of the foregoing, if requested by the Purchaser the Companies will, and the Shareholder will cause the Companies to, arrange communications between suppliers and customers of the Business and Purchaser.

Section 5.12 <u>Efforts to Satisfy Closing Conditions.</u> Subject to the terms and conditions hereof, each party will use its commercially reasonable efforts to cause the conditions in <u>Article IV</u> to be satisfied and otherwise take such steps as may be required to consummate the Closing as promptly as practicable.

Section 5.13 <u>Pre-Closing Conduct of Business.</u> Except (i) with the prior written consent of the Purchaser, (ii) as required by applicable Laws or (iii) as otherwise explicitly contemplated herein, during the period from the date hereof to the Closing Date, the Companies will, and the Shareholder will cause the Companies to, continue to conduct the Business in the Ordinary Course of Business. Without limiting the generality of the foregoing, neither the Companies nor the Shareholder will, without the prior written consent of the Purchaser:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) amend or otherwise modify their governance documents or adopt or pass any resolutions or actions inconsistent therewith;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) (1) increase the number of persons employed in the Business or transfer or terminate any employees of the Business, (2) increase the compensation payable to any of the employees of the Business, (3) engage any employee or make any material variation to the terms and conditions of employment of any employee or provide or agree to provide any gratuitous payment or benefit to any employee, or (4) amend, modify, adopt or enter into any Employee Benefit Plan;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) fail to comply in any material respect with any applicable Laws governing the assets of the Companies or the Business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) enter into any joint venture, partnership or profit sharing arrangements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) create, allot or issue any equity interests, shares, loan capital, securities convertible into equity interests or shares or any option or right to subscribe in respect of any equity interests, shares, loan capital or securities convertible into equity interests or shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) create, extend, grant or issue any Encumbrance over any of the Assets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) enter into any new Contract constituting a Material Contract, or amend, modify or terminate, other than by expiration of the term thereof, any of the Material Contracts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) sell, transfer or convey any assets of the Companies other than in the Ordinary Course of Business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) incur any Indebtedness with respect to the Business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) assume, guarantee, endorse or otherwise become liable or responsible, whether directly, contingently or otherwise, for the obligations of any other Person;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) change any of the accounting principles or practices used by it;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) change in any way the manner in which the Companies bill and collect accounts receivable, maintain inventory, or pay trade payables;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) settle or compromise any pending or threatened litigation (i) which relates to the transactions contemplated hereby, or (ii) which relates to the assets of the Companies or the Business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) declare, pay or make any dividend or distribution;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) allow any of the Companies' insurance to lapse or do anything to make any policy of insurance void or voidable or that would be likely to increase any premium payable in respect of such policy or prejudice the ability to effect equivalent insurance in the future; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) agree to take any of the actions prohibited in the foregoing clauses (a) through (o).

Section 5.14 <u>Pre-Closing Access; Financial Information.</u> From the date of this Agreement until the earlier of the Closing Date or the date this Agreement is terminated, the Companies will, and the Shareholder will cause the Companies to, give the Purchaser and the Purchaser's representatives, upon reasonable notice, reasonable access during normal business hours to the Companies' facilities and information related to the Business, will make the relevant officers and employees of the Companies available to the Purchaser and its representatives as the Purchaser and its representatives may from time to time reasonably request, and will, if requested by Purchaser, arrange communications between suppliers and customers of the Business and Purchaser.

Section 5.15 <u>Supplemental Information.</u> From the date of this Agreement until the earlier of the Closing Date or the date this Agreement is terminated, the Companies will promptly disclose in writing to the Purchaser any matter hereafter arising which (i) if existing, occurring or known at the date of this Agreement would have been required to be disclosed to the Purchaser or which would render inaccurate any of the representations, warranties or statements set forth in <u>Article II</u> hereof or (ii) constitutes a failure of the Companies or Shareholder to comply with or satisfy any covenant or agreement to be complied with or satisfied by them under this Agreement. In the event that the Companies provides such supplemental information to the Purchaser, the Purchaser may terminate this Agreement in its sole discretion upon written notice to the Companies. Notwithstanding the foregoing, no notice under this <u>Section 5.15</u> will be deemed to have modified any representation and/or warranty or cured any breach of covenant for purposes of determining the satisfaction of the conditions set forth in <u>Article IV</u>, a party's right to indemnification pursuant to <u>Article VI</u>, or a party's right to terminate this Agreement pursuant to <u>Article VII</u>. Three (3) business days prior to the Closing Date, the Companies and Shareholder will deliver to the Purchaser updates to those Schedules called for in <u>Article I</u>, which will be acceptable to the Purchaser in the Purchaser's reasonable discretion.

Section 5.16 <u>Exclusivity.</u> From the date of this Agreement until the earlier of the Closing Date or the date this Agreement is terminated, neither the Companies, nor the Shareholder, nor any of their respective directors, managers, officers, equityholders, representatives, agents or Affiliates will, directly or indirectly, solicit, initiate, encourage, respond favorably to, permit or condone inquiries or proposals from, or provide any confidential information to, or participate in any discussions or negotiations with, any Person (other than the Purchaser, its Affiliates and their respective directors, managers, officers, employees, representatives and agents) concerning (a) any direct or indirect merger, sale of all or substantially all of the assets of the Business, acquisition, business combination, change of control or other similar transaction involving the Business, or (b) any direct or indirect purchase or other acquisition by any Person of all or any portion of the Assets or any equity interest of the Companies or Shareholder other than inventory in the Ordinary Course of Business. From the date of this Agreement until the earlier of the Closing Date or the

date this Agreement is terminated, the Companies and Shareholder will promptly advise the Purchaser of, and communicate to the Purchaser the terms and conditions of (and the identity of the Person making), any such inquiry or proposal received by any of the aforementioned parties.

Section 5.17 <u>Transferred Employees</u>. Following the Closing Date, the Companies will use commercially reasonable efforts to transition the employment of the Transferred Employees to the Purchaser, including by assisting Purchaser with adopting a payroll processing system and benefit plans. Following the Closing Date and until Purchaser provides written notice to the Companies setting forth the completion date for such transition, (i) the Companies will not modify the compensation or benefits of any Transferred Employee and will not terminate the employment of any Transferred Employee without the approval of Purchaser, (ii) the Companies will not change the eligibility of the Employee Benefit Plans that the Transferred Employees currently participate in, (iii) the Transferred Employees will perform services on behalf of, and at the direction of, Purchaser, and (iv) Purchaser will advance funds to the Companies, by wire transfer of funds at least one (1) Business Day before each payroll date of the Companies, for the salary to be paid and for the employee benefits costs and other costs and expenses to be incurred by the Companies with respect to the Transferred Employees' performance of services on behalf of, or at the direction of, Purchaser in the ordinary course during the applicable payroll period to the extent occurring after the Closing Date; <u>provided</u>, <u>however</u>, that with respect to funds advanced pursuant to clause (iv) of this sentence, the Companies hereby agrees to promptly reconcile costs with amounts advanced and, in the event of overpayment, either provide Purchaser with a credit toward future amounts advanced or provide Purchaser with a reimbursement for the amount of the overpayment. In addition, until the Transferred Employees become employees of Purchaser, the Companies hereby agrees to enforce any right held by the Companies with respect to the Transferred Employees relating to non-competition, non- solicitation, non- hire, confidentiality or other similar obligations. For the avoidance of doubt, the Transferred Employees are not third party beneficiaries with respect to this <u>Section 5.17</u>.

**ARTICLE VI** 

**INDEMNIFICATION**

collectively referred to as the "<u>Fundamental Reps</u>") will survive indefinitely. Notwithstanding the above, any claim for indemnification under <u>Section 6.1(a)</u> above made in accordance with this <u>Article VI</u> prior to the expiration of the applicable indemnification period will survive until such matter is resolved. All covenants and agreements which by their terms contemplate performance after the Closing Date will survive the Closing indefinitely, unless specified otherwise by their terms. Notwithstanding anything to the contrary herein or in any Ancillary Agreement, and subject to the limitations set forth in Section 6.5 hereof, the parties agree that under no circumstances shall the Companies and Shareholder jointly or severally be liable for any amount in excess of the Cash Purchase Price plus the value actually received by Shareholder from the Equity Purchase Price.

Section 6.2 <u>Indemnification by Purchaser</u>. Purchaser will indemnify and hold the Companies and Shareholder harmless from and against all Damages to the extent arising out of or in any manner incident, relating or attributable to (a) any inaccuracy of any representation or warranty made by Purchaser in this Agreement; (b) any breach of any covenant or other agreement made by Purchaser in this Agreement; and (c) any Assumed Liability other than to the extent the claim otherwise relates to the Companies' or Shareholder's breach of a representation, warranty, or covenant. Any claim for indemnification pursuant to subsection (a) above will be made on or prior to the two (2) year anniversary of the Closing Date. Notwithstanding the above, any claim for indemnification under <u>Section 6.2(a)</u> above made in accordance with this <u>Article VI</u> prior to the expiration of the applicable indemnification period will survive until such matter is resolved. All covenants and agreements which by their terms contemplate performance after the Closing Date will survive Closing indefinitely, unless specified otherwise by their terms. Notwithstanding anything to the contrary herein or in any Ancillary Agreement, and subject to the limitations set forth in Section 6.5 hereof, the parties agree that under no circumstances shall Purchaser be liable for any amount in excess of the Cash Purchase Price plus the value actually received by Shareholder from the Equity Purchase Price.

Section 6.3 <u>Indemnification Procedures.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) If the facts that give rise to any indemnification hereunder will involve any actual or threatened claim or demand (hereinafter referred to as a "<u>Third-Party Claim</u>") by a Person (including, without limitation, any Tax authority or other Government Entity) other than a party hereto, its Affiliates, or their respective successors or assigns, the party entitled to indemnity hereunder (the "<u>Indemnified Party</u>") will give the party obligated to provide indemnity hereunder ("<u>Indemnifying Party</u>") written notice of such claim (the "<u>Third-Party Notice</u>") promptly after the Indemnified Party will have received written notice thereof from the third party making such claim. Thereafter, the Indemnified Party will deliver to the Indemnifying Party copies of all notices and documents (including court papers) received by the Indemnified Party relating to the Third-Party Claim. The Indemnified Party's failure or delay in providing Third-Party Notice will not relieve the Indemnifying Party of its obligations under this <u>Article VI</u> except to the extent that the Indemnifying Party is materially prejudiced as a result thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Indemnifying Party will have twenty (20) days from receipt of the Third-Party Notice to provide the Indemnified Party with notice that it wishes to assume the defense of the Third- Party Claim and acknowledges liability for such Damages, in which event Indemnified Party will have the right to participate in the defense at its own expense. If the Third-Party Claim is in the form of a pleading requiring an answer, the other party will give such notice at least five (5) Business Days prior to the due date of the answer or other response to the pleading. If the Indemnifying Party fails to give the Indemnified Party timely notice as provided herein, Indemnified Party will have the right to defend against such Third- Party Claim.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) If the Indemnifying Party chooses to defend a Third-Party Claim, Indemnified Party will cooperate in the defense thereof. Such cooperation will include the retention and the provision to the Indemnifying Party of records and information which are reasonably relevant to such Third-Party Claim,

making relevant employees or agents available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder. Whether or not the Indemnifying Party assumes the defense of a Third-Party Claim, Indemnified Party will not admit any liability with respect to, or settle, compromise or discharge, such Third-Party Claim without the prior written consent of the Indemnifying Party (not to be unreasonably withheld). If the Indemnifying Party assumes the defense of a Third-Party Claim, the Indemnifying Party will not agree to any settlement, compromise or discharge of a Third-Party Claim without Indemnified Party's prior written consent (not to be unreasonably withheld).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Notwithstanding anything herein to the contrary, the Indemnifying Party will not be entitled to assume control of the defense of Third-Party Claim, and will pay the reasonable fees and expenses of legal counsel retained by the Indemnified Party (subject to the limitations set forth in this <u>Article VI</u> as applicable when Purchaser is the Indemnified Party), if: (i) the Indemnified Party reasonably believes that an adverse determination of such claim could be detrimental to Indemnified Party's business; (ii) the Indemnified Party reasonably believes that a conflict of interest exists or could reasonably arise which, under applicable principles of legal ethics, could prohibit a single legal counsel from representing both the parties in such proceeding, other than a conflict which may exist due to the underlying nature of the duty to indemnify; (iii) the claim relates to Taxes, criminal or regulatory action, or the claim seeks damages other than monetary damages; or (iv) a court of competent jurisdiction rules that the Indemnifying Party has failed or is failing to prosecute or defend such claim.

Section 6.4 <u>Resolution of Conflicts</u>. In the event an Indemnified Party should have a claim under this <u>Article VI</u> that does not involve a Third-Party Claim, the Indemnified Party will deliver to the Indemnifying Party notice of such claim with reasonable promptness, together with its request forthwith for payment, and the parties will negotiate in good faith to resolve the claim. If no agreement can be reached

after good faith negotiation with respect to such claim within thirty (30) days after the Indemnifying Party's receipt of notice of such disputed claim, either party may pursue any other legal remedies for resolution of the dispute.

Section 6.5 <u>Limitations</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Notwithstanding anything contained in this Agreement to the contrary, no limitations on liability set forth in this <u>Article VI</u> will apply with respect to claims based on fraud or intentional misrepresentation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Notwithstanding the foregoing, the Companies and Shareholder will not be obligated to indemnify and hold the Purchaser Indemnified Parties harmless for a claim pursuant to <u>Section 6.1(a)</u> unless and until the aggregate amount of Damages for all claims pursuant to <u>Section 6.1(a)</u> exceeds $20,000 (the "<u>Basket</u>"), and then the Companies and Shareholder will be liable to the Purchaser Indemnified Parties for all such Damages (expressly not taking into account the Basket), but subject to the Cap (as hereinafter defined). Notwithstanding the foregoing, the limitations set forth in the preceding sentence do not apply to Damages related to or arising out of any claims asserted by the Purchaser Indemnified Parties for breaches of Fundamental Reps or claims brought pursuant to Sections other than <u>Section 6.1(a)</u>; <u>provided</u>, <u>however</u>, that the maximum aggregate liability of the Companies and Shareholder for all claims made by the Purchaser Indemnified Parties pursuant to <u>Section 6.1(a)</u> (excluding claims based on fraud or intentional misrepresentation) will not exceed the Purchase Price (the "<u>Cap</u>").

Section 6.6 <u>Additional</u> <u>Terms</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Notwithstanding anything to the contrary herein, the right of any party hereto to indemnification, payment of Damages or other remedies will not be affected in any way by any investigation conducted or knowledge (whether actual, constructive or imputed) acquired at any time by such party with respect to the accuracy or inaccuracy of or compliance with or performance of, any representation, warranty, covenant, agreement or obligation or by the waiver of any condition.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Notwithstanding anything to the contrary herein, for the purposes of determining the existence of any breach of a representation, warranty, covenant or agreement made by the Companies or Shareholder or for determining Damages, each representation, warranty, covenant, and agreement made by the Companies and Shareholder (whether made herein or in any other document, agreement or instrument delivered in connection herewith or therewith) will be deemed made without any qualifications or limitations as to materiality and, without limiting the foregoing, the word "material" and words of similar import will be deemed deleted from any such representation, warranty, covenant or agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Purchaser will have the right to offset any indemnifiable Damages against (i) the Holdback, (ii) the Equity Purchase Price, or (iii) any other payment due to the Companies and Shareholder, such as the Business Commission Agreement, in each case on a dollar-for-dollar basis.

Section 6.7 <u>Impact on Purchase Price**.**</u> Any payments of indemnification under this <u>Article VI</u> will be deemed to be adjustments to the Purchase Price.

**ARTICLE VII** 

**TERMINATION**

Section 7.1 <u>Termination.</u> This Agreement may be terminated at any time on or prior to the Closing Date:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) with the mutual written consent of the Purchaser and Companies; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) by either the Purchaser or the Companies if the Closing will not have occurred within thirty (30) days following the execution of this Agreement; <u>provided</u>, <u>however</u>, that the right to terminate this Agreement under this <u>Section 7.1(b)</u> will not be available to any party whose failure to fulfill any obligation under this Agreement will have been a cause of, or will have resulted in, the failure of the Closing to occur on or prior to such date; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) by the Companies, if the Purchaser breached or failed to perform any of its representations, warranties, covenants or other agreements contained in this Agreement, which breach or failure to perform (A) would give rise to the failure of any of the conditions set forth in <u>Section 4.2</u> and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) has not been or is incapable of being cured by the Purchaser within fifteen (15) days after its receipt of written notice thereof from the Companies; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) by the Purchaser, (i) in accordance with <u>Section 5.15</u>, or (ii) if the Companies or Shareholder breached or failed to perform any of their respective representations, warranties, covenants or other agreements contained in this Agreement, which breach or failure to perform (A) would give rise to the failure of any of the conditions set forth in <u>Section 4.1</u> and (B) has not been or is incapable of being cured by the Companies or Shareholder within fifteen (15) days after its receipt of written notice thereof from the Purchaser.

Section 7.2 <u>Effect of Termination.</u> If this Agreement is terminated pursuant to <u>Section 7.1</u>, this Agreement will become void and of no effect with no liability on the part of any party except that termination will not relieve any party of any liability or damages resulting from any breach by that party of this Agreement.

**ARTICLE VIII** 

**MISCELLANEOUS**

Section 8.1 <u>Amendment and Modification</u>. This Agreement may be amended only by a written agreement signed by Purchaser, the Companies and the Shareholder at any time with respect to any of the terms contained herein.

Section 8.2 <u>Severability</u>. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable Law, but if any provision of this Agreement or the application of any such provision to any Person or circumstance is held to be prohibited by, illegal or unenforceable under applicable Law or rule in any respect by a court of competent jurisdiction, such provision will be ineffective only to the extent of such prohibition, illegality or unenforceability, without invalidating the remainder of such provision or the remaining provisions of this Agreement. Furthermore, in lieu of such illegal, invalid or unenforceable provision, there will be added automatically as a part of this Agreement a legal, valid and enforceable provision as similar in terms to such illegal, invalid, or unenforceable provision as may be possible.

Section 8.3 <u>Execution in Counterparts</u>. This Agreement may be executed with original, facsimile, or .pdf signatures in one or more counterparts, each of which will be considered an original instrument, but all of which will be considered one and the same agreement, and will become binding when one or more counterparts have been signed by each of the parties and delivered to each of the Companies and Purchaser.

Section 8.4 <u>Successors and Assigns; Public Disclosure</u>. This Agreement and all of the provisions hereof will be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns, except that neither this Agreement nor any of the rights, interests or obligations under this Agreement may be assigned or delegated by the Companies or Shareholder without the prior written consent of Purchaser. Notwithstanding the foregoing, (a) Purchaser may assign in whole or in part its rights and obligations pursuant to this Agreement to one or more of its Affiliates, (b) Purchaser may assign this Agreement and its rights and obligations under this Agreement in connection with a merger or consolidation involving Purchaser, or in connection with a sale of substantially all of the equity or assets of Purchaser or other disposition of substantially all of the Business, and (c) Purchaser may assign any or all of its rights pursuant to this Agreement or the ancillary documents hereto, including its rights to indemnification, to any of its lenders as collateral security. Neither the Companies nor Shareholder will release any public statement concerning this Agreement or the transactions contemplated hereby without the prior written consent of the Purchaser except as may be required by applicable Law.

Section 8.5 <u>Waivers</u>. Any term or provision of this Agreement may be waived, or the time for its performance may be extended, by the party or parties entitled to the benefit thereof, in each case in writing. The failure of any party hereto to enforce at any time any provision of this Agreement will not be construed to be a waiver of such provision, nor in any way to affect the validity of this Agreement or any part hereof or the right of any party thereafter to enforce each and every such provision. No waiver of any breach of this Agreement will be held to constitute a waiver of any other or subsequent breach.

Section 8.6 <u>Notices</u>. All notices, demands or other communications to be given or delivered under or by reason of the provisions of this Agreement will be in writing and will be deemed to have been given when delivered personally to the recipient or when sent by electronic delivery (with confirmation of receipt), or one day after being sent to the recipient by reputable overnight courier service (charges prepaid). Such notices, demands and other communications will be sent to the parties at the addresses indicated below or to such other address or to the attention of such other Person as the recipient party has specified by prior written notice to the sending party. All notices, demands and other communications hereunder may be given by any other means (including electronic mail), but will not be deemed to have been duly given unless and until it is actually received by the intended recipient.

If to Purchaser, to:

1025 Old Country Road, Suite 421

Westbury, NY 11590

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.833.328.6477 www.favocapital.com info@favocapital.com

If to the Companies or Shareholder, to:

4300 N. University Drive Suite D-105 Lauderhill Florida 33351

Section 8.7 <u>Entire Agreement</u>. This Agreement and the Ancillary Agreements (including the Schedules, the Companies Disclosure Schedule and other documents referred to herein and therein) embody the entire agreement and understanding of the parties hereto in respect of the subject matter hereof and thereof and supersede all prior agreements and understandings, both written and oral, among the parties, or between any of them, with respect to the subject matter hereof and thereof.

Section 8.8 <u>No Third-Party Beneficiaries</u>. This Agreement is not intended to, and does not, create any rights or benefits of any party other than the parties hereto.

Section 8.9 <u>Governing Law; Forum; Waiver of Jury Trial</u>. All issues and questions concerning the construction, validity, enforcement and interpretation of this Agreement and the Schedules and Companies Disclosure Schedule hereto will be governed by, and construed in accordance with, the Laws of the State of Nevada without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of Nevada or any other jurisdiction) that would cause the application of the Laws of any jurisdiction other than the State of Nevada. In furtherance of the foregoing, the internal Laws of the State of Nevada will control the interpretation and construction of this Agreement (and all Schedules and the Companies Disclosure Schedule hereto), even though under that jurisdiction's choice of law or conflict of law analysis, the substantive Law of some other jurisdiction would ordinarily apply. Any judicial proceeding brought with respect to this Agreement must be brought in any court of competent jurisdiction in the State of Nevada, and, by execution and delivery of this Agreement, each party (a) accepts, generally and unconditionally, the exclusive jurisdiction of such courts and any related appellate court, and irrevocably agrees to be bound by any judgment rendered thereby in connection with this Agreement, and (b) irrevocably waives any objection it may now or hereafter have as to the venue of any such suit, action or proceeding brought in such a court or that such court is an inconvenient forum. Nothing in this Section, however, shall affect the right of any party to serve legal process in any other manner permitted by law or at equity. Each party agrees that a final judgment in any action or proceeding so brought shall be conclusive and may be enforced by suit on the judgment or in any other manner provided by law or at equity. EACH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT.

Section 8.10 <u>Confidentiality</u>. Each party hereto will hold, and will use its best efforts to cause its Affiliates, and their respective representatives to hold, in strict confidence, unless (a) compelled to disclose by judicial or administrative process or by other requirements of Law or (b) disclosed in an Proceeding brought by a party hereto in pursuit of its rights or in the exercise of its remedies hereunder, all documents and information concerning the other party or any of its Affiliates furnished to it by the other party or such other party's representatives in connection with this Agreement or the Contemplated Transactions, except to the extent that such documents or information can be shown to have been (x) previously known by the party receiving such documents or information, (y) in the public domain (either prior to or after the furnishing of such documents or information hereunder) through no fault of such receiving party or (z) later acquired by the receiving party from another source if the receiving party is not aware that such source is under an obligation to another party hereto to keep such documents and information confidential; provided that following the Closing the foregoing restrictions will not apply to Purchaser's and its Affiliates' use of documents and information concerning the Assets and Business or its ability to announce the transaction.

Section 8.11 <u>Remedies</u>. Except as expressly provided in this Agreement, any Person having any rights under any provision of this Agreement will be entitled to enforce such rights specifically (without posting a bond or other security), to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights granted by Law. Except as expressly provided in this Agreement, all such rights and remedies will be cumulative and non-exclusive, and may be exercised singularly or concurrently. The parties acknowledge that any breach of this Agreement may cause substantial irreparable harm to the other party. Therefore, this Agreement may be enforced in equity by specific performance, temporary restraining order and/or injunction. The rights to such equitable remedies will be in addition to all other rights or remedies that a party may have under this Agreement or under applicable Law.

Section 8.12 <u>Attorney-Client Privilege</u>**.** The parties intend that, at all times after the Closing, Purchaser shall have the right in its discretion to assert or waive any attorney work product protections, attorney-client privileges and similar protections and privileges relating to the Assets and Assumed Liabilities.

Section 8.13 <u>Companies Disclosure Schedule, Schedules and Exhibits</u>. The Companies Disclosure Schedule and the other schedules and exhibits attached to this Agreement are made a part of this Agreement as if set forth in full herein. The Companies Disclosure Schedule is arranged in sections corresponding to the numbered and lettered sections contained in <u>Article II</u>, as applicable. Any information disclosed under any section of the Companies Disclosure Schedule shall be deemed to be disclosed and incorporated in any other section thereof if such information is cross referenced in such other section and it is reasonably and readily apparent on the face of such disclosure that such disclosure should be included in such other section. Capitalized terms used in the Companies Disclosure Schedule and not otherwise defined shall have the meanings ascribed to such terms as set forth in this Agreement.

Section 8.14 <u>Construction</u>. The parties hereto have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties hereto and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement. Any reference to any federal, state, local, or foreign statute or law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise.

**ARTICLE IX** 

**DEFINITIONS**

Section 9.1 <u>Definitions</u>. As used in this Agreement, the following words and terms will have the meanings specified or referred to below:

"<u>Affiliate</u>" of any particular Person means any other Person controlling, controlled by or under common control with such particular Person, where "<u>control</u>" means the possession, directly or indirectly, of the power to direct the management and policies of a Person whether through the ownership of voting securities, contract or otherwise.

"<u>Ancillary Agreements</u>" means the Bill of Sale, Assignment and Assumption Agreement, IP Assignment Agreement, Transition Services Agreements, Business Commission Agreement and any other agreements required under this Agreement.

"<u>Business Day</u>" means any day except Saturday, Sunday or any day on which banks are generally not open for business in the city of New York, New York.

"<u>Cash</u>" means cash and cash equivalents (excluding any cash required to cover checks or other similar payments that have been made by the Companies but have not yet cleared).

"<u>Code</u>" means the United States Internal Revenue Code of 1986, as amended.

"<u>Consent</u>" means any approval, permission, consent, ratification, waiver or other authorization.

"<u>Contemplated Transactions</u>" means all of the transactions contemplated by this Agreement and the Ancillary Agreements, including but not limited to the issuance of the Equity Purchase Price.

"<u>Contract</u>" means any oral or written contract, agreement, instrument or other document to which a Person is a party or by which it or its assets is bound.

"<u>Current Assets</u>" means all current assets of the Companies to the extent any such item is considered to be a "current asset" in accordance with GAAP and is included in the Working Capital Methodology.

"<u>Current Liabilities</u>" means all current liabilities of the Companies to the extent any such item is considered to be a "current liability" in accordance with GAAP and is included in the Working Capital Methodology.

"<u>Encumbrances</u>" means all mortgages, liens, pledges, security interests, charges, claims, restrictions and encumbrances of any nature whatsoever.

"<u>Environmental Laws</u>" means any applicable Law, order or binding agreement with any Government Entity: (a) relating to pollution (or the cleanup thereof) or the protection of natural resources, endangered or threatened species, human health or safety, or the environment (including ambient air, soil, surface water or groundwater, or subsurface strata); or (b) concerning the presence of, exposure to, or the management, manufacture, use, containment, storage, recycling, reclamation, reuse, treatment, generation, discharge, transportation, processing, production, disposal or remediation of any Hazardous Substances.

"<u>GAAP</u>" means United States generally accepted accounting principles consistently applied, as in effect from time to time.

"<u>Governing Documents</u>" means, with respect to any particular entity, (a) if a corporation, the articles or certificate of incorporation and the bylaws; (b) if a limited liability Companies, the articles of organization or certificate of formation and operating agreement, member control agreement or limited liability Companies agreement; or (c) if another type of Person, any other charter or similar document adopted or filed in connection with the creation, formation or organization of the Person; and (d) any amendment or supplement to any of the foregoing.

"<u>Government Entity</u>" means any federal, state, local or foreign government, any political subdivision thereof or any court, administrative or regulatory agency, department, instrumentality, body or commission or other governmental authority or agency, domestic or foreign.

"<u>Hazardous Substances</u>" means: (a) any material, substance, chemical, waste, product, derivative, compound, mixture, solid, liquid, mineral or gas, in each case, whether naturally occurring or manmade, that is hazardous, acutely hazardous, toxic, or words of similar import or regulatory effect under Environmental Laws; and (b) any petroleum or petroleum-derived products, radon, radioactive materials or wastes, asbestos in any form, lead or lead-containing materials, urea formaldehyde foam insulation or polychlorinated biphenyls.

"<u>Indebtedness</u>" means, with respect to any Person at any date, without duplication: (a) all obligations of such Person for borrowed money or in respect of loans or advances; (b) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments; (c) all obligations of such Person that are not characterized as current liabilities under GAAP; (d) all obligations in respect of letters of credit, whether or not drawn, and bankers' acceptances issued for the account of such Person; (e) all capital lease liabilities of such Person determined in accordance with GAAP; (f) all obligations of such Person secured by a contractual lien; (g) all guarantees of such Person in connection with any of the foregoing; or (h) any accrued interest, prepayment premiums, or penalties or other costs or expenses related to any of the foregoing.

"<u>Insider</u>" means (a) any officer, manager, director or Shareholder of the Companies or the Shareholder; (b) any individual related by blood, marriage or adoption to any individual listed in clause (a) hereof; or (c) any Person in which any individual listed in clauses (a) or (b) hereof has a beneficial interest.

"<u>Knowledge</u>" means the knowledge of such Person after reasonable inquiry and "<u>Knowledge</u>" as it is applied to the Companies or a Shareholder, means the knowledge of Robin Camus, in each case after reasonable inquiry.

"<u>Laws</u>" means any federal, state, local or foreign law, code, regulation, rule or decree. "<u>Liability</u>" means, with respect to any Person, any liability or obligation of such Person of any kind, character or description, whether known or unknown, absolute or contingent, accrued or unaccrued, disputed or undisputed, liquidated or unliquidated, secured or unsecured, joint or several, due or to become due, vested or unvested, executory, determined, determinable or otherwise, and whether or not the same is required to be accrued on the financial statements of such Person.

"<u>Material Adverse Effect</u>" means any event, change, circumstance, effect, or state of facts that, when considered individually or in the aggregate, is, or is likely to be, materially adverse to

&nbsp;&nbsp;&nbsp;&nbsp;(a) the Business, financial condition, prospects, or results of operations of the Companies, taken as a whole, or (b) the ability of the Companies or Shareholder to perform their obligations under this Agreement or to consummate the transactions contemplated by this Agreement.

"<u>Order</u>" means any order, injunction, judgment, decree, ruling, assessment or arbitration award of any Government Entity or arbitrator.

"<u>Ordinary Course</u>" means the ordinary course of business of the Companies consistent with past practice, including with regard to nature, frequency and magnitude.

"<u>Outstanding Transaction Expenses</u>" means any unpaid fees and expenses payable by or on behalf of the Companies or Shareholder relating to the negotiation, execution, and delivery of any letter of intent or term sheet, this Agreement, and any other Ancillary Agreements, as well as the consummation of the transactions contemplated hereby and thereby, that are incurred by or on behalf of, or charged to the Companies or Shareholder, including (A) all legal, tax, accounting, financial, any brokerage fees, commissions, finders' fees, investment banking fees or financial advisory fees, and other advisory and consulting fees, (B) the payment of any assignment or consent fees, (C) any obligations or agreements of the Companies for payments relating to a change of control of the Companies, "stay" bonus, transaction retention, or similar obligations or payments that may be owed or are otherwise payable (whether or not legally obligated to be paid) to any Person, in each case, including the employer's portion of any payroll, social security, unemployment or similar Taxes related to such payments, and (D) other amounts that may become payable by the Companies or Shareholder in connection with the negotiation, execution, and delivery of this Agreement and the Ancillary Agreements, or the consummation of the transactions contemplated hereby and thereby.

"<u>Person</u>" means any individual, corporation, partnership, joint venture, limited liability Companies, trust, unincorporated organization, Government Entity or other legally recognized entity.

"<u>Proceeding</u>" means any action, arbitration, audit, hearing, investigation, litigation or suit (whether civil, criminal, administrative, judicial or investigative, whether formal or informal, whether public or private) commenced, brought, conducted or heard by or before, or otherwise involving, any Government Entity or arbitrator.

"<u>Related Party Transaction</u>" means any Contract, arrangement, or understanding under which the Companies or any of its Insiders (a) has borrowed any monies from or has outstanding any indebtedness or other similar obligations to the Companies or its Affiliates; (b) owns any direct or indirect interest of any kind in, or is a governor, director, manager, officer, member, employee, partner, equity owner, consultant or lender to, or borrower from, or has the right to participate in the management, operations or profits of, any Person that (x) is a competitor, supplier, customer, distributor, lessor, tenant, creditor or debtor of the Companies, or (y) participates in any transaction to which the Companies are a party; or (c) is or has been a party to any Contract, arrangement, understanding or transaction with the Companies.

"<u>Tax Return</u>" means any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.

"<u>Taxes</u>" means all taxes, assessments, charges, duties, fees, levies and other governmental charges, including income, franchise, capital stock, real property, personal property, tangible, withholding, employment, payroll, social security, social contribution, unemployment compensation, disability, transfer, sales, use, excise, gross receipts, value-added and all other taxes of any kind, whether disputed or not, and any charges, interest or penalties imposed thereon, and including any obligation to indemnify, assume or otherwise succeed to any tax liability of any other Person.

"<u>Working Capital Target</u>" means an amount equal to Twenty Thousand Dollars ($20,000).

[*Signatures on Next Page*]

IN WITNESS WHEREOF, each of the parties has caused this Asset Purchase Agreement to be duly executed as of the day and year first above written.

---

| |
|:---|
| **PURCHASER:** |
| **FAVO CAPITAL, INC.** |
| By: /s/ Vincent Napolitano |
| Name: Vincent Napolitano |
| Title: CEO |
| **COMPANIES**: |
| By: /s/ Robin Nadeau-Camus |
| Name: Robin Nadeau-Camus |
| Title: Owner of DBOSS FUNDING, LLC |
| By: /s/ Robin Nadeau-Camus |
| Name: Robin Nadeau-Camus |
| Title: Owner of LandTech CRM Solutions, LLC |
| By: /s/ Robin Nadeau-Camus |
| Name: Robin Nadeau-Camus |
| Title: Owner of Believe PMF EIRL |
| **SHAREHOLDER:** |
| By: /s/ Robin Nadeau-Camus |
| Name: Robin Nadeau-Camus |
| Title: 100% Owner of all above listed offers |

---

## Exhibit 2.9

**MEMBERSHIP INTEREST PURCHASE AGREEMENT**

This Membership Interest Purchase Agreement (this **"Agreement")** is entered into as of July 11, 2025, by and among **Block 40 Managers, LLC,** a Florida limited liability company (the **"Company"), Favo Capital, Inc.,** a Nevada corporation **("Buyer"),** the members of the Company listed on Schedule I attached hereto **("Sellers"),** and **Charles R. Abele, Jr.,** as Sellers' Representative (the **"Sellers' Representative").**

**Recitals**

**WHEREAS,** the Company owns 20% of the outstanding membership interests of Block 40, LLC, a Florida limited liability company that, together with its wholly owned subsidiaries, operates a mixed use real estate development in Hollywood, Broward County, Florida known as "Block 40" (the **"Business").**

**WHEREAS,** Sellers own one hundred percent (I 00%) of the outstanding membership interests of the Company (the **"Membership Interests");** and

**WHEREAS,** Sellers desire to sell and Buyer desires to acquire the Company by means of Buyer's acquisition of the Membership Interests as provided herein (the **"Transaction"),** with the Business of the Company continuing as a wholly-owned subsidiary of Buyer.

**NOW, THEREFORE,** for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

**ARTICLE I**

**DEFINITIONS**

For purposes of this Agreement, the following terms shall have the meanings set forth below:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) **"Affiliate"** shall have the meaning ascribed to such term in Rule 405 under the

Securities Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) **"Allocation Schedule"** means the schedule attached hereto as <u>Exhibit A,</u> setting

forth, with respect to each Seller, (a) the total number of shares of Buyer Common Stock to be issued to such Seller at Closing and (b) the dollar value of such shares based on the agreed-upon valuation, in each case as of the Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) **"Business Day"** means any day other than a Saturday, Sunday, or a day on which banks in Florida or Nevada are authorized or required by law to close.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) **"Closing Date"** means the date on which the Closing occurs as provided in Section

&nbsp;&nbsp;&nbsp;&nbsp;1.2. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) **"Governmental Entity"** means any supra-national, national, state, municipal, or

local government (including any subdivision, court, administrative agency, competent authority, notified body, commission, or other authority thereof) or any quasi-governmental body exercising any regulatory, taxing, importing, or other governmental or quasi-governmental authority.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) **"Knowledge"** means, with respect to Sellers, (i) the actual knowledge of Charles

&nbsp;&nbsp;&nbsp;&nbsp;R. Abele, Jr. and Peter Jago, and (ii) what any of such named individuals would be reasonably expected to know upon the exercise of reasonable inquiry of the management members of the Company who would

customarily have knowledge of the matter at issue and, with respect to Buyer, (i) the actual knowledge of the senior management personnel of Buyer and (ii) what such personnel would be reasonably expected to know upon the exercise of reasonable due inquiry.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) **"Material Adverse Effect"** shall mean (a) a material adverse effect on the financial condition, properties, business, or results of operations of the Company or Buyer, as applicable, taken as a whole, or (b) a material adverse effect on the ability of the Company or Buyer to perform its respective material obligations under this Agreement; provided, however, that a Material Adverse Effect shall not include any event, change, effect, development, condition, or occurrence arising out of or relating to (i) general economic or political conditions in the United States of America, or general regulatory, financial, banking, credit or securities market conditions, including any disruption thereof and any interest or exchange rate fluctuations, (ii) conditions generally applicable to the industry in which the Company operates, (iii) the announcement ofthis Agreement or the transactions contemplated hereby <u>(provided,</u> that any such announcement made by a Seller or the Company is made in accordance with the terms of this Agreement), (iv) resulting from any changes in applicable Laws or accounting rules or interpretations thereof, (v) resulting from natural disasters, acts of terrorism or war (whether or not declared), or epidemics or pandemics or (vi) arising out of any action taken or omitted to be taken at the written request of Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) **"Permitted Liens"** means (a) Liens for Taxes, fees, assessments and other charges of Governmental Entities not due and payable as ofthe Closing Date, which remain payable without penalty as of the Closing Date, or which are being contested in good faith by appropriate proceedings and for which adequate reserves are established in the Financial Statements (or, if arising after the date of the Financial Statements, the relevant financial records of the Company and its Subsidiaries made available to Buyer prior to the Closing Date), (b) materialmens', mechanics', workmens', landlords', repairmens', warehousemen', carriers' and other similar Liens arising or incurred in the ordinary course of business or by operation of Law, in each case, if the underlying obligations are not delinquent or are being challenged in good faith pursuant to appropriate proceedings and for which adeqnate reserves are established in the Financial Statements (or, if arising after the date of the Financial Statements, the relevant financial records of the Company and its Subsidiaries made available to Buyer prior to the Closing Date), (c) statutory Liens for landlords for amounts which are not yet due and payable, (d) rights, easements, covenants, conditions, restrictions and other similar matters of record affecting title to the Leased Real Property which do not or would not materially impair the use or occupancy of the Leased Real Property in connection with the operation of the business conducted thereon, (e) Liens consisting of pledges or deposits required in the ordinary course of business in connection with workers' compensation, unemployment insurance and other social security legislation or to secure liability to insurance carriers, (t) Liens on any property acquired or held by the Company or any of its Subsidiaries, securing indebtedness incurred or assumed by a party for the purpose of financing (or refinancing) all or any part of the cost of the Company's or any of its Subsidiaries' acquisition of property, which indebtedness is recorded on the Financial Statements (or, if arising after the date of the Financial Statements, the relevant financial records of the Company and its Subsidiaries made available to Buyer prior to the Closing Date), (g) any interest or title of a lessor or sublessor, as lessor or sublessor, under any lease and any precautionary uniform commercial code financing statements filed under any lease, and (h) non-monetary imperfections of title which are not material in character, amount or extent and which do not materially detract from the use, occupancy or value of, or materially interfere with the Company's or its applicable Subsidiary's present, or their prospective, use of the assets subject thereto or affected thereby, Liens disclosed on the face of the Financial Statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) **"Person"** means any individual, corporation, company, partnership, trust, incorporated or unincorporated association, joint venture, or other entity of any kind.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;U) **"Pro-Rata Portion"** means, with respect to any Seller, a fraction, expressed as a percentage, the numerator of which is the portion of the Purchase Price allocable to such Seller, and the

denominator of which is the sum ofthe Purchase Price, as set forth in the Waterfall Spreadsheet under the heading "Pro-Raia Portion," For the avoidance of doubt, the sum of the respective Pro-Raia Portions of all of the Sellers shall be equal to 100%.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) **"Transaction Documents"** means this Agreement and all other agreements, instnunents, and doctunents to be executed and delivered by the Company, Sellers, or Buyer in connection with the transactions contemplated hereby.

**ARTICLE 2**

**SALE AND PURCHASE OF MEMBERSHIP INTERESTS; CLOSING,**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.1** **<u>Sale and Purchase.</u>** On the Closing Date (as hereinafter defined), Sellers shall sell to Buyer, and Buyer shall purchase from Sellers, the Membership Interests for the Purchase Price (as defined in Section 2.3).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.2** **<u>Closing Date.</u>** The consummation ofthe transactions contemplated hereby (the **"Closing")** will take place at the offices of the Company at 10:00 AM local time on the date hereof or such other date and time that is agreed to in writing by the Company and Buyer (the **"Closing Date"),** provided that all conditions set forth in Article 6 have either been satisfied or, in the case of conditions not satisfied, waived in writing by the party entitled to the benefit of such conditions. The Closing may be conducted remotely by electronic exchange of documents and signatures. At the Closing, Sellers shall deliver, or cause to be delivered, to Buyer or its designees an membership interest transfer powers transferring to Buyer good title to the Membership Interests, free and clear of any liens, pledges, options, security interests, trusts, enctunbrances, or other rights or interests of any person or entity, and Sellers shall be responsible for any transfer, documentary, or similar taxes attributable to such transfer ofthe Membership Interests, and Buyer shall thereupon pay to Sellers the Purchase Price.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.3** **<u>Purchase Price.</u>** The Purchase Price shall be payable on a pro rata basis to the Sellers as follows: 4,854,197 shares of common stock in Buyer valued by the parties at $0.76 per share the **"Equity Consideration").** The Buyer and Sellers mutually agree that the value for the shares of Buyer shall be as stated above. The parties acknowledge and agree that this price is determined solely by their mutual consent and is not based on any formal valuation, appraisal, or independent assessment of Buyer's financial condition, market value, or other economic factors. The parties further agree that they have independently evaluated the transaction and are not relying on any representations or warranties regarding the value ofthe shares beyond their mutual agreement as set forthherein. At Closing, Buyer shall deliver the Purchase Price in the form of stock certificates or book-entry shares, as applicable, registered in the names of the Sellers in the proportions set forth on Schedule I. Any unpaid interest or management fees due for the month of June, 2025, will be issued in common shares pro rata upon closing valued at $0.76 per share.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.4** **<u>Adjustments to the Purchase Price.</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Within thirty (30) days following the closing of this transaction, Buyer and Seller will agree on the selection of and engagement of a qualified appraiser to establish the market value of the election of the Property and the Business to confirm that the price is supported by the market. IF the appraiser determines that the value is less than the Purchase Price then Buyer may adjust the Purchase Price by an amount not to exceed the number of shares held in escrow pursuant to paragraph 2.6 below. In the event the parties cannot agree on and engage an appraiser within said thirty (30) day period then each party will engage an appraiser of their election and within sixty (60) the appraiser will agree on the value or the parties will utilize the average of the two appraisals as the agreed market value for purposes of this paragraph.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Within thirty (30) days following the closing of this transaction, Buyer and Seller will each engage certified public accounting firms to investigate the requirement of Buyer to covert any portion of the Purchase Price to goodwill and write same off within a one year period. The CPA's will reach a consensus or they will jointly select the third and that CPA's opinion will control. If the final opinion is that there is a required goodwill write off within a one year period then Buyer shall receive a credit to the Purchase Price up to a maximum credit of $4,017,858 via stock in the Escrow per 2.6 below and not to exceed the stock held in that Escrow.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.5** **<u>Required Cash.</u>** The Business shall have cash as of the Closing Date (the **"Closing Date** **Cash")** in an amount equal to or greater than $100,000 (the **"Required Cash Amount").** On or before thirty (30) days following the Closing Date, the Purchase Price shall be either (a) increased in the amount by which the Closing Date Cash exceeds the Required Cash Amount, if any, or (b) decreased in the amount by which the Closing Date Cash is less than the Required Cash Amount, if any, with such adjustment payable in cash (or, at the election of Seller's Representative, as Equity Consideration) to Buyer or Sellers, as the case may be. The Closing Date Cash shall include escrowed sums.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.6** **<u>Escrow.</u>** To secure potential adjustments or indemnification obligations under Article 7, Buyer shall withhold 10% of the shares comprising the Purchase Price (the **"Escrow Shares"),** and within fifteen (15) days from the Closing Date, shall deposit them with an escrow agent mutually agreed by the parties pursuant to an escrow agreement. The Escrow Shares shall be held for 12 months following the Closing Date, subject to release or distribution as provided in the escrow agreement (the **"Escrow Agreement")** and Article 7.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.7** **<u>Deliveries at Closing by Sellers and the Company.</u>** At the Closing, and upon satisfaction or waiver of the conditions set forth in Sections 6.1 and 6.3, each of the Sellers and the Company will deliver or cause to be delivered the instruments, consents, certificates, and other documents required of each of them by Section 6.2.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.8** **<u>Deliveries at Closing by Boyer.</u>** At the Closing, and upon satisfaction or waiver of the conditions set forth in Sections 6.1 and 6.2, Buyer will deliver or cause to be delivered the instruments, consents, certificates, and other documents required of it by Section 6.3.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.9** **<u>Allocation Schedule.</u>** Each Seller hereby acknowledges and agrees that (i) the Allocation Schedule is complete and accurate in all respects and shall govern the allocation among the Sellers (and shall not serve as a limitation as to Buyer's rights under this Agreement) of all payments to or from the Sellers that are contemplated by this Agreement in accordance with the priorities set forth in the Operating Agreement (as in effect on the date ofthis Agreement), (ii) the amounts set forth in the Allocation Schedule for distribution to such Seller are in compliance with the Operating Agreement, (iii) the consideration payable to such Seller as set forth in the Allocation Schedule constitutes all consideration payable to such Seller in connection with the consummation of the Transaction and (iv) after the Closing, such Seller (and any direct or indirect holder of Membership Interests of such Seller) will have no right, title or interest in or to any other payment in consideration of the Membership Interests, Buyer or any of their respective Affiliates. The Company and the Sellers acknowledge and agree that to the extent any allocation of payments provided for in this <u>Section 2.8</u> or in the Allocation Schedule is inconsistent with the Operating Agreement, then this Agreement, together with the Allocation Schedule, shall be deemed to be an amendment to the Operating Agreement, properly authorized and adopted pursuant to the provisions of the Operating Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.10** **<u>Consent to Transactions.</u>** Each Seller and the Company hereby consent to the transfers of the equity interests of the Company contemplated herein and the payment of the other amounts contemplated herein in compliance with the terms ofthis Agreement and the other Transaction Documents, and irrevocably waive any Liens or restrictions on transfer arising under the Operating Agreement in favor of such Person relating to their equity securities of the Company or its Subsidiaries and any other rights such Person may have arising from or relating to such transfers (including any rights of first refusal, co- sale or similar rights and any rights to receive notices, opinions or similar documentation in advance of or in connection with such transfers or contributions) or such payments, whether arising pursuant to the Operating Agreement, any other Organizational Documents ofthe Company or any of its Subsidiaries, any agreement pursuant to which any such equity securities were issued or pursuant to applicable Law;

<u>provided, that</u> this waiver shall not affect any rights any such party may have against the other Parties under this Agreement or under any other Transaction Documents.

**ARTICLE 3**

**REPRESENTATIONS AND WARRANTIES OF SELLERS.**

References in this Article 3 to "Sellers' Knowledge" are as defined in Section I. Except as set forth in the Disclosure Schedules, which shall disclose exceptions to the representations and warranties organized according to the corresponding sections of this Agreement, the Sellers jointly and severally (except with respect to Section 3.23, as to which section each Seller represents and warrants severally in his, her, or its individual capacity) represent and warrant to Buyer that as of the date hereof:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.1** **<u>Organization and Good Standing.</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company is a limited liability company duly organized, validly existing, and in good standing under the laws of the State of Florida, with full limited liability company power and authority to carry on the Business as it is now and has since its organization been conducted, and to own, lease, or operate its assets and properties. The Company is duly qualified to do business and is in good standing in every jurisdiction in which the character of the properties owned or leased by it or the nature of the business conducted by it makes such qualification necessary, except where failure to be so qualified would not have a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Aside from Block 40, LLC and Block 40 Property, LLC, the Company has no subsidiaries and does not otherwise hold any equity, membership, partnership, joint venture, or other ownership interest in any Person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Company has made available to Buyer a true and correct copy of the articles of organization and operating agreement of the Company, each as amended to date (collectively, the **"Charter Documents").** The Company is not in material violation of any of the provisions of its Charter Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.2** **<u>Ownership of Membership Interests.</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Sellers own all of the outstanding membership interests of the Company (the **"Membership Interests")** in the respective amounts set forth on Schedule I, free and clear of all liens, encumbrances, security interests, pledges, conditional or installment sale agreements, mortgages, charges, and/or any other claim of third parties of any kind (collectively **"Liens").** The Membership Interests constitute 100% ofthe issued and outstanding membership interests in the Company. After giving effect to the transactions contemplated by this Agreement, Buyer will own 100% of the Membership Interests. All of the Membership Interests have been, and will be at the Closing, duly authorized, validly issued and outstanding, and fully paid. None of the Sellers has granted, issued, or agreed to grant or issue and/or will grant, issue, or agree to grant or issue auy other equity interest in the Company and there are no, nor will there be at the Closing, outstanding options, warrants, subscription rights, securities that are convertible into or exchangeable for, or any other commitments of any character relating to, any equity interest in the Company (collectively **"Equity Rights").** No Membership Interests are, or will be at the Closing, subject to any right of first refusal, preemptive, subscription, or other similar right under any provision of Applicable Law or any agreement (collectively **"Preemptive Rights").** There are no voting restrictions or restrictions on transfer of the Membership Interests (collectively **"Restrictions").**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) There are no obligations, contingent or otherwise, of the Company to repurchase, redeem, or otherwise acquire any of the Membership Interests or to make any investment (in the form of a

loan, capital contribution, or otherwise) in any Person, The Company does not own or control any equity security or other interest of any other Person, The Company is not a party to any agreement (i) requiring it to acquire any securities or ownership interests in any Person; and/or (ii) requiring it to make any investment in and/or to fund in any manner any Person. Since its inception, the Company has not consolidated or merged with, acquired all or substantially all of the assets of, or acquired the stock of or any interest in any Person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Upon consummation ofthe transactions contemplated hereby at the Closing, Buyer will own the Membership Interests free and clear of all Liens, Equity Rights, Preemptive Rights, and/or Restrictions, except any made by Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.3** **<u>Authorization of Agreement.</u>** The Company has all requisite limited liability company power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. This Agreement and all other agreements and instruments to be executed by the Company in connection herewith (as defined in Section I) have been duly and validly approved by the Managers and the members of the Company (the **"Authorizing Parties")** and no other proceedings on the part of the Company or Sellers is necessary to approve this Agreement and to consummate the transactions contemplated hereby or thereby. This Agreement and the other Transaction Documents to be delivered by the Company have been (or upon execution will have been) duly executed and delivered by the Company, have been effectively authorized by all necessary action, corporate or otherwise, and assuming the assuming the due authorization, execution and delivery of each such Transaction Document by each of the other parties thereto, constitute (or upon execution will constitute) legal, valid, and binding obligations of the Company, enforceable in accordance with their respective terms, except as such enforceability may be limited by general principles of equity and bankruptcy, insolvency, and other similar laws relating to creditors' rights (the **"Bankruptcy Exceptiou"),**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.4** **<u>Title to Assets.</u>** The Company is the lawful owner of each ofthe tangible assets, whether real, personal, mixed, comprising and employed in the operation of or associated with the Business, other than those Assets which the Company leases, in which case the Company has a valid leasehold interest in such Assets. The Assets owned and/or leased by the Company (collectively the **"Assets")** include all of the properties and other assets necessary for the Company to conduct the Business in the manner presently conducted and as currently contemplated to be conducted. The Assets are free and clear of all liens, mortgages, pledges, security interests, restrictions, prior assigmnents, encumbrances, and claims of any kind, except for Permitted Liens. There are no outstanding agreements, options, or commitments of any nature obligating the Company to transfer any of the Assets or rights or interests therein to any party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.5** **<u>Financial Condition and Accounting.</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>**Financial Statements.**</u> The Buyer is in possession of the balance sheet of the Company, as of December 31, 2024, and the related statements of income and cash flows for two years ended December 31, 2024 and 2023 and the same financial statements for the interim period ended March 31, 2025 (collectively, the **"Financial Statements"),** The Financial Statements present fairly the financial condition and position and operating results of the Company as ofthe respective dates thereof and for the periods therein indicated.

The Financial Statements reflect the consistent application of accounting principles throughout the periods incurred. The Financial Statements (i) were prepared in accordance with the books and records of the Company; and (ii) were prepared in accordance with generally accepted accounting principles **("GAAP")** consistently applied. The books and records of the Company are being maintained in accordance with applicable legal and accounting requirements in all material respects and as necessary to permit the preparation of financial statements in accordance with GAAP and to maintain asset

accountability. To Sellers' Knowledge, the Financial Statements do not omit any material liabilities, contingent or otherwise, not reflected or reserved against therein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>**Absence of Certain Changes.**</u> Since March 31, 2025, there has not been (i) any material change in the assets, liabilities, financial condition, or operations of the Company, other than changes in the ordinary course of business; (ii) any declaration, setting aside, or payment of any dividend or distribution in respect of the Membership Interests; (iii) any sale, lease, or disposition of any material Asset outside the ordinary course of business; (iv) any material reduction in workforce or termination of key employees; or (v) any event, circumstance, condition, development, or occurrence causing, resulting in, having, or that would reasonably be expected to have, a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.6** **<u>Property.</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>**Real Property.**</u> The Company owns all of the real property (the **"Owned Real** **Property")**or leases and has a good and valid and enforceable leasehold interest in all the real property (the **"Leased Real Property")** described in Schedule 3.6, in each case free and clear of all liens, except for Permitted Liens and as stated in Schedule 3.6, and Schedule 3.6 sets forth the address of each parcel of Owned Real Property and Leased Real Property.

Seller has made available to Buyers a true, accurate, and complete list of all leases, subleases, licenses, easements, rights of way, waivers of mineral owners, mineral deeds, and all (i) waivers of either surface or subsurface interests or both, (ii) pipeline easements and rights-of-way, and (iii) access agreements, and all similar material agreements used by the Company in the conduct of the Business (collectively, the **"Real Property Agreements").**

With respect to the Real Property Agreements: (i) each Real Property Agreement is in full force and effect according to its terms; (ii) the Company is not in material default or breach and, to the Knowledge of Seller, no other party thereto is in material default or breach under any Real Property Agreement; (iii) there are no material claims affecting any such Real Property Agreement, and, to the Knowledge of Seller, no party has given written notice to the Company of such party's intent to terminate any Real Property Agreement; (iv) to the Knowledge of Seller, no event has occurred which, with or without the giving of notice or lapse of time, is reasonably likely to result in a violation or breach of, or give any Person the right to exercise any remedy under, or cancel, terminate, or modify, any Real Property Agreement; (v) except as provided in Schedule 3.6, no Real Property Agreement requires any Third-Party Approval in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby; (vi) as of the Closing Date, all rents, royalties, shut-in royalties, and other payments then due and payable by the Company under any Real Property Agreement have been paid in full through the Closing Date or reflected in Schedule 3.6; and (vii) the Company has made available to Buyers true and correct copies of all of the Real Property Agreements.

The Company's interest in the Real Property Agreements and, to the Company's Knowledge, the real property interests which are the subject thereof, are free and clear of all liens except as stated in Schedule 3.6, created or existing pursuant to the Real Property Agreements.

Since January I, 2020, the Company has not received any written notice that there has been any material violation of any building, zoning, or other Law in respect of such buildings, structures, and other improvements with respect to the Real Property. There are no pending, or, to Seller's Knowledge, threatened, condemnation proceedings with respect to the Real Property. To Sellers' Knowledge, there are no environmental hazards, contaminants, or violations of environmental laws affecting the Owned Real Property or Leased Real Property that would materially impair the Business.

The Owned Real Property, the Leased Real Property, and any property otherwise subject to a Real Property Agreement, in each case, identified in Schedule 3.6, comprise all of the real property interests (whether leased, owned, or permitted pursuant to a Real Property Agreement) of the Company used in or intended to be used in, or otherwise related to the conduct of the Business as of the Closing.

To Sellers' Knowledge, all buildings, structures, improvements, fixtures, building systems and equipment, and all components thereof included in the Leased Real Property and the Owned Real Property are in good condition and repair in all material respects, free of any structural deficiencies or latent defects, and sufficient for the operation of the Business as it is conducted of the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>**Personal Property.**</u> **"Personal Property"** means all tangible personal property owned or leased by the Company, including equipment, vehicles, furniture, and fixtures used in the Business. All of the Personal Property has been maintained in accordance with the past practice of the Company and generally accepted industry practice and is in good operating condition and repair (normal wear and tear excepted) sufficient to enable the Company to operate the Business as presently conducted and as currently contemplated to be conducted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.7** **<u>Intellectual</u> <u>Property.</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Schedule 3.7 sets forth a true and complete list of all (a) patents and patent applications, trademark registrations and trademark applications, registered copyrights and copyright applications and domain names that are owned by the Company, and (b) licenses or sublicenses of Intellectual Property to the Company, and licenses and sublicenses oflntellectual Property by the Company to any third party (collectively **"Licensed Intellectual Property"). "Owned Intellectual Property"** means the Intellectual Property listed on Schedule 3.7 and all other Intellectual Property owned by the Company. For purposes hereof, **"Intellectual Property"** means: (i) United States, international, and foreign patents, patent applications and statutory invention registrations, (ii) patentable inventions, discoveries, improvements, ideas, know-how, formula, methodology, processes and technology, (iii) trademarks, service marks, trade names, trade dress, slogans, logos, domain names, and other source identifiers, including registrations and applications for registration thereof, (iv) original works of authorship, copyrightable subject matter, and copyrights, including copyright registrations and/or applications for copyright registration, (v) confidential and/or proprietary information, including trade secrets and/or know- how embodied in any invention, work of authorship, customer list, database, business information, and/or Software, and (vi) inventions, extensions, modifications, or enhancements of the Software or related to the Software. For purposes hereof, **"Software"** means all computer software developed by or on behalf of the Company, or used by the Company, including all computer software in any form (such as, source code, object code, assembler code, microcode, etc.), libraries, user-interfaces (including graphical user-interfaces, application programming interfaces (APis), and other software interfaces), and databases operated by the Company or used by the Company in any way, including use in internal Company operations, testing (including alpha and beta tests), licensing, marketing, sales, and/or in connection with processing customer orders, storing customer information, or storing and archiving data.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) To Sellers' Knowledge, the use of the Owned Intellectual Property and the Licensed Intellectual Property by the Company in the ordinary course of business as currently conducted and as currently contemplated to be conducted does not conflict with or infringe upon, violate or misappropriate the Intellectual Property rights of any third party. Since January 31, 2020, no claim has been asserted in writing that the use of such Intellectual Property in the ordinary course ofbusiness does or may conflict with or infringe upon, violate or misappropriate the Intellectual Property rights of any third party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Except with respect to Open Source Materials (as defined in clause (d) below) disclosed in Schedule 3.7, the Company is the exclusive owner of the entire and unencumbered right, title

and interest in each item of Owned Intellectual Property in the United States, and to Sellers' Knowledge the Company is entitled to use all such Owned Intellectual Property in the ordinary course of business in the United States and worldwide, subject only to the terms ofthe licenses of the Owned Intellectual Property granted by the Company to its customers in the ordinary course of business. The Company has the right to use each item of Licensed Intellectual Property as provided in the license agreements therefor, and to Sellers' Knowledge the Company is entitled to use all such Licensed Intellectual Property in the ordinary course of business as currently conducted and as currently contemplated to be conducted, subject only to the terms of the licenses of the Licensed Intellectual Property granted by the licensors thereof. True and complete copies of all agreements and documents with respect to the Licensed Intellectual Property and the Owned Intellectual Property have been made available to Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) **"Open Source Materials"** means materials (i) subject to any license that requires as a condition of use, modification and/or distribution thereof, that such materials, or materials combined and/or distributed with such materials be (A) disclosed or distributed in source code or similar form, (B) licensed for the purpose of making derivative works, or (C) redistributable at no charge or (ii) subject to any license or right that the Open Source Initiative has recognized or approved as an open source license. Except as disclosed in Schedule 3.7, the Company has not (a) incorporated Open Source Materials into, or combined Open Source Materials with, the Company's products or any Intellectual Property owned or used by the Company, (b) distributed Open Source Materials in conjunction with the Company's products or any Intellectual Property owned or used by the Company, or (c) used Open Source Materials in a manner that would make the Company's products or any Intellectual Property owned or used by the Company, or any part thereof, Open Source Materials.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The Owned Intellectual Property and the Licensed Intellectual Property include all of the Intellectual Property and Software used in the Business and the ordinary day-to-day operations ofthe Company, and there are no other items oflntellectual Property or Software that are material to tbe Business and/or such ordinary day-to-day operations. The Owned Intellectual Property and, to Seller's Knowledge, any Intellectual Property licensed to the Company under the Licensed Intellectual Property, is (i) to Seller's Knowledge, subsisting, valid and enforceable, and (ii) has not been adjudged invalid or unenforceable in whole or part.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Since January I, 2020, no legal proceedings have been asserted in writing, are pending, or, to Sellers' Knowledge, threatened against the Company (i) based upon or challenging or seeking to deny or restrict the use by the Company of any ofthe Owned Intellectual Property or Licensed Intellectual Property, (ii) alleging that any services provided by, processes used by, or products manufactured or sold by the Company infringe upon or misappropriate any Intellectual Property right of any third party, or (iii) alleging that any Intellectual Property licensed under the Licensed Intellectual Property infringes upon any Intellectual Property right of any third party or is being licensed or sublicensed in conflict with the terms of any license or other agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) To Sellers' Knowledge, no person is engaging in any activity tbat infringes upon the Owned Intellectual Property or any Intellectual Property licensed to the Company under the Licensed Intellectual Property. Except as set forth in Schedule 3.7, the Company has not granted any license or other right to any third party with respect to the Owned Intellectual Property or Licensed Intellectual Property. The consummation of the transactions contemplated by this Agreement will not result in the termination, cancellation and/or impairment of any of the Owned Intellectual Property and/or the Licensed Intellectual Property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Correct and complete copies of all the licenses and sublicenses of the Licensed Intellectual Property to which the Company is a party have been made available to Buyer. With respect to each such license and sublicense: (i) such license and sublicense is valid and binding and in full force and

effect and represents the entire agreement between the respective licensor and licensee with respect to the subject matter of such license or sublicense; (ii) such license or sublicense will not cease to be valid and binding and in full force and effect on terms identical to those currently in effect as a result of the consummation of the transactions contemplated by this Agreement, nor will the consummation of the transactions contemplated by this Agreement constitute a breach or default under such license or sublicense or otherwise give the licensor or sublicensor a right to terminate such license or sublicense; (iii) since January I, 2020, the Company has not (x) received any notice of termination or cancellation under such license or sublicense; (y) received any notice of a breach or default under such license or sublicense, which breach has not been cured, nor (z) granted to any other third party any rights, adverse or otherwise, under such license or sub license that would constitute a breach of such license or sublicense; and (iv) neither the Company, nor, to Sellers' Knowledge, any other party to such license or sublicense is in breach or default in any material respect, and, to the Sellers' Knowledge, since January I, 2020, no event has occurred that, with notice or lapse of time would constitute such a breach or default or permit termination, modification or acceleration under such license or sublicense.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) To Sellers' Knowledge, the Software is free of all viruses, worms, Trojan horses and other material !mown contaminants, and does not contain any problems of a material nature or have an adverse impact on the operation of other software programs or operating systems, and no rights in the Software have been transferred to any third party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;G) The Company has talrnn reasonable steps in accordance with normal industry practice to maintain the confidentiality of its customer lists and customer information, trade secrets, source code and other confidential Intellectual Property. To Sellers' Knowledge since January I, 2020, (i) there has been no misappropriation of any material trade secrets or other material confidential Intellectual Property of the Company by any Person, (ii) no employee, independent contractor or agent ofthe Company has misappropriated any trade secrets ofany other Person in the course ofsuch performance as an employee, independent contractor or agent and (iii) no employee, independent contractor or agent of the Company is in default or breach of any term of any employment agreement, non-disclosure agreement, assignment of invention agreement or similar agreement or contract relating in any way to the protection, ownership, development, use or transfer oflntellectual Property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) No current and former employee, director, and/or officer of the Company has any rights whatsoever to any of the Owned Intellectual Property and/or the Licensed Intellectual Property. Neither the Sellers nor the Company believes it is or will be necessary to utilize any inventions, trade secrets or proprietary information of any of its employees made prior to their employment by the Company, except for inventions, trade secrets or proprietary information that have been assigned to the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.8** **<u>No Conflict or Violation.</u>** The execution, delivery, and performance by Sellers and the Company of this Agreement and the other Transaction Documents to be delivered by Sellers and/or the Company and the consummation of the transactions contemplated hereby and thereby do not and will not (with or without notice or passage of time): (i) violate or conflict with any provision of the Charter Documents; (ii) violate any provision or requirement of any domestic or foreign, federal, state, or local law, statute, judgment, order, writ, injunction, decree, award, rule, or regulation of any Governmental Entity applicable to the Company and/or the Business; (iii) violate, result in a breach of, constitute (with due notice or lapse of time or both) a default or cause any obligation, penalty, premium, or right oftermination to arise or accrue under any Intellectual Property licenses or agreements and/or any Contract (as hereinafter defined in Section 3.9); (iv) result in the creation or imposition of any Lien of any kind whatsoever upon any ofthe Membership Interests and/or Assets of the Company or the Business; or (v) result in the cancellation, modification, revocation, or suspension of any material license, permit, certificate, franchise, authorization, or approval issued or granted by any Governmental Entity (each a **"License,"** and collectively, the

**"Licenses"),** except, in the case of clauses (ii) through (v) of this <u>Section 3.8,</u> for any such conflicts, defaults or violations that would not reasonably be expected to be individually or in the aggregate, materially adverse to the Company and its Subsidiaries, taken *as* a whole.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.9** **<u>Consents.</u>** Schedule 3.9 lists all consents and notices required to be obtained or given by or on behalf of Sellers and/or the Company in connection with the consummation of the transactions contemplated by this Agreement and the Transaction Documents in compliance with all Applicable Laws, rules, regulations, or orders of any Governmental Entity, the provisions ofany material Contract and/or any Intellectual Property license or agreement, except where the failure to obtain such consent will not have a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.10** **<u>Labor and Employment Matters.</u>** There are no employment agreements, collective bargaining agreements, or other labor agreements to which the Company is a party or by which it is bound. The Company has complied in all material respects with all applicable federal, state, and local laws, rules, and regulations relating to employment, including wage and hour laws, discrimination, occupational safety (e.g., OSHA), and workers' compensation. Schedule 3.10 lists all employee benefit plans (e.g., pension, 401(k), health, or welfare plans) sponsored or maintained by the Company, and such plans are in compliance with Applicable Laws, including ERISA, and have no underfunding or termination liabilities. There are no pending or, to Sellers' Knowledge, threatened labor disputes, strikes, or unionization efforts involving the Company's employees.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.11** **<u>Litigation.</u>** Except as set forth on Schedule 3.11, there are no claims, actions, suits, or proceedings of any nature **("Actions")** pending or, to Sellers' Knowledge, threatened by or against the Company, the managers, or members of the Company, or any of their respective Affiliates, including without limitation those involving, affecting, or relating to (i) the Business, any Assets, properties, prospects, and/or operations ofthe Company, (ii) any Contracts, (iii) any Owned Intellectual Property, (iv) any Licensed Intellectual Property, and/or (v) the transactions contemplated by this Agreement (collectively **"Claims").** For purposes of this Agreement, **"Affiliate"** is as defined in Section I. The Company is not a party or subject to the provisions of any order, writ, injunction, judgment, or decree of any court or Governmental Entity. To Sellers' Knowledge, no Governmental Entity is currently investigating or planning to investigate the Company. There is no action, suit, proceeding, or investigation by the Company currently pending against any third party or which the Company intends to initiate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.12** **<u>Certain Agreements.</u>** (a) True and complete copies of all Contracts have been made available to Buyer, or will be made available to Buyer within 14 days of Closing. There are no renegotiations of, attempts to renegotiate, or outstanding rights to renegotiate any material amounts payable by or to the Company tmder any Contract and to Sellers' Knowledge and the Company, no oral or written

demand for such renegotiation has been made. (b) Each Contract is valid, binding, and enforceable against the Company in accordance with its terms, except *as* such enforceability may be limited by the Bankruptcy Exception, and is in full force and effect on the date hereof. Upon consummation of the transactions contemplated by this Agreement, each Contract shall continue to be valid, binding, enforceable, and in full

force and effect without penalty or other adverse consequence. Since January I, 2020, the Company has performed all material obligations required to be performed by it under, and is not in material default or breach of, any Contract, and no event has occurred which, with due notice or lapse of time or both, would constitute such a material default or breach by the Company. (c) To Sellers' Knowledge, no other party to any Contract is in default or breach in respect thereof, and no event has occurred which, with due notice or lapse of time or both, would constitute such a default or breach.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.13** **<u>Compliance with Applicable Law; Permits.</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Since January I, 2020, the Company has complied with all laws, rules, statutes, ordinances, regulations, and requirements of all Govermnental Entities **("Applicable Laws")** in all material respects. The Company is not in violation of any Applicable Law that would result in a Material Adverse Effect. The Business and the operations of the Company are being conducted in all material respects in accordance with all Applicable Laws of all Governmental Entities having jurisdiction over the Company or its Assets, properties, or operations, including, without limitation, all such Applicable Laws, orders, and requirements relating to the Business except in any case where the failure to so conduct its operations would not have a Material Adverse Effect. Since January I, 2020, the Company has not received any written notice of any violation of any Applicable Law, order, or other legal requirement. The Company is not in default with respect to any order, writ, judgment, award, injunction, or decree of any Governmental Entity, applicable to the Company, the Business, and/or any of its Assets, properties, or operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Company holds all licenses, permits, easements, variances, exemptions, consents, certificates, orders, approvals, franchises, and other authorizations (collectively, the **"Operating** **Permits")** and has taken all actions required by Applicable Law or regulations of any Governmental Entity in connection with the Business as now conducted, except where the failure to obtain any such Operating Permits or to take any such action, individually or in the aggregate, does not and would not reasonably be expected to have a Material Adverse Effect. Since January I, 2020, no Governmental Entity has issued any notification in writing stating that the Company is not in compliance with any Operating Permit. Schedule 3.l(b) lists all material Operating Permits held by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.14** **<u>Licenses.</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Schedule 3.14 lists all Licenses issued or granted to the Company. The Licenses constitute all Licenses required, and consents, approvals, authorizations, and other requirements prescribed, by any law, rule, or regulation which must be obtained or satisfied by the Company, in connection with the Business or that are necessary for the execution, delivery, and performance by the Company of this Agreement and the other Transaction Documents. The Licenses are sufficient and adequate in all material respects to permit the continued lawful conduct of the Business in the marmer now conducted and as currently contemplated to be conducted and the ownership, occupancy, and operation of the Company's properties and the execution, delivery, and performance of this Agreement. No jurisdiction in which the Company is not qualified or licensed as a foreign business entity has demanded or requested in writing that it qualify or become licensed as a foreign business entity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Each License has been issued to, and duly obtained and fully paid for and is valid, in full force and effect, enforceable in accordance with its terms subject to the Bankruptcy Exception, and not subject to any pending or known threatened administrative or judicial proceeding to suspend, revoke, cancel, or declare such License invalid in any respect. The Company is not in violation in any material respect of any of the Licenses. The Licenses have never been suspended, revoked, or otherwise terminated, subject to any fine or penalty, or subject to judicial or administrative review, for any reason other than the renewal or expiration thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.15** **<u>Intercompany and Affiliate Transactions; Insider Interests.</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Other than agreements disclosed on Schedule 3.15, there are no contracts, transactions, agreements, or arrangements, written or oral, of any kind, direct or indirect, between the Company and (a) any of the Sellers, (b) any manager, member, or officer of the Company, and/or (c) any Affiliate and/or any immediate family member of any of the foregoing persons. All of the foregoing contracts, transactions, agreements, and arrangements are referred to as the **"Related Party Agreements."** The Related Party Agreements include, without limitation, loans, guarantees, and/or pledges to, by, or for the Company as well as those from, to, by, or for any of the foregoing persons, which are currently in effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) (i) none of the Sellers, (ii) no manager, member, or officer of the Company, and

&nbsp;&nbsp;&nbsp;&nbsp;(iii) no Affiliate and/or any immediate family member of any of the foregoing persons, now has, or within the last three (3) years had, either directly or indirectly:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) an equity or debt interest in any corporation, partnership, joint venture, association, organization, or other Person or entity which furnishes, sells supplies, or during such period furnished, sold, or supplied, services or products to the Company, or purchased, or during such period purchased from the Company, any goods or services, or otherwise does, or during such period did, business with the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) a beneficial interest in any Contract, commitment, or agreement to which the Company is or was a party or under which it was obligated or bound or to which its properties may be or may have been subject;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) any rights **in** or to any of the Intellectual Property, Assets, properties, and/or rights owned or licensed by the Company and/or used by the Company in the Business, including, but not limited to, any rights as a secured party, lender, and/or debt holder;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D) the right to receive any payments o f any kind from the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.16** **<u>Insurance.</u>** Schedule 3.16 lists all insurance policies maintained by the Company, which are in full force and effect, provide adequate coverage for the Business, and have no pending claims or notices o f cancellation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.17** **<u>No Undisclosed Liabilities.</u>** Except as and to the extent (a) specifically reflected or reserved against in the most recent Financial Statements, (b) as incurred in the ordinary course of business since the date of the most recent Financial Statements, (c) arising under those contracts and agreements to which the Company is party as described in Schedule 3.12 (none o f which results from, arises out of, relates to, is in the nature of, or was caused by any breach o f contract, breach of warranty, tort, infringement, or violation oflaw), (d) incurred in connection with or arising out of the Transactions and (e) those which are not, individually or in the aggregate, material in amount, the Company has no material debt, liabilities, or obligations o f any nature, whether absolute, accrued, contingent, or otherwise, and whether due or to become due (including, without limitation, any liability for taxes and interest, penalties, and other charges payable with respect to any such liability or obligation).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.18** **<u>Taxes.</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) For purposes of this Agreement, the following terms shall have the meanings specified below: (i) **"Tax" or "Taxes"** means all taxes, including, without limitation, all net income, gross receipts, sales, use, withholding, payroll, employment, social security, unemployment, excise, utility, property, and all other taxes applicable to the Company, plus applicable penalties and interest thereon. (ii) **"Tax Liabilities"** means all liabilities for Taxes. (iii) **"Tax Return"** shall mean all reports and returns required to be filed with respect to Taxes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Company was formed in June 2014 and has filed all Tax Returns. All Tax Returns filed by the Company are true, correct, and complete in all material respects, and all Taxes due and payable by the Company have been timely paid. The Company is not currently the subject of any audit, examination, or other proceeding with respect to Taxes, and no such proceeding is threatened to Sellers' Knowledge.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>**Tax Sharing Agreements.**</u> The Company is not a party to any tax-sharing or tax- indemnity agreement and the Company has not otherwise assumed by contract or otherwise the Tax Liability of any other person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>**No Liens.**</u> None of the Assets of the Company are subject to any liens in respect of Taxes (other than for current Taxes not yet due and payable).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.19** **<u>Environmental</u> <u>Matters.</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company complies in all material respects with all Applicable Laws, regulations, and other requirements of Governmental Entities or duties under common law relating to toxic or hazardous substances, wastes, pollution, or to the protection of health, safety, or the environment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) There are no pending or, to Sellers' Knowledge, threatened administrative, judicial, or regulatory proceedings, or, to Sellers' Knowledge, any threatened actions or claims, or any consent decrees or other agreements in effect that relate to environmental conditions in, on, under, about, or related to the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.20** **<u>Brokers or Finders.</u>** No agent, broker, finder, investment banker, financial advisor, or other person is entitled to any brokerage, finder's, or other fee or commission in connection with any of the transactions contemplated by this Agreement, based upon arrangements made by or on behalf ofthe Sellers **("Sellers' Broker Fees").** The Sellers shall be solely responsible for the payment of any and all Sellers' Broker Fees due any agent, broker, finder, investment banker, financial advisor, or other person in connection with the transactions contemplated by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.21** **<u>Minute Books.</u>** The minute books of the Company made available to Buyer contain complete and accurate copies of all meetings of managers and members since the time of organization of the Company. All prior material corporate and company actions on behalf of the Company have been properly authorized and ratified by the officers, managers, and/or members of the Company in accordance with Applicable Laws and the Charter Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.22** **<u>No Other Representations.</u>** Except for the representations and warranties contained in this <u>ARTICLE 3</u> and the Transaction Documents, neither the Company nor the Sellers makes any representation or warranty, express or implied, regarding the Company, its Subsidiaries or the Membership Interests.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.23** **<u>Ownership of Membership Interests; Authorization of Agreement.</u>** Each Seller, severally and not jointly, makes the following representations and warranties to Buyer:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Such Seller owns the Membership Interests set forth opposite his, her, or its name in the respective amounts set forth on Schedule 1, free and clear of all Liens.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Such Seller has full legal right, power, and authority to enter into this Agreement and to sell and deliver the Membership Interests owned by him, her, or it in the manner provided herein. Such Seller has duly and validly executed this Agreement and has duly and validly executed and delivered all other agreements contemplated hereby, and each of this Agreement and such other agreements., assuming the assuming the due authorization, execution and delivery of each such Transaction Document by each of the other parties thereto, constitutes a valid, binding, and enforceable obligation of such Seller in accordance with its terms.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The execution, delivery, and performance of this Agreement and the other agreements contemplated hereby by such Seller, and the consummation of the transactions contemplated hereby or thereby, will not require, on the part of such Seller, any consent, approval, authorization, or other order of, or any filing with, any Govermnental Entity, or under any contract, agreement, or commitment to which such Seller is a party or by which such Seller or its property is bound, and will not constitute a violation on the part of such Seller of any law, administrative regulation, or ruling or court decree, or any contract, agreement, or commitment, applicable to such Seller or its property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) With respect to Sellers that are not natural persons, this Agreement and all other agreements and instruments to be executed by such Seller in connection herewith have been duly and validly approved by the board of directors or other governing body of such Seller and no other proceedings on the part ofsuch Seller is necessary to approve this Agreement and to consummate the transactions contemplated hereby or thereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Securities Law Compliance. Such Seller is an accredited investor as defined in Rule S0l(a) of Regulation D under the Securities Act of 1933, as amended (the **"Securities Act"),** or has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks ofreceiving Buyer's common stock as the Purchase Price. Such Seller understands that the shares of Buyer's common stock are restricted securities under the Securities Act and may not be resold absent registration or an exemption. Such Seller is acquiring the shares for investment purposes and not with a view to distribution.

**ARTICLE 4** 

**REPRESENTATIONS AND WARRANTIES OF BUYER.**

References in this Article 4 to Buyer's **"Knowledge"** are as defined in Section I. Buyer represents and warrants to the Sellers that as of the date hereof:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.1** **<u>Organization and Corporate Authority.</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Buyer is a corporation duly organized, validly existing, and in good standing under the laws ofthe State of Nevada, with full corporate power and authority to carry on its business as it is now and has since its organization been conducted, and to own, lease, or operate its assets and properties. Buyer is duly qualified to do business and is in good standing in every jurisdiction in which the character of the properties owned or leased by it or the nature of the business conducted by it makes such qualification necessary, except where failure to be so qualified would not have a Material Adverse Effect with respect to Buyer and its operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Buyer has all requisite corporate power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. This A<sub>g r</sub>eement and all other Transaction Documents have been duly executed and delivered by Buyer, have been effectively authorized by all necessary action, corporate or otherwise, and constitute (or upon execution will constitute) legal, valid, and binding obligations of Buyer, enforceable in accordance with their respective terms, except as such enforceability may be limited by the Bankruptcy Exception.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.2** **<u>OTC Filings.</u>** As of their respective dates, Buyer's filings with the OTC Markets (the **"OTC Documents")** were timely filed and complied in all material respects with the requirements applicable to Buyer's OTC Documents. Buyer's OTC Documents constitute all of the documents and reports that Buyer was required to file with OTC Markets. As of the time filed with the OTC Markets (or, if amended or superseded by a filing prior to the date of this Agreement, then on the date of such filing) none of Buyer's OTC Documents contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.3** **<u>No Conflict or Violation.</u>** The execution, delivery, and performance by Buyer of this Agreement and the other Transaction Documents to be executed and delivered by Buyer and the consummation of the transactions contemplated hereby and thereby, do not and will not: (i) violate or conflict with any provision of the organizational documents of Buyer; or (ii) to Buyer's Knowledge, violate in any material respect any provision or requirement of any domestic or foreign, national, state, or local law, statute,judgment, order, writ, injunction, decree, award, rule, or regulation ofany Governmental Entity applicable to Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.4** **<u>Litigation.</u>** There are no material claims, actions, suits, or proceedings of any nature pending or, to the Knowledge of Buyer, threatened by or against Buyer, the officers, directors, employees, agents of Buyer, or any of their respective Affiliates involving, affecting, or relating to any assets, properties, or operations of Buyer or any of its Affiliates or the transactions contemplated by this Agreement. Buyer is not subject to any order, writ, judgment, award, injunction, or decree of any Governmental Entity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.5** **<u>Consents.</u>** There are no consents or notices required to be obtained or given by or on behalf of Buyer before consummation of the transactions contemplated by this Agreement and Buyer is in compliance with all Applicable Laws, rules, regulations, or orders of any Governmental Entity, or the provisions of any material contract of which Buyer is a party to, and all such consents have been duly obtained and are in full force and effect, except where the failure to obtain such consent will not have a material effect on the operation of Buyer's business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.6** **<u>Compliance with Applicable Law.</u>** The operations of Buyer are, and have been, conducted in all material respects in accordance with all Applicable Laws, regulations, orders, and other requirements of all Governmental Entities having jurisdiction over Buyer or its assets, properties, or operations, including, without limitation, all such laws, regulations, orders, and requirements relating to Buyer's business except in any case where the failure to so conduct its operations would not have a material effect on the operation of Buyer's business. Buyer has not received any notice of any violation of any such law, regulation, order, or other legal requirement, and is not in default with respect to any order, writ, judgment, award, injunction, or decree ofany Governmental Entity, applicable to Buyer or any of its assets, properties, or operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.7** **<u>Brokers or Finders.</u>** No agent, broker, finder, investment banker, financial advisor, or other person is entitled to any brokerage, finder's, or other fee or commission in connection with any of the transactions contemplated by this Agreement, based upon arrangements made by or on behalf of Buyer **("Buyer's Broker Fees").** Buyer shall be solely responsible for the payment of any and all Buyer's Broker Fees due any agent, broker, finder, investment banker, financial advisor, or other person in connection with the transactions contemplated by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.8** **<u>Securities Law Compliance.</u>** The issuance of the shares of Buyer's common stock as the Purchase Price has been duly authorized and, upon issuance in accordance with this Agreement, will be validly issued, fully paid, and non-assessable, and will comply with all applicable securities laws, including any applicable exemptions under the Securities Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.9** **<u>Investment Intent.</u>** Buyer is acquiring the Membership Interests solely for its own account for investment purposes and not with a view to, or for offer or sale in connection with, any distribution thereof. Buyer is an "accredited investor" as defined in Regulation D promulgated by the Securities and Exchange Commission under the Securities Act of 1933, as amended. Buyer acknowledges that the

Membership Interests are not registered under the Securities Act of 1933, as amended, or any state securities laws, and that the Membership Interests may not be transferred or sold except pursuant to the registration provisions ofthe Securities Act of 1933, as amended or pursuant to an applicable exemption therefrom and subject to state securities laws and regulations, as applicable. Buyer is able to bear the economic risk of holding the Membership Interests for an indefinite period (including total loss of its investment), and has (either alone or together with its advisors) sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risk of its investment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.10** **<u>Solvency.</u>** After giving effect to the transactions contemplated by this Agreement, Buyer

&nbsp;&nbsp;&nbsp;&nbsp;(a) will be solvent (in that both the fair value of its assets will not be less than the sum of its liabilities and that the present saleable value of its assets will not be less than the amount required to pay its probable liabilities as they become absolute and matured), and (b) will have adequate capital with which to engage in its business. No transfer of property is being made and no obligation is being incurred **in** connection with the transactions contemplated by this Agreement with the intent to hinder, delay or defraud either present or future creditors of the Company, its Subsidiaries or Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.11** **<u>No Other Representations.</u>** Except for the representations and warranties contained in this ARTICLE 4 and the Transaction Documents, the Buyer makes any representation or warranty, express or implied, regarding the Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.12** **<u>Non-Reliance.</u>** Buyer acknowledges and agrees that it is not relying nor has it relied on any express or implied representations or warranties, whether in writing, orally or otherwise, made by or on behalf of or imputed to any the Sellers, the Company, its Subsidiaries, the Sellers' Representative, nor any other Person, except for those expressly made by the Sellers and the Company in ARTICLE 3 (as modified by the Disclosure Schedules) each of which is made solely by the Party specified therein and subject to the other terms and conditions of this Agreement, and that only those representations and warranties in ARTICLE 3 shall have any legal effect. Without limiting the foregoing, buyer further acknowledges and agrees that it is not relying nor has it relied on any projections, forecasts, estimates, plans or budgets of future revenues, expenses or expenditures, future results of operations (or any component thereof), future cash flows (or any component thereof) or future financial condition (or any component thereof) of the Company or its Subsidiaries heretofore or hereafter delivered to or made available to Buyer or any of its agents, representatives, lenders or affiliates or any other Person and neither the Company, its Subsidiaries, any Seller, the Sellers' Representative nor any other Person will have or be subject to any liability or indemnification obligations to Buyer or any of its agents, representatives, lenders or affiliates or any other Person, and none of Buyer or any of its agents, representatives, lenders or affiliates or any other Person shall have any claim against the Company, its Subsidiaries, any Seller, the Sellers' Representative nor any other Person, resulting from such delivery or availability or any subsequent use or otherwise in connection therewith.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.13** **<u>Valid Issne of Equity Consideration.</u>** The Equity Consideration, when issued and delivered in accordance with the terms set forth in this Agreement, will be duly authorized, validly issued, fully paid and nonassessable. The Equity Consideration will be issued in compliance with all applicable

U.S. federal and state securities Laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.14** **<u>Buyer Acknowledgment and Covenant Regarding Tenant Improvements.</u>** Buyer acknowledges that it has had the opportunity to discuss, to its satisfaction, the scope and status of all tenant improvements related to the Block 40 project with Seller's Representative. Buyer further represents that it is aware of all contractually obligated tenant improvement work required under the Leases or other agreements relating to the Project, including with respect to JBL, Wapas, Ten Ten Restaurant, and Naahma Sushi, and covenants to perform and complete, or cause to be performed and completed, all such tenant improvements in accordance with the terms of such agreements following the Closing.

**ARTICLE 5**

**COVENANTS AND CERTAIN UNDERSTANDINGS** 

**AND AGREEMENTS OF THE PARTIES.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.1** **<u>Confidentiality.</u>** After the Closing, Sellers will keep the matters contemplated herein, all information about the Company or the Business, and all information provided by Buyer related to Buyer, confidential, and will not provide information about such matters to any party or use such information except to the extent necessary to effect the transactions contemplated hereby. Buyer will keep the matters contemplated herein and all information provided by Sellers related to the Sellers confidential, and will not provide information about such matters to any party or use such information except to the extent necessary to effect the transactions contemplated hereby or as required by Applicable Law. Buyer and the Sellers shall each cause their respective Affiliates, officers, directors, employees, agents, and advisors to keep confidential all information received in connection with the transactions contemplated hereby. The confidentiality restrictions set forth herein shall not apply to information that (i) was in the public domain before the date of this Agreement or subsequently came into the public domain other than as a result of disclosure by the party to whom the information was delivered; (ii) was lawfully received by a party from a third party free of any obligation of confidence of or to such third party; or (iii) is required to be disclosed in a judicial or administrative proceeding after giving the other party as much advance notice of the possibility of such disclosure as practicable so that the other party may attempt to limit such disclosure.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.2** **<u>Further Assurances.</u>** Upon the reasonable request of a party or parties hereto at any time after the Closing Date, the other party or parties shall forthwith execute and deliver such further instruments of assignment, transfer, conveyance, endorsement, direction, or authorization and other documents as the requesting party or parties or its or their counsel may reasonably request in order to effectuate the purposes of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.3** **<u>Management; Board Seat; Employment Agreement.</u>** At Closing, Buyer shall, a) appoint a Manager or Managers of the Company, as identified in Schedule 5.3, and shall cause Block 40, LLC to enter into employment agreements with Charles R. Abele, Jr. and Peter Jago, on terms mutually agreed by Buyer and such individuals, including a minimum term of three years, base salary, and customary benefits, with due consideration of any benefits or payments either receives through the Management Agreement with GCF Development attached to this agreement; and b) execute and abide by the Management Agreement between Block 40, LLC and GCF Development attached hereto as Exhibit B; and

&nbsp;&nbsp;&nbsp;&nbsp;c) provide board level appointments for oversight of Charles R. Abele, Jr on behalf of Hollywood Circle Capital, LLC and Peter Jago on behalf of the Sellers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.4** **<u>No Shop.</u>** Until the Closing, neither Buyer nor the Sellers shall enter into or negotiate any similar contract or arrangement with any other Person, without the express written approval of the other parties hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.5** **<u>Termination of Company Operating Agreement.</u>** Immediately as of Closing, the Company and the Sellers hereby irrevocably agree that the operating agreement of the Company as of the date hereof, as it may have been amended from time to time (the **"Operating Agreement"),** is terminated and is null and void and ofno further force or effect, and that no party thereto shall have any duty, liability, or obligation thereunder, except for any confidentiality or indemnification obligations that expressly survive termination as set forth therein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.6** ![](image_003.gif)<u>**Operation ofBnsiness Pre-Closing.**</u> Between the date of this Agreement and the Closing, Sellers shall use commercially reasonable efforts to cause the Company to operate the Business in the ordinary course consistent with past practice in all material respects, preserve its assets and business relationships, and not take any actions that would result in a Material Adverse Effect, including, without

limitation, (i) selling or disposing of any material Assets, (ii) incurring material liabilities, (iii) amending the Charter Documents, or (iv) declaring or paying any dividends or distributions. Sellers shall promptly notify Buyer of any material damage, loss, or casualty affecting the Company's Assets or Business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.7** **<u>Tax</u> <u>Covenants.</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>**Pre-Closing Taxes.**</u> Sellers shall prepare and file, or cause to be prepared and filed, all Tax Returns for the Company for periods ending on or before the Closing Date, and shall pay all Taxes due for such periods. Such Tax Returns shall be prepared in a manner consistent with past practice and provided to Buyer for review at least 15 days prior to filing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>**Straddle Period Taxes.**</u> For any Tax period that includes but does not end on the Closing Date (a **"Straddle Period"),** Taxes shall be allocated between the pre-Closing and post-Closing portions based on an interim closing ofthe books as ofthe Closing Date, except for property and ad valorem taxes, which shall be prorated based on the number of d<sub>ay</sub> s in the period before and after the Closing Date. Sellers shall be responsible for the pre-Closing portion of such Taxes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>**Cooperation.**</u> Buyer and Sellers shall cooperate in the preparation and filing of Tax Returns, including providing access to records and assisting with any audits or inquiries related to Taxes for periods ending on or before the Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.8** **<u>Books and Records.</u>** At or promptly following the Closing, Sellers shall deliver or cause to be delivered to Buyer all books, records, and files of the Company, including financial, operational, and personnel records, whether in physical or electronic form. For three (3) years following the Closing, Buyer shall provide Sellers with reasonable access to such records for tax or legal purposes, subject to confidentiality obligations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.9** **<u>Notification</u>** <u>of **Certain Matters.**</u> Each Party shall give prompt notice to the other Parties if such Party or its Affiliates: (a) fails to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it or its Affiliates hereunder in any material respect; (b) receives any notice or other communication in writing from any third party (including any Governmental Entity) alleging

&nbsp;&nbsp;&nbsp;&nbsp;(i) that the consent of such third party is or may be required in connection with the transactions contemplated by this Agreement or (ii) any non-compliance with any Law by such Party or its Affiliates;

&nbsp;&nbsp;&nbsp;&nbsp;(c) receives any notice or other communication from any Governmental Entity in connection with the transactions contemplated by this Agreement; (d) discovers any fact or circumstance that, or becomes aware of the occurrence or non-occurrence of any event the occurrence or non-occurrence of which, would reasonably be expected to cause or result in any of the conditions to the Closing set forth in <u>Article VII</u> not being satisfied or the satisfaction of those conditions being materially delayed; or (e) becomes aware ofthe commencement or threat, in writing, of any Action against such Party or any of its Affiliates, or any oftheir respective properties or assets, or, to the Knowledge of such Party, any officer, director, partner, member or manager, in his, her or its capacity as such, of such Party or of its Affiliates with respect to the consummation of the transactions contemplated by this Agreement. No such notice shall constitute an acknowledgement or admission by the Party providing the notice regarding whether or not any of the conditions to the Closing have been satisfied or in determining whether or not any of the representations, warranties or covenants contained in this Agreement have been breached.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.10** **<u>Efforts.</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Subject to the tenns and conditions of this Agreement, each Party shall use its reasonable best efforts, and shall cooperate fully with the other Parties, to take, or cause to be taken, all actions and to do, or cause to be done, all things reasonably necessary, proper or advisable under applicable

Laws and regulations to consummate the transactions contemplated by this Agreement (including the receipt of all applicable consents of Govermnental Entities) and to comply as promptly as practicable with all requirements of Govermnental Entities applicable to the transactions contemplated by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Prior to the Closing, each Party shall use its commercially reasonable efforts to obtain any consents of Govermnental Entities or other third Persons as may be necessary for the consummation by such Party or its Affiliates ofthe transactions contemplated by this Agreement or required as a result of the execution or performance of, or consummation of the transactions contemplated by, this Agreement by such Party or its Affiliates, and the other Parties shall provide reasonable cooperation in connection with such efforts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.11** **<u>Listing Covenant and Right of Rescission.</u>** Buyer has represented to Sellers that it intends to cause its equity interests, including the shares of common stock constituting the Equity Consideration, to be listed on a nationally recognized stock exchange in the United States, specifically either The Nasdaq Stock Market LLC ("Nasdaq") or the New York Stock Exchange ("NYSE"), on or before June 30, 2026 (the "Outside Listing Date"). The Parties acknowledge and agree that such representation is a material inducement to Sellers' decision to enter into this Agreement and to accept the Equity Consideration in exchange for the Membership Interests. Accordingly, Buyer covenants and agrees that, in the event that its shares of common stock (including the Equity Consideration) are not listed and publicly traded on either the Nasdaq or the NYSE on or prior to the Outside Listing Date, the Seller's Representative shall have the right, exercisable in his sole and absolute discretion within sixty (60) days following the Outside Listing Date, to elect to rescind the Transaction. In such event, (a) Buyer shall return the Membership Interests to the Sellers, pro rata in accordance with their respective Pro Rata Portions, free and clear of all liens and encumbrances, and (b) each Seller shall return to Buyer the portion of the Equity Consideration received by such Seller. The Parties agree to take all actions and execute all documents necessary to effectuate such rescission promptly following any such election by the Seller's Representative.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.12** **<u>EB-5 Program Compliance.</u>** Buyer acknowledges that certain investors in the Business prior to the Closing Date have invested capital pursuant to the requirements ofthe EB-5 Immigrant Investor Program administered by the United States Citizenship and Immigration Services ("USCIS"). Purchaser covenants and agrees that, from and after the Closing Date, it shall operate the Business in a manner to preserve the eligibility ofsuch EB-5 investors to qualify for and obtain permanent resident status under the EB-5 Program. Without limiting the generality of the foregoing, Buyer shall not take any action, or fail to take any action, that would reasonably be expected to (i) result in the denial, revocation, or other adverse determination by USCIS of an EB-5 investor's 1-526 or 1-829 petition, or (ii) materially interfere with the satisfaction ofthe job creation, capital at risk, or other requirements applicable to such EB-5 investors.

**ARTICLE 6** 

**CONDITIONS TO CLOSING.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.1** **<u>Conditions to Obligations ofEach Party.</u>** The obligations ofthe Sellers, on the one hand, and Buyer, on the other hand, to consummate the transactions contemplated hereby are subject to the fulfillment, at or before the Closing Date, of the conditions set forth in this Section 6.1, any one or more of which may be waived in writing by the party entitled to the benefit of such condition.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>**No Action or Proceeding.**</u> No preliminary or permanent injunction or other order issued by any Governmental Entity that declares this Agreement invalid in any material respect or prevents or would be violated by the consummation of the transactions contemplated hereby, or which materially adversely affects the assets, properties, operations, net income, or financial condition ofthe Company, is in effect; and no action or proceeding has been instituted or threatened by any Govermnental Entity, other person, or entity which seeks to prevent or delay the consummation of the transactions contemplated by

this Agreement or which challenges the validity or enforceability of this Agreement, the result o f which could constitute a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) **<u>Compliance with Law.</u>** There shall have been obtained all permits, approvals, and consents of all Governmental Entities that counsel for Buyer or for the Seller may reasonably deem necessary or appropriate so that consummation of the transactions contemplated by this Agreement will be in compliance with Applicable Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.2** **<u>Conditions to Obligations of Buyer.</u>** The obligations of Buyer to consummate the transactions contemplated hereby are subject to the fulfillment to Buyer's reasonable satisfaction, at or before the Closing Date, of the conditions set forth in this Section 6.2, any one or more of which may be waived by Buyer in writing in its discretion:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) **<u>Additional Closing Docnments of Sellers.</u>** Buyer has received, or is receiving at the Closing, all o fthe following, each duly executed by the parties thereto (other than Buyer) and dated the Closing Date (or an earlier date satisfactory to Buyer), in form and substance satisfactory to Buyer: (i) Copies o f the resolutions of the managers o f the Company authorizing the execution, delivery, and performance o fthis Agreement and the other Transaction Documents to be delivered by the Sellers and the Company and the consummation ofthe transactions contemplated hereby and thereby, (ii) A certificate o f existence/good standing issued by the Secretary o f State of Florida as of a recent date prior to Closing for the Company. (iii) For Sellers that are not natural persons, certificates of authority with respect to the persons signing and delivering documents on behalf of such Seller and evidence of approval of the transactions contemplated by this Agreement with respect to such Seller.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) **<u>Consents and Approvals.</u>** All required consents, waivers, authorizations, and approvals of any Governmental Entity, and o f any other Person or entity, required under the Contracts, Licenses, or otherwise in connection with the execution, delivery, and performance ofthis Agreement shall have been duly obtained in form reasonably satisfactory to Buyer, shall be in full force and effect on the Closing Date, and the original executed copies shall have been delivered to Buyer on or before the Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) **<u>Other Obligations.</u>** The Sellers shall have paid and satisfied in full the Sellers' Brokers Fees and any other payments or monetary obligations due by the Company or Sellers to any Person as a result of the purchase o f the Membership Interests or the consummation o f the transactions contemplated by this Agreement, including any outstanding loans or creditor obligations. Buyer agrees to add its corporate guarantee to the senior loan and to use reasonable efforts to remove its guarantees o f Harish Mehta and McCarthy Estate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) **<u>Representations and Warranties.</u>** The representations and warranties o f Sellers and the Company in Article 3 shall be true and correct in all material respects as of the Closing Date as i f made on such date, except for representations and warranties made as of a specific date, which shall be true and correct as o f such date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.3** **<u>Conditions to Obligations of the Sellers.</u>** The obligations of the Sellers to consummate the transactions contemplated hereby are subject to the fulfillment, at or before the Closing Date, of the conditions set forth in this Section 6.3, any one or more o f which may be waived by the Sellers' Representative in writing in its discretion:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) **<u>Additional Closing Documents of Buyer.</u>** Buyer has executed and delivered, or is executing and delivering at the Closing copies, certified by an authorized officer ofBuyer, ofresolutions

of its board of directors authorizing the execution and delivery of this Agreement and the other Transaction Documents to be delivered by Buyer and the constunmation of the transactions contemplated hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>**Consents and Approvals.**</u> All required consents, waivers, authorizations, and approvals of any Govermnental Entity, and ofany other person or entity, needed by the Buyer in connection with the execution, delivery, and performance of this Agreement shall have been duly obtained in form reasonably satisfactory to the Sellers, shall be in full force and effect on the Closing Date, and the original executed copies shall have been delivered to the Sellers on or before the Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>**Other Obligations.**</u> The Buyer shall have paid and satisfied in full the Buyer's Brokers Fees and any other payments or monetary obligations due by Buyer to any Person as a result of the purchase of the Membership Interests or the consummation of the transactions contemplated by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>**Representations and Warranties.**</u> The representations and warranties of Buyer in Article 4 shall be true and correct in all material respects as of the Closing Date as if made on such date, except for representations and warranties made as of a specific date, which shall be true and correct as of such date.

**ARTICLE 7** 

**INDEMNIFICATION AND SURVIVAL.**

**7.1** **<u>Survival of Representations and Warranties.</u>** The representations and warranties of the parties contained in this Agreement shall survive the Closing as follows: the representations and warranties in Sections 3.1 (Organization and Good Standing), 3.2 (Ownership of Membership Interests), 3.3 (Authorization of Agreement), 3.23 (Ownership of Membership Interests; Authorization of Agreement),

&nbsp;&nbsp;&nbsp;&nbsp;4.1 (Organization and Corporate Authority), and 4.8 (Securities Law Compliance) and Sections 3.18 (Taxes) and 3.19 (Enviromnental Matters) until the date that is six (6) years following the Closing Date; and (c) all other representations and warranties shall survive for a period of 18 months following the Closing Date. Covenants and agreements shall survive in accordance with their terms.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.2** **<u>Indemnification by Sellers.</u>** Subject to the limitations in Section 7.4, Sellers, jointly and severally, shall indemnify, defend, and hold harmless Buyer, its Affiliates, officers, directors, and successors (collectively, the **"Buyer Indemnified Parties")** from and against any and all losses, damages, liabilities, costs, and expenses, including reasonable attorneys' fees (collectively, **"Losses"),** arising out of or relating to (a) any breach of any representation or warranty of Sellers or the Company in Article 3, (b) any breach of any covenant or agreement of Sellers or the Company in this Agreement, or (c) any Taxes or liabilities of the Company for periods prior to the Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3 <u>**Indemnification by Buyer.**</u> Subject to the limitations in Section 7.4, Buyer shall indemnify, defend, and hold harmless Sellers and their Affiliates, heirs, and successors (collectively, the "Seller Indemnified Parties") from and against any Losses arising out of or relating to (a) any breach of any representation or warranty of Buyer in Article 4, or (b) any breach of any covenant or agreement of Buyer in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.4** **<u>Limitations on Indemnification.</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) No claim for indemnification under Sections 7.2(a) or 7.3(a) shall be made unless the aggregate Losses exceed $25,000 (the **"Basket"),** but once exceeded, the indemnifying party shall be liable for all Losses from the first dollar.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The maximum liability of Sellers under Section 7.2(a) shall not exceed 25% of the Purchase Price, except for breaches of Sections 3.1, 3.2, 3.3, 3.23, which shall be capped at 100% of the Purchase Price.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) No party shall be liable for punitive or consequential damages, except to the extent payable to a third party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Claims for indemnification must be made in writing within the survival period specified in Section 7.1, with notice and opportunity for the indemnifying party to defend or resolve the claim.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The Indemnified Parties shall in all cases exercise commercially reasonable efforts to mitigate the amount of any Losses for which indemnification is sought from any Indemnifying Party hereunder. Without limiting the foregoing, the amount of Losses payable by any Indemnifying Party under this <u>Article VII</u> shall be reduced by (i) any insurance proceeds actually received from an insurance carrier by the Indemnified Party with respect thereto (net of any applicable costs ofrecovery or collection thereof or any increase in premium resulting therefrom), and (ii) indemnity or contribution amounts actually received from third parties (net of any applicable costs ofrecovery or collection thereof): <u>provided, that,</u> in each case, no Indemnified Party shall be required to commence any Action against an insurance carrier or other Person: <u>provided further that</u> if an Indemnified Party receives insurance proceeds, indemnity or contribution amounts, after having received payment from (or on behalf of) any Indemnifying Party with respect to a Loss, such Indemnified Party shall refund the Indemnifying Party up to the lesser of (x) the amount of the insurance proceeds actually received (net of any applicable costs of recovery or collection thereof or any increase in premium resulting therefrom) and (y) the amount of indemnification received by the Indemnified Party from the Indemnifying Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.5** **<u>Indemnification Procedures.</u>** A party seeking indemnification (the **"Indemnified** **Party")** shall promptly notify the indemnifying party (the **"Indemnifying Party")** in writing of any claim, providing reasonable detail. The Indemnifying Party shall have the right to assume control of the defense of such claim, provided it confirms **in** writing its obligation to indemnify. The Indemnified Party shall cooperate in the defense and may participate at its own expense. No settlement shall be made without the Indemnified Party's consent, unless it provides a full release ofthe Indemnified Party without admission of liability.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.6** **<u>Escrow</u> <u>Amount.</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Buyer shall first make claims against the Escrow Fund in connection with the satisfaction of any obligation of the Seller under <u>Section 7.2</u> before seeking recourse against the Sellers. On the date that is twelve (12) months following the Closing Date (the **"Escrow Release Date")** an amount equal to the balance then on deposit in the Escrow Fund <u>minus</u> the aggregate amount, if any, which any Buyer Indemnified Party has claimed under <u>Section 7.2</u> prior to such date (to the extent such Claims, if any, remain unresolved) shall, upon a written instruction to the Escrow Agent executed by Buyer and the Sellers' Representative, be released to the Sellers in accordance with their Pro-Rata Portion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any amount remaining in the Escrow Fund following the Escrow Release Date for the satisfaction of any unresolved Claims, shall be released upon the final resolution of such Claims in accordance with the joint written instructions delivered by Buyer and the Sellers' Representative to the Escrow Agent. If any amount remains in the Escrow Fund following the resolution of all Claims and the distribution to the Buyer Indemnified Parties of any amounts payable to them in connection therewith, Buyer and the Sellers' Representative shall execute and deliver a joint written instruction to the Escrow Agent directing the payment of the remaining balance to the Sellers in accordance with their Pro-Rata Portion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.7 <u>**Exclusive Remedies.**</u> The parties acknowledge and agree that from and after Closing their sole and exclusive remedy with respect to any and all claims for any breach of any representation, warranty, covenant, agreement or obligation set forth herein, shall be pursuant to the indemnification provisions set forth in this <u>ARTICLE 7.</u> In furtherance ofthe foregoing, each party hereby waives, from and after Closing, to the fullest extent permitted under Law, any and all rights, claims and causes of action for any breach of any representation, warranty, covenant, agreement or obligation set forth herein it may have against the other parties hereto and their Affiliates and each of their respective Representatives, except pursuant to the indemnification provisions set forth in this <u>ARTICLE 7.</u> Nothing in this <u>Section 7.7</u> shall limit any Person's right to seek and obtain any equitable relief to which any Person shall be entitled or to.

**ARTICLE 8** 

**TERMINATION.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.1** **<u>Termination Events.</u>** This Agreement may be terminated prior to the Closing:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) by mutual written consent of Buyer and the Sellers' Representative;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) by either Buyer or the Sellers' Representative if the Closing has not occurred by

Sept 15, 2025 (the **"Termination Date"),** provided the terminating party is not in material breach of this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) by either Buyer or the Sellers' Representative if a Governmental Entity issues a final, non-appealable order prohibiting the transactions contemplated hereby; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) by either Buyer or the Sellers' Representative if the other party materially breaches this Agreement and fails to cure such breach within 30 days of written notice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.2** **<u>Effect</u>** <u>of **Termination.**</u> Upon termination pursuant to Section 8.1, this Agreement shall become void and have no further force or effect, except that Sections 5.1 (Confidentiality), 9.1 (Notices),

&nbsp;&nbsp;&nbsp;&nbsp;9.3 (Governing Law), 9.10 (Expenses of Transactions), 9.11 (Submission to Jurisdiction), and 9.12 (Attorneys' Fees) shall survive. Termination shall not relieve any party ofliability for any willful breach of this Agreement prior to termination.

**ARTICLE 9** 

**MISCELLANEOUS.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.1** **<u>Notices.</u>** All notices, requests, demands, and other communications hereunder shall be in writing and shall be deemed given upon personal delivery or three (3) calendar days after being mailed by certified or registered mail, postage prepaid, return receipt requested, or one (I) business day after being sent via a nationally recognized overnight courier service if overnight courier service is requested from such service or upon receipt of electronic or other confirmation of transmission if sent via facsimile, to the parties, their successors in interest, or their assignees at the following addresses and telephone numbers, or at such other addresses or telephone numbers as the parties may designate by written notice in accordance with this Section 9.1:

Ifto Buyer:

Fava Capital, Inc.

4300 N. University Drive Suite D-105 Lauderhill, Florida 33351

Ifto the Sellers or the Company:

1776 Polk Street, Suite 200

Hollywood, FL 33020 Attn: Charles R. Abele, Jr.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.2** **<u>Sellers'</u> <u>Representative.</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Each Seller hereby appoints Charles R. Abele, Jr. as the Sellers' Representative to act as the agent and attorney-in-fact for all Sellers with respect to this Agreement, including receiving and sending notices, granting waivers, resolving disputes, and making decisions on behalf of Sellers. Any decision or action by the Sellers' Representative shall be binding on all Sellers. Buyer may rely on the authority of the Sellers' Representative without further inquiry.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Sellers' Representative shall have full power and authority to take all actions under this Agreement, any applicable Transaction Document and any other agreement entered into or document delivered in connection with the Transaction that are to be taken by or on behalf of the Sellers or by the Sellers' Representative. The Sellers' Representative shall take any and all actions which it believes are necessary or appropriate under this Agreement and any applicable Transaction Document, including giving and receiving any notice or instruction permitted or required under this Agreement and any applicable Transaction Document by the Sellers' Representative, interpreting all of the terms and provisions of this Agreement and any applicable Transaction Document, authorizing payments to be made with respect hereto or thereto, obtaining reimbursement as provided for herein for all out-of-pocket fees and expenses and other obligations of or incurred by the Sellers' Representative in connection with this Agreement and any applicable Transaction Document, defending, negotiating and settling any claims relating to <u>Section 2.4</u> hereof, dealing with Buyer under this Agreement and any applicable Transaction Document, taking any other actions specified in or contemplated by this Agreement and any applicable Transaction Document, and engaging counsel, accountants or other representatives in connection with the foregoing matters. The power of attorney granted by each of the Sellers (on its own behalf and on behalf of its successors and permitted assigns) in this <u>Section 9.1</u> is coupled with an interest, is irrevocable, may be delegated by the Sellers' Representative and shall survive the death, incapacity or dissolution (as applicable) of such Seller and the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>**Authorization.**</u> The Sellers hereby authorize the Sellers' Representative to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) consummate the Transactions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) receive all notices or documents given or to be given to the Sellers pursuant hereto or in connection herewith or therewith and to receive and accept services of legal process in connection with any suit or proceeding arising under this Agreement or any applicable Transaction Document;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) execute and deliver amendments to this Agreement on behalf ofthe Sellers in accordance with <u>Section 8.1;</u> execute and deliver the Escrow Agreement and any other applicable Transaction Document (and any amendments thereto);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) authorize distributions from the Escrow Account on behalf of the Sellers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) engage counsel, accountants and other advisors, and incur other expenses in connection with this Agreement, any applicable Transaction Document and the transactions contemplated hereby or thereby, as the Sellers' Representative may in its sole discretion deem necessary or appropriate; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) take such action as the Sellers' Representative may in its sole discretion deem necessary or appropriate in respect of: (i) waiving any inaccuracies in the representations or warranties of Buyer contained in this Agreement, any applicable Transaction Document or in any document delivered by Buyer pursuant hereto or thereto; (ii) taking such other action as the Sellers' Representative is authorized to take under this Agreement or any applicable Transaction Document (including the Escrow Agreement); (iii) receiving all documents or certificates and making all determinations, in its capacity as Sellers' Representative, required under this Agreement or any applicable Transaction Document (including the Escrow Agreement); and (iv) all such actions as may be necessary to carry out the responsibilities of the Sellers' Representative contemplated by this Agreement or any applicable Transaction Document (including the Escrow Agreement), including the defense and/or settlement of any claims relating to <u>Section 2.4</u> hereof and any waiver of any obligation of Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>**Agency.**</u> Notwithstanding any provision herein to the contrary, the Sellers' Representative is not an agent ofthe Sellers, and shall have no duties to the Sellers or liability to the Sellers with respect to any action taken, decision made or instrnction given by the Sellers' Representative in connection with this Agreement or any applicable Transaction Document: <u>provided, however,</u> that the foregoing exculpation ofthe Sellers' Representative shall not apply to the extent that such actions, decisions or instructions have been finally determined by a court of competent jurisdiction to result from the Sellers' Representative's fraud or willful misconduct in connection with such Sellers' Representative's performance under this Agreement and any applicable Transaction Document.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>**Indemnification of Sellers' Representative.**</u> The Sellers' Representative shall be indemnified by the Sellers for and shall be held harmless against any loss, liability or expense incurred by the Sellers' Representative or any of its Affiliates and any of their respective managers, directors, officers, employees, agents, members, partners, stockholders, consultants, attorneys, accountants, advisors, brokers, representatives or controlling persons, in each case, relating to the Sellers' Representative's conduct as Sellers' Representative, other than losses, liabilities or expenses that have been finally determined by a court of competent jurisdiction to result from the Sellers' Representative's fraud or willful misconduct in connection with its performance under this Agreement and any applicable Transaction Document. This indemnification shall survive the termination of this Agreement and any applicable Transaction Document. The Sellers' Representative may, in all questions arising under this Agreement and any applicable Transaction Document, rely on the advice of counsel and for anything done, omitted or suffered in good faith by the Sellers' Representative in accordance with such advice, and the Sellers' Representative shall not be liable to the Sellers or any other person in connection therewith. In no event shall the Sellers' Representative be liable hereunder or in connection herewith for any indirect, punitive, special or consequential damages.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t) <u>**Reliance.**</u> In the performance of its duties hereunder, the Sellers' Representative shall be entitled to (a) rely upon any document or instrument reasonably believed to be genuine, accurate as to content and signed by any Seller or any party hereunder and (b) assume that any Person purporting to give any notice in accordance with the provisions hereof has been duly authorized to do so. Buyer and its Affiliates shall be entitled to entitled to conclusively and absolutely rely, without inquiry, on any approval, consent, election, notice, decision, agreement, waiver, delivery, interpretation, amendment or other action given, made or taken by the Sellers' Representative for or on behalf of any Seller as if it were expressly ratified and confirmed in writing by such Seller.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>**Irrevocable Appointment.**</u> The appointment of the Sellers' Representative hereunder is irrevocable and any action taken by the Sellers' Representative pursuant to the authority granted in this <u>Section 9.2</u> shall be effective and absolutely binding as the action of the Sellers' Representative under this Agreement and any applicable Transaction Document.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.3** **<u>Assignability and Parties in Interest.</u>** This Agreement and the rights, interests, or obligations hereunder may not be assigned by any of the parties hereto without the prior written consent of the other parties hereto. This Agreement shall inure to the benefit of and be binding upon Buyer and the Sellers and their respective permitted successors and assigns. Nothing in this Agreement will confer upon any person or entity not a party to this Agreement, or the legal representatives of such person or entity, any rights or remedies of any nature or kind whatsoever under or by reason of this Agreement, except for the Buyer Indemnified Parties and Seller Indemnified Parties under Article 7 in connection with indemnification claims and except in connection with permitted assignments as provided above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.4** **<u>Governing Law.</u>** This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Nevada, without regard to its conflicts-of-law principles.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.5** **<u>Counterparts.</u>** Facsimile transmission of any signed original document and/or retransmission of any signed facsimile transmission will be deemed the same as delivery of an original. At the request of any party, the parties will confirm facsimile transmission by signing a duplicate original document. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which shall constitute but one and the same instrument.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.6** **<u>Publicity.</u>** No party shall issue any press release or make any public statement regarding the transactions contemplated hereby without the prior written consent of the other parties, except that Buyer may issue a press release and file a report with the OTC Markets with respect to the transactions contemplated hereby, provided such disclosures are provided to the Sellers' Representative for review at least 48 hours prior to release or filing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.7** **<u>Complete Agreement.</u>** This Agreement, the exhibits and schedules hereto, and the other Transaction Documents contain or will contain the entire agreement between the parties hereto with respect to the transactions contemplated herein and therein and shall supersede all previous oral and written and all contemporaneous oral negotiations, commitments, and understandings.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.8** **<u>Modifications, Amendments, and Waivers.</u>** No supplement, modification, or amendment of this Agreement will be binding unless executed in writing by Buyer and the Sellers' Representative on behalf of all Sellers. No waiver of any of the provisions of this Agreement will be considered, or will constitute, a waiver of any of the rights or remedies, at law or equity, ofthe party entitled to the benefit of such provisions unless made in writing and executed by the party entitled to the benefit of such provision. No waiver of any of the provisions of this Agreement shall constitute a waiver of any other provision, whether or not similar.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.9** **<u>Headings; References.</u>** The headings contained in this Agreement and the other Transaction Documents are for reference purposes only and shall not affect in any way the meaning, construction, or interpretation of this Agreement and the other Transaction Documents. References herein to Articles, Sections, Schedules, and Exhibits refer to the referenced Articles, Sections, Schedules, or Exhibits hereof unless otherwise specified.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.10** **<u>Severability.</u>** Any provision of this Agreement, which is invalid, illegal, or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity, illegality, or unenforceability, without affecting in any way the remaining provisions hereof in such jurisdiction or rendering that or any other provision of this Agreement invalid, illegal, or unenforceable in any other jurisdiction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.11** **<u>Entire Agreement.</u>** This Agreement and the ancillary Transaction Documents constitute the sole and entire agreement of the parties to this Agreement with respect to the subject matter contained herein and therein, and supersede all prior and contemporaneous understandings and agreements, both written and oral, with respect to such subject matter. In the event of any inconsistency between the statements in the body of this Agreement and those in the Transaction Documents, the Exhibits and Disclosure Schedules (other than an exception expressly set forth as such in the Disclosure Schedules), the statements in the body of this Agreement will control. For the avoidance of doubt, the Parties intend that any previously executed or partially executed version(s) ofthis Agreement are expressly superseded by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.12** **<u>Expenses of Transactions.</u>** All fees, costs, and expenses incurred by Buyer, in connection with the transactions contemplated by this Agreement shall be borne by Buyer, and all fees, costs, and expenses incurred by the Sellers or the Company in connection with the transactions contemplated by this Agreement shall be borne by the Sellers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.13** **<u>Submission to Jurisdiction.</u>** All actions or proceedings arising in connection with this Agreement, if any, shall be tried and litigated exclusively in the state or federal courts located in the State of Nevada, or such other venue as may be mutually agreed to by the parties. The aforementioned choice of venue is intended by the parties to be mandatory and not permissive in nature, thereby precluding the possibility of litigation between the parties with respect to or arising out of this Agreement in any jurisdiction other than that specified in this paragraph. Each party hereby waives any right it may have to assert the doctrine of forum non conveniens or similar doctrine or to object to venue with respect to any proceeding brought in accordance with this paragraph, and stipulates that the State and Federal courts located in Nevada shall have in personarn jurisdiction over each of them for the purpose of litigating any such dispute, controversy, or proceeding. Each party hereby authorizes and accepts service of process sufficient for personal jurisdiction in any action against it as contemplated by this Section by registered or certified mail, return receipt requested, postage prepaid, to its address for the giving of notices as set forth in Section 9.1. Nothing herein shall affect the right of any party to serve process in any other manner permitted by law. The parties may, by mutual agreement, elect to resolve disputes through arbitration administered by the American Arbitration Association in Nevada under its Commercial Arbitration Rules, with any resulting award enforceable in the courts specified above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.14** **<u>Attorneys' Fees.</u>** If Buyer or any of its Affiliates, successors, or assigns brings any action, suit, counterclaim, cross-claim, appeal, arbitration, or mediation for any relief against the Sellers or any of their respective Affiliates, successors, or assigns, or if the Sellers or any of their respective Affiliates, successors, or assigns brings any action, suit, counterclaim, cross-claim, appeal, arbitration, or mediation for any relief against Buyer or any of its Affiliates, successors, or assigns, declaratory or otherwise, to enforce the terms hereof or to declare rights hereunder (collectively, an **"Action"),** in addition to any damages and costs which the prevailing party otherwise would be entitled, the non-prevailing party shall pay to the prevailing party a reasonable sum for attorneys' fees and costs (at the prevailing party's attorneys' then-prevailing rates) incurred in bringing or defending such Action and/or enforcing any judgment, order, ruling, or award (collectively, a **"Decision")** granted therein, all of which shall be deemed to have accrued on the commencement of such Action and shall be paid whether or not such action is prosecuted to a Decision. Any Decision entered in such Action shall contain a specific provision providing for the recovery of attorneys' fees and costs incurred in enforcing such Decision.

For the purposes of this Section, attorneys' fees shall include, without limitation, fees incurred in the following: (1) postjudgment motions and collection actions; (2) contempt proceedings; (3) garnishment, levy, and debtor and third-party examinations; (4) discovery; and (5) bankruptcy litigation,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.15** **<u>Representation of the Sellers, the Sellers' Representative and its Affiliates.</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Buyer and each of the other Parties acknowledges that Shumaker, Loop & Kendrick **("SLI(")** has acted as counsel to the Company, its Subsidiaries, the Sellers' Representative, certain of the Sellers and certain members of the Company's management (in their capacities as equityholders of the Sellers) in connection with the negotiation of this Agreement and the Transactions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Accordingly, Buyer consents and agrees, on its own behalf and on behalf of the Company and its Subsidiaries (collectively with Buyer, the **"Conflict Parties"),** that, following the Closing, SLK may serve as counsel to the Sellers' Representative, any of the Sellers and members of the Company's management (collectively, the **"Seller Parties"),** including with respect to any litigation, claim or obligation arising out of or relating to this Agreement or the transactions contemplated by this Agreement, or otherwise where the interests ofthe Seller Parties may be directly adverse to Buyer and its Subsidiaries (including the Conflict Parties), notwithstanding any representation by SLK prior to the Closing of the Conflict Parties in a matter substantially related to any such dispute(s), and notwithstanding whether SLK may be handling ongoing matters for the Conflict Parties. Buyer, on behalf of itself and the other Conflict Parties, hereby (a) waive any claim they have or may have that SLK has a conflict of interest or is otherwise prohibited from engaging in such representation and (b) agree that, in the event that a dispute arises after the Closing between Buyer, the Company or any of its Subsidiaries, on the one hand, and any Seller Part(y)(ies), on the other hand, SLK may represent such Seller Part(y)(ies) in such dispute even though the interests of such Person(s) may be directly adverse to Buyer or the Company, and even though SLK may have represented the Seller Parties in a matter substantially related to such dispute or may be handling ongoing matters for the Conflict Parties. Buyer, on behalf of itself and the other Conflict Parties, further consents and agrees to, the communication by SLK to the Seller Parties in connection with any such representation of any fact known to SLK arising by reason ofSLK's prior representation ofthe Conflict Parties. Buyer represents that Buyer's own attorney has explained and helped Buyer evaluate the implications and risks of waiving, on behalf of itself and the other Conflict Parties, the right to assert a future conflict against SLK, and Buyer's consent, including on behalf ofthe other Conflict Parties, with respect to this waiver is fully informed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Buyer, on behalf of itself and the other Conflict Parties, also further agrees that all communications in any form or format whatsoever between or among SLK, on the one hand, and any of the Conflict Parties, the Sellers, the Sellers' Representative, their respective Affiliates and their and their Affiliates' respective Representatives, on the other hand, that relate in any way to the negotiation, documentation and consummation of the transactions contemplated by this Agreement, any alternative transaction(s) to the transactions contemplated by this Agreement presented to or considered by any ofthe Conflict ·Parties, or any dispute arising under this Agreement (collectively, the **"Privileged Communications")** shall be deemed to be attorney-client privileged and that such attorney-client privilege and any expectation of client confidence relating thereto belongs to the Sellers' Representative and the Sellers, shall be controlled by the Sellers' Representative on behalf of the Sellers, and will not pass to or be claimed by any of the Conflict Parties (including Buyer or the Company). It is acknowledged and agreed that any failure by the Sellers or the Company or any of its Subsidiaries to remove documents, emails and other non-email electronic documents concerning the negotiation or drafting ofthis Agreement, or any other agreement previously contemplated by the Sellers which, if consummated, would have resulted in a transaction substantially similar to the one contemplated by this Agreement, which are protected by the attorney-client or work product privilege(s), or which constitute Non-Privileged Communications, is inadvertent and Buyer shall not, and shall cause its Subsidiaries (including the Company), and its and their respective directors, managers, employees, officers and other Representatives not to, intentionally use or attempt to use any means to access, retrieve, restore, recreate, 1marchive or otherwise gain access to or view any such materials for any purpose.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Buyer further agrees, on behalf of itself and the other Conflict Parties, that all communications in any form or format whatsoever between or among SL!(, on the one hand, and any of the Conflict Parties, the Sellers, the Sellers' Representative, their respective Affiliates and their and their Affiliates' respective Representatives, that relate in any way to the negotiation, documentation and consummation of the transactions contemplated by this Agreement, any alternative transaction(s) to the transactions contemplated by this Agreement presented to or considered by any of the Conflict Parties, or any dispute arising under this Agreement and that are not Privileged Communications **("Non-Privileged** **Communications")** shall also belong solely to the Sellers' Representative and the Sellers (and not the Conflict Parties) and shall not pass to or be claimed by Buyer or any of the other Conflict Parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) In addition, all ofthe client files and records in the possession of SLK, to the extent related to this Agreement and the transactions contemplated hereby or otherwise, will continue to be property of (and be controlled by) the Sellers' Representative and the Sellers, and neither Buyer, the Company nor any other Conflict Party will have any access to them, nor shall SLK have any duty to reveal or disclose any such files and records or other materials or any Privileged Communications by reason of any attorney-client relationship between SLK, on the one hand, and the Company or any of its Subsidiaries, on the other hand.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Notwithstanding the foregoing, in the event that a dispute arises between Buyer or the other Conflict Parties (including the Company), on the one hand, and a third party other than the Sellers' Representative or the Sellers, on the other hand, after the Closing, the Company or the other applicable Conflict Party may assert the attorney-client privilege to prevent disclosure of Privileged Communications by SLK to such third party: <u>provided, however,</u> that no Conflict Party (including the Company) may waive such privilege without the prior written consent ofthe Sellers' Representative. In the event that any Conflict Party is requested or required by governmental order or otherwise to access or obtain a copy of all or any portion of the Privileged Communications, Buyer shall promptly, but in any event within two (2) Business Days, notify the Sellers' Representative in writing (including by making specific reference to this Section) so that the Sellers' Representative or the applicable Seller(s) can seek a protective order, and Buyer agrees to use, and to cause the other Conflict Parties to use, all commercially reasonable efforts to assist therewith.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, each of the parties hereto has executed this Membership Interest PurchaseAgreement as of the date first above written.

FAVO CAPITAL, INC.

By: <u>/s/ Shaun Quin</u>

Name: Shaun Quin

Title: CEO

BLOCK 40 MANAGERS, LLC

By: /<u>s/ Charles R. Abele Jr.</u>

Name: Charles R. Abele, Jr.

Title: Authorized Representative

**List of Exhibits**

**Schedule 1 Membership Interest** 

**Exhibit A Allocation Schedule** 

**Exhibit B Management Agreement**

**Schedule 3.1 Operating Permits**

**Schedule** **3.6 Owned Real Property & Leased Real Property**

**Schedule** **3.7 Intellectual Property Owed/ Leased**

**Schedule** **3.9 Consents**

**Schedule** **3.10 Employee Benefit and Labor Matters**

 **Schedule** **3.11 Litigation**

**Schedule** **3.14 Licenses**

**Schedule** **3.15 Intercompany and Affiliate Transactions**

**Schedule** **3.16 Insurance**

**Schedule** **5.3 Management and Employment Agreement** 

**Schedule 1**

**Members' Signatures and Ownership**

---

| | |
|:---|:---|
| **Members** | **Membership Interest in the Company** |
| ARG PROPERTY HOLDINGS, LLC | 19.6867% Membership Interest |
| By: Charles R. Abele Jr. |  |
| <u>/s/ Charles R. Abele Jr.</u> |  |
| BCP Regional, LLC | 19.6867% Membership Interest |
| By: Jose R. Boschetti |  |
| <u>/s/ Jose R. Boschetti</u> |  |
| JAGFAM Investments, LLC | 19.6867% Membership Interest |
| By: Peter Jago |  |
| <u>/s/ Peter Jago</u> |  |
| FAHA 2 Trust, LLC | 19.6867% Membership Interest |
| By: NIAMH TARGETr, in her capacity as Personal Representative Nominee UNDER THAT CERTAIN WILL AND TESTAMENT OF DANIEL MCCARTHY |  |
| <u>/s/ Niamh Target</u> |  |
| MANTON 3, LLC | 10.626% Membership Interest |
| By: Harish Mehta |  |
| <u>/s/ Harish Mehta</u> |  |
| MUIR.FIELD USA,LLC | 10.6267% Membership Interest |
| BY: Estate of Cecil Reddy |  |
| <u>/s/ Estate of Cecil Reddy</u> |  |

---

 

 

**Exhibit B** 

**Management Agreement**

**(See** **attached)**

**<u>MANAGEMENT</u> <u>AGREEMENT</u>**

**THIS MANAGEMENT AGREEMENT,** made as of July 30, 2025, by and between **BLOCK 40, LLC,** a Florida limited liability company ("Owner" or "Company"), having its principal place of business at 1776 Polk Street, Suite 200, Hollywood, Florida 33020 and **GCF** **DEVELOPMENT, LLC,** a Florida limited liability company ("Manager"), having its principal offices at 1776 Polk Street, Suite 200, Hollywood, **FL** 33020.

<u>PRELIMINARY</u> <u>STATEMENT</u>

**WHEREAS,** Owner desires to, develop and operate the Project (as defined herein) and to retain the Manager to be the development manager of the Project, and to provide its services and expertise in connection with the management, accounting and administrative services required for the development, supervision ofconstruction and operation of the Project, as a Class A Mixed-use building; and

**WHEREAS,** Manager desires to be retained as the Project's development manager and to provide such expertise and services, all upon the terms and conditions hereinafter set forth.

**NOW, THEREFORE,** Owner and Manager agree as follows:

**<u>ARTICLE I DEFINITIONS</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1Definitions. As used herein, the following terms shall have the respective meanings indicated below.

<u>Affiliate</u> - With respect to any entity, any natural person or firm, corporation, partnership, association, trust or other entity which, directly or indirectly, controls, is controlled by, or is under common control with, the subject entity; a natural person or entity which has another entity as an Affiliate under the foregoing shall also be deemed to be an Affiliate of such entity. For purposes hereof, the terms "control" shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of any such entity, or the power to veto major policy decisions of any such entity, whether through the ownership of voting securities, by contract, or otherwise.

<u>Budget</u> - The "Budget" adopted by the Owners' members, as amended and supplemented from time to time by the Owner's Management Committee in accordance with the Owner's operating agreement.

<u>Disbursement Agent</u> - The party designated by the Manager to disburse the investment proceeds from an Offering in accordance with a Disbursement Agreement. The Disbursement Agent may be an Affiliate of the Manager.

<u>Disbursement Agreement</u> - The agreement to be entered into between the Owner and a Disbursement Agent to disburse the investment proceeds from an Offering.

<u>Legal Requirements</u> - All public laws, statutes, ordinances, orders, rules, regulations, permits, licenses, authorizations, directions and requirements of all governments and governmental authorities, which, now or hereafter, may be applicable to the Project and the operation thereof, including, without limitation, those relating to zoning, building, fire safety, environmental and health, employee benefits, and providing continued health care coverage under the Employees Retirement Income Security Act of 1974, as amended.

<u>Management Fee</u> - The fees payable to the Manager as set forth in Article IV hereof.

<u>Offering</u> - The private placement memorandum of the Owner that may be used to raise equity investment proceeds from foreign national investors pursuant to an EB-5 Private Placement Offering (the "EB-5 Offering"), and/or other investors via conventional investment banking efforts.

<u>Project</u> - The construction, financing, development and operation of a 229 unit, residential apartment building of approximately 543,936 square foot upon the Hollywood, Florida property (known as "Block 40, City of Hollywood Plat Book B, page 21 ofthe Public Records ofBroward County, Florida) in accordance with plans ofFullerton Diaz. It is currently contemplated the Project will be marketed under the name "Young Circle Commons" and that it will be financed all or in part by the Offering and/or HUD Financing, and/or conventional investment banking efforts.

**<u>ARTICLE II</u> <u>TERM</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1 <u>Term.</u> The term of this Agreement shall commence on the date hereof and shall continue for so long as the Owner owns or controls the Project or has the authority or right to appoint the persons who will operate, manage or supervise the Project (including upon and after its completion), including persons performing property management, leasing agency and similar services.

**<u>ARTICLE III</u>**

**<u>MANAGEMENT AUTHORITY</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1 <u>Authority and Duty of Manager.</u> The Manager shall have the sole and exclusive right and obligation to manage the development, investment, supervisory, accounting and administrative functions in connection with the operation of the Project as agent on behalf of Owner pursuant to the terms of this Agreement. In connection therewith, Manager shall have the authority and responsibility to determine operating policy and any other matters affecting operations and management related to the Project.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Manager shall insure that monies are properly received, disbursed, and accounted for whether into the Owner's accounts or any escrow accountsrequired by any Disbursement Agreement, or other capital raise or loan agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Manager shall administer any and all Disbursement Agreements and/or loan agreements and ensure that proper reporting is provided as required by said agreements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Manager shall provide financial reporting and tax reporting to the members and taking primary responsibility for causing the partnership tax return of the Owner to be filed on an annual basis. The tax return will be prepared by, and related tax services will be provided by, a certified public accounting firm handling all tax matters on behalf of the Owner. The Manager shall not have any responsibility for filing any tax returns on behalf of the members of the Owner.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2 <u>Delegation of Authority by Manager.</u> Manager shall be specifically authorized to delegate authority to other persons, including Affiliates of the Manager, to perform the following services:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Disbursement and other services in connection with an Offering pursuant to a Disbursement Agreement as long as the consideration for industry standard charges.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Tax services may be provided by an accounting firm selected by the Manager for industry standard rates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Legal services in connection with the any real estate transactions as well as any other matters for which the Manager needs to seek legal counsel on behalf of the Owner.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3 <u>Additional Responsibilities of Manager.</u> Manager shall, as agent of Owner, either in its own name, or in the name of Owner, perform the following additional services, or cause the same to be performed for the Project:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Enter into such contracts for the furnishing ofadministrative services related to the Project, as shall be reasonably necessary for the proper operation thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Apply for, and use its best efforts to obtain and maintain all licenses and permits required of the Owner or Manager in connection with the operation of the Project. Owner agrees to execute and deliver any and all applications and other documents as shall be reasonably required and to otherwise cooperate, in all reasonable aspects, with Manager in applying for, obtaining and maintaining such licenses and permits.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Use its reasonable best efforts to do, or cause to be done, all such acts and things in and about the Project as shall be reasonably necessary to comply with Legal Requirements.

**<u>ARTICLE</u> <u>IV</u>**

<u>**MANAGEMENT FEES AND OVERHEAD EXPENSES**</u>

Manager is entitled to the following fees (the "Management Fees")

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Loan Guarantee Fees equal to 1.5% of any debt outstanding from time to time, to which principals, executives or affiliates of the Manager have provided loan guarantee(s). These guarantees and this fee shall survive any termination of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Commission override of 0.5% of total real estate sales and leases involving all Project units and other areas.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Asset management fee of 1.0% per annum of total market value of Project.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. A monthly overhead reimbursement and administrative fee equal to $120,000 per month.

The Management Fees shall be paid by the Owner to the Manager in such periodic installments or other times as determined by agreement of the Owner and the Manager. The Owner shall assure that the Management Fees are included in the Company's Budget and that sufficient funds are set aside or reserved for their payment of the same on a timely basis for a period of three

&nbsp;&nbsp;&nbsp;&nbsp;(3) years. The Owner will be promptly pay any and all outstanding and accrued accounts payable of Owner *I* Company.

**<u>ARTICLE</u> <u>V</u>**

<u>**ACCOUNTS; WORKING FUNDS; RECORDS AND REPORTS**</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1 <u>Bank Accounts.</u> Bank accounts for the Project will be established at a banking institution or institutions approved by Manager, such accounts to be in the Owner's name. Manager will deposit in such bank accounts all monies furnished by Owner and all monies received from the operation of the Project and shall disburse the same for the purposes set forth in the following Section 5.2.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2 <u>Expenditures.</u> From the Owner's bank accounts, Manager is hereby authorized to pay such amounts and at such times as required in connection with the ownership, construction, development, maintenance and operation of the Project and related facilities, including, without limitation, the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. All fees, costs and expenditures incurred or made in connection with the services of Manager, and its authorized agents, contractor s and delegates, performed within the scope of this Agreement, and all other expenditures which Manager is permitted or required to make under any provision of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Premiums for any insurance maintained by Manager.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. The Management Fees computed in accordance with the provisions of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. All approved offering expenses.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. All construction and development expenses as set forth in the Budget.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3 <u>Books and Records.</u> Manager shall keep or cause to be kept full and adequate books of account and such other records as are necessary to reflect the results of the construction, development and operation of the Project. For this purpose, Owner agrees that it will make available to Manager, or its representatives, all books and records, including contract documents, invoices and all other records pertaining to the Project. The books and records for the Project shall be maintained in accordance with generally accepted accounting principles consistently applied, or such other accounting method(s) as the Owner and Manager agree upon from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.4 <u>Reports to Owner.</u> Manager shall deliver, or cause to be delivered, to Owner the following statements:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Within thirty (30) days after the end of each calendar quarter, a detailed financial report, showing the results of operation of the Project for such month and year to date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Within ninety (90) days after the expiration of each calendar year, a balance sheet, a related statement for profit and loss as of December 31<sup>st</sup>, each year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.5 <u>Return of Escrowed Funds in Offering.</u> If the Company engages in an EB-5 or any other kind of Offering, the Manager is obligated to cause escrowed funds to be returned to investors if the Offering funding conditions are not met as set forth in the prospectus, subscription agreement or other Offering materials. For the avoidance of doubt, this would include EB-5 investors to the extent they do not qualify for residency status pursuant to the 1-526 application.

**<u>ARTICLE VI</u>**

**<u>INDEMNIFICATION PROVISIONS</u>**

To the fullest extent permitted by applicable law, the Manager, and each of its managers, officers, employees, agents and other persons under its supervision who are performing services for or on behalf of the Owner or the Manager within the scope of this Agreement (each a "Covered Person") shall be entitled to indemnification from the Owner for any loss, damage or claim incurred by such Covered Person by reason of any act or omission performed or omitted by such Covered Person within the scope of this Agreement, provided that: (i) any such action was undertaken in good faith on behalf of the Owner or the Manager and in a manner reasonably believed to be in, or not opposed to, the best interests of the Owner, (ii) any such action was reasonably believed to be

within the scope of authority conferred on such Covered Person by this Agreement, and (iii) with respect to any criminal action or proceeding, such Covered Person had no reasonable cause to believe his action or omission was unlawful; provided further, that no Covered Person shall be entitled to be indemnified in respect of any loss, damage or claim incurred by such Covered Person by reason of gross negligence or willful misconduct with respect to such acts or omissions. To the fullest extent permitted by applicable law, expenses (including legal fees) incurred by a Covered Person in defending any claim, demand, action, suit or proceeding shall, from time to time, be advanced by the Owner prior to the final disposition of such claim, demand, action, suit or proceeding upon receipt by the Owner of an undertaking by or on behalf of the Covered Person to repay such amount if it shall be determined that the Covered Person is not entitled to be indemnified under the foregoing provisions.

**<u>ARTICLE VII</u>**

**<u>TERMINATION RIGHTS</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1 <u>Termination by Owner.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Subject to Section 7.3, if Manager shall be in material breach of the provisions of this Agreement, and such default shall continue for a period of thirty (30) days after notice thereof by Owner to Manager, then Owner shall have the right to terminate this Agreement upon written notice to Manager given at any time following the occurrence of such event, or if an additional grace period is provided beyond such 30-day period, then following the expiration of such grace period. Any such termination shall be effective upon the date specified in such written notice, which date shall not be less than fifteen (15) days nor more than sixty (60) days after the date of the giving of such notice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Owner shall also have the right to cancel this Agreement for any reason, upon thirty (30) days written notice to Manager, subject to a break fee equal to twelve (12) months of fees provided for herein, but in no event shat the guarantee fee be terminated as long as the loan is outstanding and the loan guarantees are in place.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2 <u>Termination by Manager.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Subject to Section 7.3, if Owner shall fail to keep, observe or perform any material covenant, agreement, term or provision of this Agreement to be kept, observed or performed by Owner, and such default shall continue for a period of thirty (30) days after notice thereof by Manager to Owner, then Manager shall have the right to terminate this Agreement upon written notice to Owner given at any time following the occurrence of such event, or if an additional grace period is provided beyond such 30-day period, then following the expiration of such grace period. Any such termination shall be effective upon the date specified in such written notice, which date shall not be less than thirty (30) days nor more than sixty (60) days after the date of the giving of such notice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. If Owner shall apply for or consent to the appointment of a receiver, trustee or liquidator of Owner or of all or a substantial part of its assets, file a voluntary petition in bankruptcy or admit in writing its inability to pay its debts as they come due, make a general assignment for the benefit of creditors, file a petition or an answer seeking reorganization or arrangement with creditors or to take advantage of any insolvency law, or file an answer admitting the material allegations of a petition filed against Owner in any bankruptcy, reorganization or insolvency proceeding, or if an order,jud<sub>gm</sub> ent or decree shall be entered by any court of competent jurisdiction, on the application of a creditor, adjudicating Owner a bankrupt or insolvent or approving a petition seeking reorganization of Owner or appointing a receiver, trustee or liquidator of Owner or of all or a substantial part of the assets of Owner, and such order, judgment or decree shall continue unstayed and in effect for any period of sixty (60) consecutive days, then Manager shall have the right to terminate this Agreement upon written notice to Owner given at any time following the occurrence of such event, or if a period of grace is provided, then following the expiration of the applicable grace period. Any such termination shall be effective upon the date specified in such written notice, which date shall not be less than thirty (30) days nor more than sixty (60) days after the date of the giving of such notice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Manager shall also have the right to cancel this Agreement for any reason, upon thirty (30) days written notice to Owner.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3 <u>Curing Defaults.</u> Any default by Manager under clause Section 7.1.a. or Owner under Section 7.2.a., as the case may be, which is susceptible of being cured, shall not constitute a basis of termination if the nature of such default shall not permit it to be cured within the 30-d<sub>ay</sub> period specified in such section (and such additional grace period that may be allotted by the other party); provided that promptly after being notified in writing of the default the defaulting party shall have commenced to cure such default and shall proceed to complete the same with reasonable diligence.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4 <u>Effect of Termination.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. The termination of this Agreement under the provisions ofthis Article 7 shall not affect the rights of the terminating party with respect to any damages it has suffered as a result of any breach of this Agreement, nor shall it affect the rights ofeither party with respect to liability or claims accrued, or arising out of events occurring, prior to the date of termination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. For the avoidance of doubt, and without limiting any remedies or claims for damages that may be available to the Manager or the Owner, any accrued Management Fees remaining unpaid as of the date of termination shall be immediately paid to the Manager at the time of termination, irrespective of which party terminates this Agreement and irrespective of the grounds for termination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Notwithstanding anything in this Agreement to the contrary, if the Owner terminates this Agreement (or the terminates, suspends or othetwise discontinues the services of the Manager) for any reason other than as set forth in Section 7.1.a., then the Manager shall be entitled to receive: (i) one hundred percent (100%) of the same Management Fees it would have been entitled to receive had no termination occurred, the payment of which shall be made to Manager or its designee(s) for a period of ninety (90) days following the effective date of such termination, and (ii) for a period of three (3) years thereafter, sixty percent (60%) of the same Management Fees it would have been entitled to receive had no termination occurred, the payment of which shall continue to be made to Manager or its designee(s) immediately following the 90-day period in clause (i) above. The continuing Management Fees described in this subsection shall be calculated and paid on monthly basis throughout the 90-day and 3-year terms described above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.5 <u>Remedies Cumulative.</u> Neither the right of termination nor the right to sue for damages nor any other remedy available to either party hereunder shall be exclusive of any other remedy given hereunder or now or hereafter existing at law or in equity.

**<u>ARTICLE VIII</u>**

**<u>ASSIGNMENTS</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.1 <u>Assignment by Manager.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>a. Prohibited Assignments.</u> Except as provided in the following Subsection b, Manager shall not assign this Agreement without the prior written consent of Owner. The disposition by Manager of its controlling interest in any Affiliate, to which it has previously assigned this Agreement, shall be deemed to be a prohibited assignment hereunder requiring the prior written consent of Owner. It is understood and agreed that any consent granted by Owner to any such assignment shall not be deemed a waiver of the covenant contained against assignment in any subsequent case.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. <u>Permitted Assignments.</u> Manager, without the consent of Owner, shall have the right to assign this Agreement to any Affiliate of Manager, or to any entity which may become an Affiliate as a result ofa related and substantially concurrent transaction, or to any successor or assign of Manager which may result from any merger, consolidation or reorganization involving Manager, or to a corporation or other entity which shall acquire all or substantially all of the business and assets of Manager, or to any company or entity which shall succeed to that portion of Manager's business which consists of managing and operating the Project. Upon execution of any assignment as aforesaid, notice thereof in the form of a duplicate original of such assignment shall be delivered to Owner forthwith, and thereupon, except in the case of an assignment to an Affiliate of Manager, Manager shall be

released ofall of its covenants and liabilities hereunder, other than liabilities accruing, or based upon events occurring prior to the date of the delivery of such duplicate original to Owner; provided, however, that such release shall be contingent upon the concurrent delivery to Owner of an appropriate instrument whereby the assignee shall assume all of the obligations of Manager hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.2 <u>Successors and Assigns.</u> Subject to the foregoing, this Agreement shall inure to the benefit of and be binding upon the parties hereto, their respective heirs, legal representatives, successors and assigns.

**<u>ARTICLE IX</u>**

**<u>INTELLECTUAL PROPERTY</u>**

Owner acknowledges that Manager or will be permitted to utilize the intellectual property of the Project including (i) software in use at one or more other Project locations and all source and object code versions thereof and all related documentation, flow charts, user manuals, listing, and service/operator manuals and any enhancements, modification, or substitutions thereof, and (ii) trade names, trademarks, trade secrets, know-how and other proprietary information relating to the operating methods, procedures and policies distinctive to Project. Manager shall utilize the intellectual property in connection with the operation of the Project to the extent that it deems appropriate for the purpose of carrying out its agreements and obligations hereunder.

**<u>ARTICLE X</u>** 

**<u>GENERAL PROVISIONS</u>**

I 0.1 <u>Owner Instructions and Decisions.</u> Any instructions or decisions to be made by the Owner under this Agreement shall be made by its "Management Committee" (or its successor manager) in accordance with the Owner's operating agreement.

I0.2 <u>Notices.</u> Except as otherwise provided in this Agreement, all notices, demands, requests, consents, approvals and other communications (herein collectively called "Notices") required or permitted to be given hereunder, or which are to be given with respect to this Agreement, shall be in writing sent by registered or certified mail, postage prepaid, return receipt requested, addressed to the party to be so notified as follows:

If to Owner: BLOCK 40, LLC

c/o FAVO Capital Attn:

If to Manager: GCF Development, LLC

1776 Polk Street

Suite 200

Hollywood, FL 33020

Attn: Charles (Chip) R. Abele, Jr.

Any Notice shall be deemed delivered upon receipt. Either party may at any time change the addresses for Notices to such party by mailing a Notice as aforesaid. Notices may also be delivered by (i) hand, (ii) special courier, or (iii) telegram, telex or other electronic written communication, provided that in utilizing any form of delivery authorized by clause (iii) of this sentence, receipt of such notice must be acknowledged by the addressee through appropriate written communication.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.3 <u>No Lease. Partnership or Joint Venture.</u> Nothing contained in this Agreement shall be construed to be or create a lease, partnership or joint venture between Owner, its successors or assigns, on the one part, and Manager, its successors and assigns, on the other part.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.4 <u>Modification and Changes.</u> This Agreement cannot be changed or modified except by another agreement in writing signed by the party sought to be charged therewith, or by its duly authorized agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.5 <u>Understandings and Agreements.</u> This Agreement constitutes all of the understandings and agreements of whatsoever nature or kind existing between the parties with respect to Manager's management of the Project. The parties hereby acknowledge, represent and agree that in entering into this Agreement, they are not relying upon any statement, representation or promise, or the failure to make any statement, representation or promise, of any other party (or of any officer, agent, employee, representative or attorney for any other party), in executing this Agreement except as expressly stated herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.6 <u>Headings.</u> The Article and Section headings contained herein are for convenience and reference only and are not intended to define, limit or describe the scope or intent of any provision of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.7 <u>Consents.</u> Each party agrees that any provision of this Agreement which permits such party to make requests of the other party shall not be construed to permit the making ofunreasonable requests.

I0.8 <u>Survival of Covenants.</u> Any covenant, term or provision ofthis Agreement which, in order to be effective, must survive the termination of this Agreement, shall survive any such termination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.9 <u>Jurisdiction.</u> This Agreement shall be governed by the laws of the State of Florida, and jurisdiction for any action arising hereunder shall be Broward County, Florida.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.10 <u>Counterparts and Facsimile Copies.</u> This Agreement may be executed in two (2) or more counterparts, each ofwhich shall be deemed an original, and facsimile copies shall be deemed originals.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.11 <u>Waiver of Jury Trial.</u> THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY ANDINTENTIONALLYWAIVESANY ANDALLRIGHTTHEYMAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION (INCLUDING, BUT NOT LIMITED TO, ANY CLAIMS, CROSS CLAIMS OR THIRD PARTY CLAIMS) ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS LOAN AGREEMENT

**AND THE OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREIN. THEPARTIESHEREBYCERTIFYTHATNOREPRESENTATIVEORAGENT OF THE MANAGER NOR THE MANAGER'S COUNSEL HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE BANK WOULD NOT, IN THE EVENT OF SUCH LITIGATION, SEEK TO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL PROVISION.**

**[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]**

The undersigned have signed this Management Agreement as of the date set forth above.

**OWNER:**

**BLOCK 40, LLC**

a Florida limited liability company

By:

Name:

Title:

**MANAGER:**

**GCF DEVELOPMENT, LLC**

a Florida limited liability company

By:

Name:

Title:

**Schedule 3.l(b):** 

**Operatiug Permits**

**None.**

**Schedule 3.6** 

**Property**

**Owned Real Property**

None.

**Leased Real Property**

None.

**Schedule 3. 7**

**Intellectual Property**

**Owned Intellectual Property**

None.

**Licensed Intellectual Property**

None.

**Open Source Materials**

None.

**Schedule 3.9** 

**Consents**

Blackstone Inc or its Affiliate, as successor in interest to Deutsche Bank pursuant to that certain Loan Agreement dated June 1, 2022 between Block 40 Property, LLC and Deutsche Bank AG, New York Branch, as amended.

**Schedule** **3.10**

**Employee Benefits and Labor Matters**

**Employee Benefit Plans**

None.

**Employment Agreements**

None.

**Labor** **Matters**

None.

**Schedule 3.11** 

**Litigation**

On August 11, 2022, A&J Capital, Inc. ("A&J") filed an arbitration claim against the Company's subsidiary, Block 40, LLC ("Block 40") seeking damages for breach of the parties' Services Agreement. Block 40 defended the claim on a number of grounds, arguing that the conversion of a related entity, Hollywood Circle, LLC to a Delaware corporation terminated the need for the services as of the conversion date, and therefore, the only fees owed were up to the date of the conversion. On July 31, 2024, an arbitration panel entered a corrected final arbitration award ("Award") in favor of A&J and against Block 40 in the amount of $555,607.09 as of February 29, 2024, which amount continues to accrue interest at the per diem rate of $736.99 plus continuing prejudgment interest thereon at the per diem rate of $130.26 until fully satisfied. On August 23, 2024, A&J filed a petition in Broward County, Florida, CACE-24-01257, seeking to confirm the Award and to enter a judgment against Block 40 for all sums in the Award. In the Broward County proceedings on October 22, 2024, Block 40 timely filed its answer to A&J's petition and its own counterpetition seeking to set aside the Award, which remains pending.

**Schedule 3.14** **Licenses**

None.

**Schedule** **3.15**

**Intercompany and Affiliate Transactions; Insider Interests**

&nbsp;&nbsp;&nbsp;&nbsp;1. Management Agreement dated June 21, 2013 between Block 40, LLC and Block 40 Managers, LLC

&nbsp;&nbsp;&nbsp;&nbsp;2. Amended and Restated Management Agreement dated June 19, 2020 between Block 40, LLC and Block 40 Managers, LLC

**Schedule 5.3**

**Management** **and Employment Agreements**

**Employment** **Agreements**

---

| | | | |
|:---|:---|:---|:---|
| **Employee Name** | **Position** | **Agreement Date** | **Key Terms** |
| Charles R Abel, Jr. | CEO | July 11, 2025 | To be negotiated |
| Peter Jago | VP | July 11, 2025 | To be negotiated |

---

## Exhibit 2.10

**MEMBERSHIP INTEREST PURCHASE AGREEMENT**

This Membership Interest Purchase Agreement (this **"Agreement")** is entered into as of July 11, 2025, by and among **Block 40 Investments Holdings, LLC,** a Florida limited liability company (the **"Company"), Favo Capital, Inc.,** a Nevada corporation **("Buyer"),** the members of the Company listed on Schedule I attached hereto **("Sellers"),** and **Charles R. Abele, Jr.,** as Sellers' Representative (the **"Sellers' Representative").**

**Recitals**

**WHEREAS,** the Company owns 74.6% ofthe outstanding membership interests ofBlock40, LLC, a Florida limited liability company that, together with its wholly owned subsidiaries, operates a mixed use real estate development in Hollywood, Broward County, Florida known as "Block 40" (the **"Business").**

**WHEREAS,** Sellers own one hundred percent (100%) of the outstanding membership interests of the Company (the **"Membership Interests");** and

**WHEREAS,** Sellers desire to sell and Buyer desires to acquire the Company by means of Buyer's acquisition of the Membership Interests as provided herein (the **"Transaction"),** with the Business of the Company continuing as a wholly-owned subsidiary of Buyer.

**NOW, THEREFORE,** for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

**ARTICLE I** 

**DEFINITIONS**

For purposes of this Agreement, the following terms shall have the meanings set forth below:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) **"Affiliate"** shall have the meaning ascribed to such term in Rule 405 under the

Securities Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) **"Allocation Schedule"** means the schedule attached hereto as <u>Exhibit A,</u> setting

forth, with respect to each Seller, (a) the total number of shares of Buyer Common Stock to be issued to such Seller at Closing and (b) the dollar value of such shares based on the agreed-upon valuation, in each case as of the Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) **"Business Day"** means any day other than a Saturday, Stmday, or a day on which banks in Florida or Nevada are authorized or required by law to close.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) **"Closing Date"** means the date on which the Closing occurs as provided in Section

&nbsp;&nbsp;&nbsp;&nbsp;1.2. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) **"Governmental Entity"** means any supra-national, national, state, municipal, or

local government (including any subdivision, court, administrative agency, competent authority, notified body, commission, or other authority thereof) or any quasi-govermnental body exercising any regulatory, taxing, importing, or other govermnental or quasi-govermnental authority.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t) **"Knowledge"** means, with respect to Sellers, (i) the actual knowledge of Charles

&nbsp;&nbsp;&nbsp;&nbsp;R. Abele, Jr. and Peter Jago, and **(ii)** what any of such named individuals would be reasonably expected to know upon the exercise of reasonable inquiry of the management members of the Company who would

customarily have knowledge of the matter at issue and, with respect to Buyer, (i) the actual knowledge of the senior management personnel of Buyer and (ii) what such personnel would be reasonably expected to know upon the exercise of reasonable due inquiry.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) **"Material Adverse Effect"** shall mean (a) a material adverse effect on the financial condition, properties, business, or results of operations of the Company or Buyer, as applicable, taken as a whole, or (b) a material adverse effect on the ability of the Company or Buyer to perform its respective material obligations under this Agreement; provided, however, that a Material Adverse Effect shall not include any event, change, effect, development, condition, or occurrence arising out of or relating to (i) general economic or political conditions in the United States of America, or general regulatory, financial, banking, credit or securities market conditions, including any disruption thereof and any interest or exchange rate fluctuations, (ii) conditions generally applicable to the industry in which the Company operates, (iii) the announcement of this Agreement or the transactions contemplated hereby <u>(provided,</u> that any such announcement made by a Seller or the Company is made in accordance with the terms of this Agreement), (iv) resulting from any changes in applicable Laws or accounting rules or interpretations thereof, (v) resulting from natural disasters, acts ofterrorism or war (whether or not declared), or epidemics or pandemics or (vi) arising out of any action taken or omitted to be taken at the written request of Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) **"Permitted Liens"** means (a) Liens for Taxes, fees, assessments and other charges ofGovernmental Entities not due and payable as ofthe Closing Date, which remain payable without penalty as ofthe Closing Date, or which are being contested in good faith by appropriate proceedings and for which adequate reserves are established in the Financial Statements (or, if arising after the date of the Financial Statements, the relevant financial records of the Company and its Subsidiaries made available to Buyer prior to the Closing Date), (b) materialmens', mechanics', workmens', landlords', repairmens', warehousemen', carriers' and other similar Liens arising or incurred in the ordinary course of business or by operation of Law, in each case, if the underlying obligations are not delinquent or are being challenged in good faith pursuant to appropriate proceedings and for which adequate reserves are established in the Financial Statements (or, if arising after the date of the Financial Statements, the relevant financial records ofthe Company and its Subsidiaries made available to Buyer prior to the Closing Date), (c) statutory Liens for landlords for amounts which are not yet due and payable, (d) rights, easements, covenants, conditions, restrictions and other similar matters of record affecting title to the Leased Real Property which do not or would not materially impair the use or occupancy of the Leased Real Property in connection with the operation of the business conducted thereon, (e) Liens consisting of pledges or deposits required in the ordinary course of business in connection with workers' compensation, unemployment insurance and other social security legislation or to secure liability to insurance carriers, (f) Liens on any property acquired or held by the Company or any of its Subsidiaries, securing indebtedness incurred or assumed by a party for the purpose of financing (or refinancing) all or any part of the cost of the Company's or any of its Subsidiaries' acquisition of property, which indebtedness is recorded on the Financial Statements (or, if arising after the date of the Financial Statements, the relevant financial records of the Company and its Subsidiaries made available to Buyer prior to the Closing Date), (g) any interest or title of a lessor or sublessor, as lessor or sublessor, under any lease and any precautionary uniform commercial code financing statements filed under any lease, and (h) non-monetary imperfections of title which are not material in character, amount or extent and which do not materially detract from the use, occupancy or value of, or materially interfere with the Company's or its applicable Subsidiary's present, or their prospective, use of the assets subject thereto or affected thereby, Liens disclosed on the face of the Financial Statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) **"Person"** means any individual, corporation, company, partnership, trust, incorporated or unincorporated association, joint venture, or other entity of any kind.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) **"Pro-Rata Portion"** means, with respect to any Seller, a fraction, expressed as a percentage, the numerator of which is the portion of the Purchase Price allocable to such Seller, and the

denominator of which is the sum of the Purchase Price, as set forth in the Allocation Schedule under the heading "Pro-Rata Portion." For the avoidance of doubt, the sum of the respective Pro-Rata Portions of all of the Sellers shall be equal to 100%.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) **"Transaction Documents"** means this Agreement and all other agreements, instruments, and documents to be executed and delivered by the Company, Sellers, or Buyer in connection with the transactions contemplated hereby.

**ARTICLE 2**

**SALE AND PURCHASE OF MEMBERSHIP INTERESTS; CLOSING.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.1** **<u>Sale and Purchase.</u>** On the Closing Date (as hereinafter defined), Sellers shall sell to Buyer, and Buyer shall purchase from Sellers, the Membership Interests for the Purchase Price (as defined in Section 2.3).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.2** **<u>Closing Date.</u>** The consummation of the transactions contemplated hereby (the **"Closing")** will take place at the offices of the Company at 10:00 AM local time on the date hereof or such other date and time that is agreed to in writing by the Company and Buyer (the **"Closing Date"),** provided that all conditions set forth in Article 6 have either been satisfied or, in the case of conditions not satisfied, waived in writing by the party entitled to the benefit of such conditions. The Closing may be conducted remotely by electronic exchange of documents and signatures. At the Closing, Sellers shall deliver, or cause to be delivered, to Buyer or its designees an membership interest transfer powers transferring to Buyer good title to the Membership Interests, free and clear of any liens, pledges, options, security interests, trusts, encumbrances, or other rights or interests of any person or entity, and Sellers shall be responsible for any transfer, documentary, or similar taxes attributable to such transfer ofthe Membership Interests, and Buyer shall thereupon pay to Sellers the Purchase Price.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.3** **<u>Purchase Price.</u>** The Purchase Price shall be payable on a pro rata basis to the Sellers as follows: 24,407,895 shares of common stock in Buyer valued by the parties at $0.76 per share the **"Equity** **Consideration").** The Buyer and Sellers mutually agree that the value for the shares of Buyer shall be as stated above. The parties acknowledge and agree that this price is determined solely by their mutual consent and is not based on any formal valuation, appraisal, or independent assessment of Buyer's financial condition, market value, or other economic factors. The parties further agree that they have independently evaluated the transaction and are not relying on any representations or warranties regarding the value of the shares beyond their mutual agreement as set forth herein. At Closing, Buyer shall deliver the Purchase Price in the form of stock certificates or book-entry shares, as applicable, registered in the names of the Sellers in the proportions set forth on Schedule I. Any unpaid interest or management fees due for the month of June, 2025, will be issued in common shares pro rata upon closing valued at $0.76 per share.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4 <u>Adjustments to the Purchase Price.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Within thirty (30) days following the closing of this transaction, Buyer and Seller will agree on the selection of and engagement of a qualified appraiser to establish the market value of the election of the Property and the Business to confirm that the price is supported by the market. IF the appraiser determines that the value is less than the Purchase Price then Buyer may adjust the Purchase Price by an amount not to exceed the number of shares held in escrow pursuant to paragraph 2.6 below. In the event the parties cannot agree on and engage an appraiser within said thirty (30) day period then each party will engage an appraiser of their election and within sixty (60) the appraiser will agree on the value or the parties will utilize the average of the two appraisals as the agreed market value for purposes of this paragraph.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Within thirty (30) days following the closing of this transaction, Buyer and Seller will each engage certified public accounting firms to investigate the requirement of Buyer to covert any portion o f the Purchase Price to goodwill and write same off within a one year period. The CPA's will reach a consensus or they will jointly select the third and that CPA's opinion will control. If the final opinion is that there is a required goodwill write off within a one year period then Buyer shall receive a credit to the Purchase Price up to a maximum credit of $4,017,858 via stock in the Escrow per 2.6 below and not to exceed the stock held in that Escrow.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.5** **<u>Required Cash.</u>** The Business shall have cash as of the Closing Date (the **"Closing Date** **Cash")** in an amount equal to or greater than $100,000 (the **"Required Cash Amount").** On or before thirty (30) days following the Closing Date, the Purchase Price shall be either (a) increased in the amount by which the Closing Date Cash exceeds the Required Cash Amount, if any, or (b) decreased in the amount by which the Closing Date Cash is less than the Required Cash Amount, if any, with such adjustment payable in cash (or, at the election of Seller's Representative, as Equity Consideration) to Buyer or Sellers, as the case may be. The Closing Date Cash shall include escrowed sums.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.6** **<u>Escrow.</u>** To secure potential adjustments or indemnification obligations under Article 7, Buyer shall withhold 10% of the shares comprising the Purchase Price (the **"Escrow Shares"),** and within fifteen (15) days from the Closing Date, shall deposit them with an escrow agent mutually agreed by the parties pursuant to an escrow agreement. The Escrow Shares shall be held for 12 months following the Closing Date, subject to release or distribution as provided in the escrow agreement (the **"Escrow Agreement")**and Article 7.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.7 <u>**Deliveries at Closing by Sellers and the Company.**</u> At the Closing, and upon satisfaction or waiver of the conditions set forth in Sections 6.1 and 6.3, each of the Sellers and the Company will deliver or cause to be delivered the instruments, consents, certificates, and other documents required of each of them by Section 6.2.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.8** **<u>Deliveries at Closing by Buyer.</u>** At the Closing, and upon satisfaction or waiver of the conditions set forth in Sections 6.1 and 6.2, Buyer will deliver or cause to be delivered the instruments, consents, certificates, and other documents required of it by Section 6.3.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.9** **<u>Allocation Schedule.</u>** Each Seller hereby acknowledges and agrees that (i) the Allocation Schedule is complete and accurate in all respects and shall govern the allocation among the Sellers (and shall not serve as a limitation as to Buyer's rights under this Agreement) of all payments to or from the Sellers that are contemplated by this Agreement in accordance with the priorities set forth in the Operating Agreement (as in effect on the date of this Agreement), (ii) the amounts set forth in the Allocation Schedule for distribution to such Seller are in compliance with the Operating Agreement, (iii) the consideration payable to such Seller as set forth in the Allocation Schedule constitutes all consideration payable to such Seller in connection with the consummation of the Transaction and (iv) after the Closing, such Seller (and any direct or indirect holder of Membership Interests of such Seller) will have no right, title or interest in or to any other payment in consideration of the Membership Interests, Buyer or any of their respective Affiliates. The Company and the Sellers acknowledge and agree that to the extent any allocation of payments provided for in this <u>Section 2.8</u> or in the Allocation Schedule is inconsistent with the Operating Agreement, then this Agreement, together with the Allocation Schedule, shall be deemed to be an amendment to the Operating Agreement, properly authorized and adopted pursuant to the provisions of the Operating Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.10** **<u>Consent to Transactions.</u>** Each Seller and the Company hereby consent to the transfers of the equity interests of the Company contemplated herein and the payment of the other amounts contemplated herein in compliance with the terms of this Agreement and the other Transaction Documents, and irrevocably waive any Liens or restrictions on transfer arising under the Operating Agreement in favor of such Person relating to their equity securities of the Company or its Subsidiaries and any other rights such Person may have arising from or relating to such transfers (including any rights of first refusal, co- sale or similar rights and any rights to receive notices, opinions or similar documentation in advance of or in connection with such transfers or contributions) or such payments, whether arising pursuant to the Operating Agreement, any other Organizational Documents of the Company or any of its Subsidiaries, any agreement pursuant to which any such equity securities were issued or pursuant to applicable Law; provided, that this waiver shall not affect any rights any such party may have against the other Parties under this Agreement or under any other Transaction Documents.

**ARTICLE 3**

**REPRESENTATIONS AND WARRANTIES OF SELLERS.**

References in this Article 3 to "Sellers' Knowledge" are as defined in Section I. Except as set forth in the Disclosure Schedules, which shall disclose exceptions to the representations and warranties organized according to the corresponding sections of this Agreement, the Sellers jointly and severally (except with respect to Section 3.23, as to which section each Seller represents and warrants severally in his, her, or its individual capacity) represent and warrant to Buyer that as of the date hereof:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1 <u>Organization and Good Standing.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company is a limited liability company duly organized, validly existing, and in good standing under the laws of the State of Florida, with full limited liability company power and authority to carry on the Business as it is now and has since its organization been conducted, and to own, lease, or operate its assets and properties. The Company is duly qualified to do business and is in good standing in every jurisdiction in which the character ofthe properties owned or leased by it or the nature of the business conducted by it makes such qualification necessary, except where failure to be so qualified would not have a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Aside from Block 40, LLC and Block 40 Property, LLC, the Company has no subsidiaries and does not otherwise hold any equity, membership, partnership, joint venture, or other ownership interest in any Person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Company has made available to Buyer a true and correct copy of the articles of organization and operating agreement of the Company, each as amended to date (collectively, the **"Charter Docnments").** The Company is not in material violation of any of the provisions of its Charter Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2 <u>Ownership of Membership Interests.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Sellers own all of the outstanding membership interests of the Company (the **"Membership Interests")** in the respective amounts set forth on Schedule I, free and clear of all liens, encumbrances, security interests, pledges, conditional or installment sale agreements, mortgages, charges, and/or any other claim of third parties of any kind (collectively **"Liens").** The Membership Interests constitute 100% ofthe issued and outstanding membership interests in the Company. After giving effect to the transactions contemplated by this Agreement, Buyer will own 100% of the Membership Interests. All of the Membership Interests have been, and will be at the Closing, duly authorized, validly issued and outstanding, and fully paid. None of the Sellers has granted, issued, or agreed to grant or issue and/or will grant, issue, or agree to grant or issue any other equity interest in the Company and there are no, nor will there be at the Closing, outstanding options, warrants, subscription rights, securities that are convertible into or exchangeable for, or any other commitments of any character relating to, any equity interest in the Company (collectively **"Equity Rights").** No Membership Interests are, or will be at the Closing, subject to any right of first refusal, preemptive, subscription, or other similar right under any provision of Applicable Law or any agreement (collectively **"Preemptive Rights").** There are no voting restrictions or restrictions on transfer ofthe Membership Interests (collectively **"Restrictions").**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) There are no obligations, contingent or otherwise, ofthe Company to repurchase, redeem, or otherwise acquire any of the Membership Interests or to make any investment (in the form of a

loan, capital contribution, or otherwise) in any Person. The Company does not own or control any equity security or other interest of any other Person. The Company is not a party to any agreement (i) requiring it to acquire any securities or ownership interests in any Person; and/or (ii) requiring it to make any investment in and/or to fund in any manner any Person. Since its inception, the Company has not consolidated or merged with, acquired all or substantially all of the assets of, or acquired the stock of or any interest in any Person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Upon consummation of the transactions contemplated hereby at the Closing, Buyer will own the Membership Interests free and clear of all Liens, Equity Rights, Preemptive Rights, and/or Restrictions, except any made by Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.3** **<u>Authorization of Agreement.</u>** The Company has all requisite limited liability company power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. This Agreement and all other agreements and instruments to be executed by the Company in connection herewith (as defined in Section 1) have been duly and validly approved by the Managers and the members of the Company (the **"Authorizing Parties")** and no other proceedings on the part of the Company or Sellers is necessary to approve this Agreement and to consummate the transactions contemplated hereby or thereby. This Agreement and the other Transaction Documents to be delivered by the Company have been (or upon execution will have been) duly executed and delivered by the Company, have been effectively authorized by all necessary action, corporate or otherwise, and assuming the assuming the due authorization, execution and delivery of each such Transaction Document by each of the other parties thereto, constitute (or upon execution will constitute) legal, valid, and binding obligations of the Company, enforceable in accordance with their respective terms, except as such enforceability may be limited by general principles of equity and bankruptcy, insolvency, and other similar laws relating to creditors' rights (the **"Bankruptcy Exception").**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.4** **<u>Title to Assets.</u>** The Company is the lawful owner of each of the tangible assets, whether real, personal, mixed, comprising and employed in the operation of or associated with the Business, other than those Assets which the Company leases, in which case the Company has a valid leasehold interest in such Assets. The Assets owned and/or leased by the Company (collectively the **"Assets")** include all of the properties and other assets necessary for the Company to conduct the Business in the manner presently conducted and as currently contemplated to be conducted. The Assets are free and clear of all liens, mortgages, pledges, security interests, restrictions, prior assignments, encumbrances, and claims of any kind, except for Permitted Liens. There are no outstanding agreements, options, or commitments of any nature obligating the Company to transfer any of the Assets or rights or interests therein to any party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.5 <u>Financial Condition and Accounting.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>**Financial Statements.**</u> The Buyer is in possession of the balance sheet of the Company, as of December 31, 2024, and the related statements of income and cash flows for two years ended December 31, 2024 and 2023 and the same financial statements for the interim period ended March 31, 2025 (collectively, the **"Financial Statements").** The Financial Statements present fairly the financial condition and position and operating results of the Company as of the respective dates thereof and for the periods therein indicated.

The Financial Statements reflect the consistent application of accounting principles throughout the periods incurred. The Financial Statements (i) were prepared in accordance with the books and records of the Company; and (ii) were prepared in accordance with generally accepted accounting principles **("GAAP")** consistently applied. The books and records of the Company are being maintained in accordance with applicable legal and accounting requirements in all material respects and as necessary to permit the preparation of financial statements in accordance with GAAP and to maintain asset accountability. To Sellers' Knowledge, the Financial Statements do not omit any material liabilities, contingent or otherwise, not reflected or reserved against therein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>**Absence of Certain Changes.**</u> Since March 31, 2025, there has not been (i) any material change in the assets, liabilities, financial condition, or operations of the Company, other than changes in the ordinary course of business; (ii) any declaration, setting aside, or payment of any dividend or distribution in respect of the Membership Interests; (iii) any sale, lease, or disposition of any material Asset outside the ordinary course of business; (iv) any material reduction in workforce or termination of key employees; or (v) any event, circumstance, condition, development, or occurrence causing, resulting in, having, or that would reasonably be expected to have, a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.6 <u>Property.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>**Real Property.**</u> The Company owns all of the real property (the **"Owned Real** **Property")** or leases and has a good and valid and enforceable leasehold interest in all the real property (the **"Leased Real Property")** described in Schedule 3.6, in each case free and clear of all liens, except for Permitted Liens and as stated in Schedule 3.6, and Schedule 3.6 sets forth the address of each parcel of Owned Real Property and Leased Real Property.

Seller has made available to Buyers a true, accurate, and complete list of all leases, subleases, licenses, easements, rights of way, waivers ofmineral owners, mineral deeds, and all (i) waivers of either surface or subsurface interests or both, (ii) pipeline easements and rights-of-way, and (iii) access agreements, and all similar material agreements used by the Company in the conduct of the Business (collectively, the **"Real Property Agreements").**

With respect to the Real Property Agreements: (i) each Real Property Agreement is in full force and effect according to its terms; (ii) the Company is not in material default or breach and, to the Knowledge of Seller, no other party thereto is in material default or breach under any Real Property Agreement; (iii) there are no material claims affecting any such Real Property Agreement, and, to the Knowledge of Seller, no party has given written notice to the Company of such party's intent to terminate any Real Property Agreement; (iv) to the Knowledge of Seller, no event has occurred which, with or without the giving of notice or lapse of time, is reasonably likely to result in a violation or breach of, or give any Person the right to exercise any remedy under, or cancel, terminate, or modify, any Real Property Agreement; (v) except as provided in Schedule 3.6, no Real Property Agreement requires any Third-Party Approval in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby; (vi) as of the Closing Date, all rents, royalties, shut-in royalties, and other payments then due and payable by the Company under any Real Property Agreement have been paid in full through the Closing Date or reflected in Schedule 3.6; and (vii) the Company has made available to Buyers true and correct copies of all of the Real Property Agreements.

The Company's interest in the Real Property Agreements and, to the Company's Knowledge, the real property interests which are the subject thereof, are free and clear of all liens except as stated in Schedule 3.6, created or existing pursuant to the Real Property Agreements.

Since January 1, 2020, the Company has not received any written notice that there has been any material violation of any building, zoning, or other Law in respect of such buildings, structures, and other improvements with respect to the Real Property. There are no pending, or, to Seller's Knowledge, threatened, condemnation proceedings with respect to the Real Property. To Sellers' Knowledge, there are no environmental hazards, contaminants, or violations of environmental laws affecting the Owned Real Property or Leased Real Property that would materially impair the Business.

The Owned Real Property, the Leased Real Property, and any property otherwise subject to a Real Property Agreement, in each case, identified in Schedule 3.6, comprise all of the real property interests (whether leased, owned, or permitted pursuant to a Real Property Agreement) of the Company used in or intended to be used in, or otherwise related to the conduct of the Business as of the Closing.

To Sellers' Knowledge, all buildings, structures, improvements, fixtures, building systems and equipment, and all components thereof included in the Leased Real Property and the Owned Real Property are in good condition and repair in all material respects, free of any structural deficiencies or latent defects, and sufficient for the operation of the Business as it is conducted of the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>**Personal Property.**</u> **"Personal Property"** means all tangible personal property owned or leased by the Company, including equipment, vehicles, furniture, and fixtures used in the Business. All of the Personal Property has been maintained in accordance with the past practice of the Company and generally accepted industry practice and is in good operating condition and repair (normal wear and tear excepted) sufficient to enable the Company to operate the Business as presently conducted and as currently contemplated to be conducted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.7 <u>Intellectual</u> <u>Property.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Schedule 3.7 sets forth a true and complete list of all (a) patents and patent applications, trademark registrations and trademark applications, registered copyrights and copyright applications and domain names that are owned by the Company, and (b) licenses or sublicenses of Intellectual Property to the Company, and licenses and sublicenses of Intellectual Property by the Company to any third party (collectively **"Licensed Intellectual Property"). "Owned Intellectual Property"** means the Intellectual Property listed on Schedule 3.7 and all other Intellectual Property owned by the Company. For purposes hereof, **"Intellectual Property"** means: (i) United States, international, and foreign patents, patent applications and statutory invention registrations, (ii) patentable inventions, discoveries, improvements, ideas, know-how, formula, methodology, processes and technology, (iii) trademarks, service marks, trade names, trade dress, slogans, logos, domain names, and other source identifiers, including registrations and applications for registration thereof, (iv) original works of authorship, copyrightable subject matter, and copyrights, including copyright registrations and/or applications for copyright registration, (v) confidential and/or proprietary information, including trade secrets and/or know- how embodied in any invention, work of authorship, customer list, database, business information, and/or Software, and (vi) inventions, extensions, modifications, or enhancements of the Software or related to the Software. For purposes hereof, **"Software"** means all computer software developed by or on behalf of the Company, or used by the Company, including all computer software in any form (such as, source code, object code, assembler code, microcode, etc.), libraries, user-interfaces (including graphical user-interfaces, application programming interfaces (APls), and other software interfaces), and databases operated by the Company or used by the Company in any way, including use in internal Company operations, testing (including alpha and beta tests), licensing, marketing, sales, and/or in connection with processing customer orders, storing customer information, or storing and archiving data.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) To Sellers' Knowledge, the use of the Owned Intellectual Property and the Licensed Intellectual Property by the Company in the ordinary course of business as currently conducted and as currently contemplated to be conducted does not conflict with or infringe upon, violate or misappropriate the Intellectual Property rights of any third party. Since January 31, 2020, no claim has been asserted in writing that the use ofsuch Intellectual Property in the ordinary course of business does or may conflict with or infringe upon, violate or misappropriate the Intellectual Property rights of any third party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Except with respect to Open Source Materials (as defined in clause (d) below) disclosed in Schedule 3.7, the Company is the exclusive owner of the entire and unencumbered right, title

and interest in each item of Owned Intellectual Property in the United States, and to Sellers' Knowledge the Company is entitled to use all such Owned Intellectual Property in the ordinary course of business in the United States and worldwide, subject only to the terms of the licenses of the Owned Intellectual Property granted by the Company to its customers in the ordinary course of business. The Company has the right to use each item of Licensed Intellectual Property as provided in the license agreements therefor, and to Sellers' Knowledge the Company is entitled to use all such Licensed Intellectual Property in the ordinary course of business as currently conducted and as currently contemplated to be conducted, subject only to the terms of the licenses of the Licensed Intellectual Property granted by the licensors thereof. True and complete copies of all agreements and documents with respect to the Licensed Intellectual Property and the Owned Intellectual Property have been made available to Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) **"Open Source Materials"** means materials (i) subject to any license that requires as a condition of use, modification and/or distribution thereof, that such materials, or materials combined and/or distributed with such materials be (A) disclosed or distributed in source code or similar form, (B) licensed for the purpose of making derivative works, or (C) redistributable at no charge or (ii) subject to any license or right that the Open Source Initiative has recognized or approved as an open source license. Except as disclosed in Schedule 3.7, the Company has not (a) incorporated Open Source Materials into, or combined Open Source Materials with, the Company's products or any Intellectual Property owned or used by the Company, (b) distributed Open Source Materials in conjunction with the Company's products or any Intellectual Property owned or used by the Company, or (c) used Open Source Materials in a manner that would make the Company's products or any Intellectual Property owned or used by the Company, or any part thereof, Open Source Materials.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The Owned Intellectual Property and the Licensed Intellectual Property include all of the Intellectual Property and Software used in the Business and the ordinary day-to-day operations of the Company, and there are no other items of lntellectual Property or Software that are material to the Business and/or such ordinary day-to-day operations. The Owned Intellectual Property and, to Seller's Knowledge, any Intellectual Property licensed to the Company under the Licensed Intellectual Property, is (i) to Seller's Knowledge, subsisting, valid and enforceable, and (ii) has not been adjudged invalid or unenforceable in whole or part.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t) Since January 1, 2020, no legal proceedings have been asserted in writing, are pending, or, to Sellers' Knowledge, threatened against the Company (i) based upon or challenging or seeking to deny or restrict the use by the Company of any of the Owned Intellectual Property or Licensed Intellectual Property, (ii) alleging that any services provided by, processes used by, or products manufactured or sold by the Company infringe upon or misappropriate any Intellectual Property right of any third party, or (iii) alleging that any Intellectual Property licensed under the Licensed Intellectual Property infringes upon any Intellectual Property right of any third party or is being licensed or sublicensed in conflict with the terms of any license or other agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) To Sellers' Knowledge, no person is engaging in any activity that infringes upon the Owned Intellectual Property or any Intellectual Property licensed to the Company under the Licensed Intellectual Property. Except as set forth in Schedule 3.7, the Company has not granted any license or other right to any third party with respect to the Owned Intellectual Property or Licensed Intellectual Property. The consummation of the transactions contemplated by this Agreement will not result in the termination, cancellation and/or impairment of any of the Owned Intellectual Property and/or the Licensed Intellectual Property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Correct and complete copies of all the licenses and sublicenses of the Licensed Intellectual Property to which the Company is a party have been made available to Buyer. With respect to each such license and sublicense: (i) such license and sublicense is valid and binding and in full force and

effect and represents the entire agreement between the respective licensor and licensee with respect to the subject matter of such license or sublicense; **(ii)** such license or sublicense will not cease to be valid and binding and in full force and effect on terms identical to those currently in effect as a result of the consummation of the transactions contemplated by this Agreement, nor will the consummation of the transactions contemplated by this Agreement constitute a breach or default under such license or sublicense or otherwise give the licensor or sub licensor a right to terminate such license or sublicense; (iii) since January 1, 2020, the Company has not (x) received any notice of termination or cancellation under such license or sublicense; (y) received any notice of a breach or default under such license or sublicense, which breach has not been cured, nor (z) granted to any other third party any rights, adverse or otherwise, under such license or sublicense that would constitute a breach of such license or sub license; and (iv) neither the Company, nor, to Sellers' Knowledge, any other party to such license or sublicense is in breach or default in any material respect, and, to the Sellers' Knowledge, since January I, 2020, no event has occurred that, with notice or lapse of time would constitute such a breach or default or permit termination, modification or acceleration under such license or sublicense.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) To Sellers' Knowledge, the Software is free of all viruses, worms, Trojan horses and other material known contaminants, and does not contain any problems of a material nature or have an adverse impact on the operation of other software programs or operating systems, and no rights in the Software have been transferred to any third party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;U) The Company has taken reasonable steps in accordance with normal industry practice to maintain the confidentiality of its customer lists and customer information, trade secrets, source code and other confidential Intellectual Property. To Sellers' Knowledge since January I, 2020, (i) there has been no misappropriation of any material trade secrets or other material confidential Intellectual Property of the Company by any Person, (ii) no employee, independent contractor or agent of the Company has misappropriated any trade secrets of any other Person in the course of such performance as an employee, independent contractor or agent and (iii) no employee, independent contractor or agent of the Company is in default or breach of any term of any employment agreement, non-disclosure agreement, assignment of invention agreement or similar agreement or contract relating in any way to the protection, ownership, development, use or transfer of Intellectual Property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) No current and former employee, director, and/or officer of the Company has any rights whatsoever to any of the Owned Intellectual Property and/or the Licensed Intellectual Property. Neither the Sellers nor the Company believes it is or will be necessary to utilize any inventions, trade secrets or proprietary information of any of its employees made prior to their employment by the Company, except for inventions, trade secrets or proprietary information that have been assigned to the Company.

**3,8 <u>No Conflict or Violation.</u>** The execution, delivery, and performance by Sellers and the Company of this Agreement and the other Transaction Documents to be delivered by Sellers and/or the Company and the consummation of the transactions contemplated hereby and thereby do not and will not (with or without notice or passage of time): (i) violate or conflict with any provision of the Charter Documents; (ii) violate any provision or requirement of any domestic or foreign, federal, state, or local law, statute, judgment, order, writ, injunction, decree, award, rule, or regulation of any Governmental Entity applicable to the Company and/or the Business; (iii) violate, result in a breach of, constitute (with due notice or lapse of time or both) a default or cause any obligation, penalty, premium, or right of termination to arise or accrue under any Intellectual Property licenses or agreements and/or any Contract (as hereinafter defined in Section 3.9); (iv) result in the creation or imposition of any Lien of any kind whatsoever upon any of the Membership Interests and/or Assets of the Company or the Business; or (v) result in the cancellation, modification, revocation, or suspension of any material license, permit, certificate, franchise, authorization, or approval issued or granted by any Governmental Entity (each a **"License,"** and collectively, the

**"Licenses"),** except, in the case of clauses (ii) through (v) of this <u>Section 3.8,</u> for any such conflicts, defaults or violations that would not reasonably be expected to be individually or in the aggregate, materially adverse to the Company and its Subsidiaries, taken as a whole.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.9 <u>Consents.</u>** Schedule 3.9 lists all consents and notices required to be obtained or given by or on behalf of Sellers and/or the Company in connection with the consummation of the transactions contemplated by this Agreement and the Transaction Documents in compliance with all Applicable Laws, rules, regulations, or orders of any Governmental Entity, the provisions of any material Contract and/or any Intellectual Property license or agreement, except where the failure to obtain such consent will not have a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.10 <u>Labor and Employment Matters.</u>** There are no employment agreements, collective bargaining agreements, or other labor agreements to which the Company is a party or by which it is bound. The Company has complied in all material respects with all applicable federal, state, and local laws, rules, and regulations relating to employment, including wage and hour laws, discrimination, occupational safety (e.g., OSHA), and workers' compensation. Schedule 3.10 lists all employee benefit plans (e.g., pension, 40l(k), health, or welfare plans) sponsored or maintained by the Company, and such plans are in compliance with Applicable Laws, including ERISA, and have no underfunding or termination liabilities. There are no pending or, to Sellers' Knowledge, threatened labor disputes, strikes, or unionization efforts involving the Company's employees.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.11 <u>Litigation.</u>** Except as set forth on Schedule 3.11, there are no claims, actions, suits, or proceedings of any nature **("Actions")** pending or, to Sellers' Knowledge, threatened by or against the Company, the managers, or members of the Company, or any of their respective Affiliates, including without limitation those involving, affecting, or relating to (i) the Business, any Assets, properties, prospects, and/or operations of the Company, (ii) any Contracts, (iii) any Owned Intellectual Property, (iv) any Licensed Intellectual Property, and/or (v) the transactions contemplated by this Agreement (collectively **"Claims").** For purposes of this Agreement, **"Affiliate"** is as defined in Section I. The Company is not a party or subject to the provisions of any order, writ, injunction, judgment, or decree of any court or Governmental Entity. To Sellers' Knowledge, no Governmental Entity is currently investigating or planning to investigate the Company. There is no action, suit, proceeding, or investigation by the Company currently pending against any third party or which the Company intends to initiate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.12 <u>Certain Agreements.</u>** (a) True and complete copies of all Contracts have been made available to Buyer, or will be made available to Buyer within 14 days of Closing. There are no renegotiations of, attempts to renegotiate, or outstanding rights to renegotiate any material amounts payable by or to the Company under any Contract and to Sellers' Knowledge and the Company, no oral or written demand for such renegotiation has been made. (b) Each Contract is valid, binding, and enforceable against the Company in accordance with its terms, except as such enforceability may be limited by the Bankruptcy Exception, and is in full force and effect on the date hereof. Upon consummation of the transactions contemplated by this Agreement, each Contract shall continue to be valid, binding, enforceable, and in full force and effect without penalty or other adverse consequence. Since January I, 2020, the Company has performed all material obligations required to be performed by it under, and is not in material default or breach of, any Contract, and no event has occurred which, with due notice or lapse of time or both, would constitute such a material default or breach by the Company. (c) To Sellers' Knowledge, no other party to any Contract is in default or breach in respect thereof, and no event has occurred which, with due notice or lapse oftime or both, would constitute such a default or breach.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.13 <u>Compliance with Applicable Law; Permits.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Since January I, 2020, the Company has complied with all laws, rules, statutes, ordinances, regulations, and requirements of all Governmental Entities **("Applicable Laws")** in all material respects. The Company is not in violation of any Applicable Law that would result in a Material Adverse Effect. The Business and the operations of the Company are being conducted in all material respects in accordance with all Applicable Laws of all Governmental Entities having jurisdiction over the Company or its Assets, properties, or operations, including, without limitation, all such Applicable Laws, orders, and requirements relating to the Business except in any case where the failure to so conduct its operations would not have a Material Adverse Effect. Since January I, 2020, the Company has not received any written notice of any violation of any Applicable Law, order, or other legal requirement. The Company is not in default with respect to any order, writ, judgment, award, injunction, or decree of any Governmental Entity, applicable to the Company, the Business, and/or any of its Assets, properties, or operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Company holds all licenses, permits, easements, variances, exemptions, consents, certificates, orders, approvals, franchises, and other authorizations (collectively, the **"Operating** **Permits")** and has taken all actions required by Applicable Law or regulations of any Governmental Entity in connection with the Business as now conducted, except where the failure to obtain any such Operating Permits or to take any such action, individually or in the aggregate, does not and would not reasonably be expected to have a Material Adverse Effect. Since January I, 2020, no Governmental Entity has issued any notification in writing stating that the Company is not in compliance with any Operating Permit. Schedule 3.l(b) lists all material Operating Permits held by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.14 <u>Licenses.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Schedule 3.14 lists all Licenses issued or granted to the Company. The Licenses constitute all Licenses required, and consents, approvals, authorizations, and other requirements prescribed, by any law, rule, or regulation which must be obtained or satisfied by the Company, in connection with the Business or that are necessary for the execution, delivery, and performance by the Company of this Agreement and the other Transaction Documents. The Licenses are sufficient and adequate in all material respects to permit the continued lawful conduct of the Business in the manner now conducted and as currently contemplated to be conducted and the ownership, occupancy, and operation of the Company's properties and the execution, delivery, and performance of this Agreement. No jurisdiction in which the Company is not qualified or licensed as a foreign business entity has demanded or requested in writing that it qualify or become licensed as a foreign business entity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Each License has been issued to, and duly obtained and fully paid for and is valid, in full force and effect, enforceable in accordance with its terms subject to the Bankruptcy Exception, and not subject to any pending or known threatened administrative or judicial proceeding to suspend, revoke, cancel, or declare such License invalid in any respect. The Company is not in violation in any material respect of any of the Licenses. The Licenses have never been suspended, revoked, or otherwise terminated, subject to any fine or penalty, or subject to judicial or administrative review, for any reason other than the renewal or expiration thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.15 <u>Intercompany and Affiliate Transactions; Insider Interests.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Other than agreements disclosed on Schedule 3.15, there are no contracts, transactions, agreements, or arrangements, written or oral, of any kind, direct or indirect, between the Company and (a) any of the Sellers, (b) any manager, member, or officer of the Company, and/or (c) any Affiliate and/or any immediate family member of any of the foregoing persons. All of the foregoing contracts, transactions, agreements, and arrangements are referred to as the **"Related Party Agreements."** The Related Party Agreements include, without limitation, loans, guarantees, and/or pledges to, by, or for the Company as well as those from, to, by, or for any of the foregoing persons, which are currently in effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) (i) none of the Sellers, (ii) no manager, member, or officer of the Company, and

&nbsp;&nbsp;&nbsp;&nbsp;(iii) no Affiliate and/or any immediate family member of any of the foregoing persons, now has, or within the last three (3) years had, either directly or indirectly:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) an equity or debt interest in any corporation, partnership, joint venture, association, organization, or other Person or entity which furnishes, sells supplies, or during such period furnished, sold, or supplied, services or products to the Company, or purchased, or during such period purchased from the Company, any goods or services, or otherwise does, or during such period did, business with the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) a beneficial interest in any Contract, commitment, or agreement to which the Company is or was a party or under which it was obligated or bound or to which its properties may be or may have been subject;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) any rights in or to any of the Intellectual Property, Assets, properties, and/or rights owned or licensed by the Company and/or used by the Company in the Business, including, but not limited to, any rights as a secured party, lender, and/or debt holder;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D) the right to receive any payments of any kind from the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.16 <u>Insurance.</u>** Schedule 3.16 lists all insurance policies maintained by the Company, which are in full force and effect, provide adequate coverage for the Business, and have no pending claims or notices of cancellation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.17 <u>No Undisclosed Liabilities.</u>** Except as and to the extent (a) specifically reflected or reserved against in the most recent Financial Statements, (b) as incurred in the ordinary course of business since the date of the most recent Financial Statements, (c) arising under those contracts and agreements to which the Company is party as described in Schedule 3.12 (none of which results from, arises out of, relates to, is in the nature of, or was caused by any breach of contract, breach of warranty, tort, infringement, or violation oflaw), (d) incurred in connection with or arising out ofthe Transactions and (e) those which are not, individually or in the aggregate, material in amount, the Company has no material debt, liabilities, or obligations of any nature, whether absolute, accrued, contingent, or otherwise, and whether due or to become due (including, without limitation, any liability for taxes and interest, penalties, and other charges payable with respect to any such liability or obligation).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.18 <u>Taxes.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) For purposes of this Agreement, the following terms shall have the meanings specified below: **(i) "Tax" or "Taxes"** means all taxes, including, without limitation, all net income, gross receipts, sales, use, withholding, payroll, employment, social security, unemployment, excise, utility, property, and all other taxes applicable to the Company, plus applicable penalties and interest thereon. (ii) **"Tax Liabilities"** means all liabilities for Taxes. (iii) **"Tax Return"** shall mean all reports and returns required to be filed with respect to Taxes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Company was formed in June 2014 and has filed all Tax Returns. All Tax Returns filed by the Company are true, correct, and complete in all material respects, and all Taxes due and payable by the Company have been timely paid. The Company is not currently the subject of any audit,

examination, or other proceeding with respect to Taxes, and no such proceeding is threatened to Sellers' Knowledge.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>**Tax Sharing Agreements.**</u> The Company is not a party to any tax-sharing or tax- indemnity agreement and the Company has not otherwise assumed by contract or otherwise the Tax Liability of any other person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>**No Liens.**</u> None of the Assets of the Company are subject to any liens in respect of Taxes (other than for current Taxes not yet due and payable).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.19 <u>Environmental</u> <u>Matters.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company complies in all material respects with all Applicable Laws, regulations, and other requirements of Govermnental Entities or duties under common law relating to toxic or hazardous substances, wastes, pollution, or to the protection of health, safety, or the environment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) There are no pending or, to Sellers' Knowledge, threatened administrative, judicial, or regulatory proceedings, or, to Sellers' Knowledge, any threatened actions or claims, or any consent decrees or other agreements in effect that relate to environmental conditions in, on, under, about, or related to the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.20 <u>Brokers or Finders.</u> No agent, broker, finder, investment banker, financial advisor, or other person is entitled to any brokerage, finder's, or other fee or commission in connection with any of the transactions contemplated by this Agreement, based upon arrangements made by or on behalf ofthe Sellers **("Sellers' Broker Fees").** The Sellers shall be solely responsible for the payment of any and all Sellers' Broker Fees due any agent, broker, finder, investment banker, financial advisor, or other person in connection with the transactions contemplated by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.21 <u>Minute Books.</u>** The minute books of the Company made available to Buyer contain complete and accurate copies of all meetings of managers and members since the time of organization of the Company. All prior material corporate and company actions on behalf of the Company have been properly authorized and ratified by the officers, managers, and/or members of the Company in accordance with Applicable Laws and the Charter Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.22 <u>No Other Representations.</u>** Except for the representations and warranties contained in this <u>ARTICLE 3</u> and the Transaction Documents, neither the Company nor the Sellers makes any representation or warranty, express or implied, regarding the Company, its Subsidiaries or the Membership Interests.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.23 <u>Ownership of Membership Interests; Authorization of Agreement.</u>** Each Seller, severally and not jointly, makes the following representations and warranties to Buyer:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Such Seller owns the Membership Interests set forth opposite his, her, or its name in the respective amounts set forth on Schedule 1, free and clear of all Liens.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Such Seller has full legal right, power, and authority to enter into this Agreement and to sell and deliver the Membership Interests owned by him, her, or it in the manner provided herein. Such Seller has duly and validly executed this Agreement and has duly and validly executed and delivered all other agreements contemplated hereby, and each of this Agreement and such other agreements., assuming the assuming the due authorization, execution and delivery of each such Transaction Document by each of the other parties thereto, constitutes a valid, binding, and enforceable obligation of such Seller in accordance with its terms.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The execution, delivery, and performance of this Agreement and the other agreements contemplated hereby by such Seller, and the consummation of the transactions contemplated hereby or thereby, will not require, on the part of such Seller, any consent, approval, authorization, or other order of, or any filing with, any Governmental Entity, or under any contract, agreement, or commitment to which such Seller is a party or by which such Seller or its property is bound, and will not constitute a violation on the part of such Seller of any law, administrative regulation, or ruling or court decree, or any contract, agreement, or commitment, applicable to such Seller or its property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) With respect to Sellers that are not natural persons, this Agreement and all other agreements and instruments to be executed by such Seller in connection herewith have been duly and validly approved by the board of directors or other governing body of such Seller and no other proceedings on the part ofsuch Seller is necessary to approve this Agreement and to consummate the transactions contemplated hereby or thereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Securities Law Compliance. Such Seller is an accredited investor as defined in Rule 50l(a) of Regulation D under the Securities Act of 1933, as amended (the **"Securities Act"),** or has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of receiving Buyer's common stock as the Purchase Price. Such Seller understands that the shares of Buyer's common stock are restricted securities under the Securities Act and may not be resold absent registration or an exemption. Such Seller is acquiring the shares for investment purposes and not with a view to distribution.

**ARTICLE 4** 

**REPRESENTATIONS AND WARRANTIES OF BUYER.**

References in this Article 4 to Buyer's **"Knowledge"** are as defined in Section I. Buyer represents and warrants to the Sellers that as of the date hereof:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1 <u>Organization and Corporate Authority.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Buyer is a corporation duly organized, validly existing, and in good standing under the laws of the State ofNevada, with full corporate power and authority to carry on its business as it is now and has since its organization been conducted, and to own, lease, or operate its assets and properties. Buyer is duly qualified to do business and is in good standing in every jurisdiction in which the character of the properties owned or leased by it or the nature of the business conducted by it makes such qualification necessary, except where failure to be so qualified would not have a Material Adverse Effect with respect to Buyer and its operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Buyer has all requisite corporate power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. This Agreement and all other Transaction Documents have been duly executed and delivered by Buyer, have been effectively authorized by all necessary action, corporate or otherwise, and constitute (or upon execution will constitute) legal, valid, and binding obligations of Buyer, enforceable in accordance with their respective terms, except as such enforceability may be limited by the Bankruptcy Exception.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.2** **<u>OTC Filings.</u>** As of their respective dates, Buyer's filings with the OTC Markets (the **"OTC Documents")** were timely filed and complied in all material respects with the requirements applicable to Buyer's OTC Documents. Buyer's OTC Documents constitute all of the documents and reports that Buyer was required to file with OTC Markets. As of the time filed with the OTC Markets (or, if amended or superseded by a filing prior to the date of this Agreement, then on the date of such filing) none of Buyer's OTC Documents contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.3** **<u>No Conflict or Violation.</u>** The execution, delivery, and performance by Buyer of this Agreement and the other Transaction Documents to be executed and delivered by Buyer and the consummation of the transactions contemplated hereby and thereby, do not and will not: (i) violate or conflict with any provision of the organizational documents of Buyer; or (ii) to Buyer's Knowledge, violate in any material respect any provision or requirement of any domestic or foreign, national, state, or local law, statute,judgment, order, writ, injunction, decree, award, rule, or regulation of any Governmental Entity applicable to Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.4** **<u>Litigation.</u>** There are no material claims, actions, suits, or proceedings of any nature pending or, to the Knowledge of Buyer, threatened by or against Buyer, the officers, directors, employees, agents of Buyer, or any of their respective Affiliates involving, affecting, or relating to any assets, properties, or operations of Buyer or any of its Affiliates or the transactions contemplated by this Agreement. Buyer is not subject to any order, writ, judgment, award, injunction, or decree of any Governmental Entity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.5** **<u>Consents.</u>** There are no consents or notices required to be obtained or given by or on behalf of Buyer before consummation of the transactions contemplated by this Agreement and Buyer is in compliance with all Applicable Laws, rules, regulations, or orders of any Governmental Entity, or the provisions of any material contract of which Buyer is a party to, and all such consents have been duly obtained and are in full force and effect, except where the failure to obtain such consent will not have a material effect on the operation of Buyer's business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.6** **<u>Compliance with Applicable Law.</u>** The operations of Buyer are, and have been, conducted in all material respects in accordance with all Applicable Laws, regulations, orders, and other requirements of all Governmental Entities having jurisdiction over Buyer or its assets, properties, or operations, including, without limitation, all such laws, regulations, orders, and requirements relating to Buyer's business except in any case where the failure to so conduct its operations would not have a material effect on the operation of Buyer's business. Buyer has not received any notice of any violation of any such law, regulation, order, or other legal requirement, and is not in default with respect to any order, writ, judgment, award, injunction, or decree of any Governmental Entity, applicable to Buyer or any of its assets, properties, or operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.7** **<u>Brokers or Finders.</u>** No agent, broker, finder, investment banker, financial advisor, or other person is entitled to any brokerage, finder's, or other fee or commission in connection with any of the transactions contemplated by this Agreement, based upon arrangements made by or on behalf of Buyer **("Buyer's Broker Fees").** Buyer shall be solely responsible for the payment of any and all Buyer's Broker Fees due any agent, broker, finder, investment banker, financial advisor, or other person in connection with the transactions contemplated by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.8** **<u>Securities Law Compliance.</u>** The issuance of the shares of Buyer's common stock as the Purchase Price has been duly authorized and, upon issuance in accordance with this Agreement, will be validly issued, fully paid, and non-assessable, and will comply with all applicable securities laws, including any applicable exemptions under the Securities Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.9** **<u>Investment Intent.</u>** Buyer is acquiring the Membership Interests solely for its own account for investment purposes and not with a view to, or for offer or sale in connection with, any distribution thereof. Buyer is an "accredited investor" as defined in Regulation D promulgated by the Securities and Exchange Commission under the Securities Act of 1933, as amended. Buyer acknowledges that the

Membership Interests are not registered under the Securities Act of 1933, as amended, or any state securities laws, and that the Membership Interests may not be transferred or sold except pursuant to the registration provisions of the Securities Act of 1933, as amended or pursuant to an applicable exemption therefrom and subject to state securities laws and regulations, as applicable. Buyer is able to bear the economic risk of holding the Membership Interests for an indefinite period (including total loss of its investment), and has (either alone or together with its advisors) sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risk of its investment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.10** **<u>Solvency.</u>** After giving effect to the transactions contemplated by this Agreement, Buyer

&nbsp;&nbsp;&nbsp;&nbsp;(a) will be solvent (in that both the fair value of its assets will not be less than the sum of its liabilities and that the present saleable value of its assets will not be less than the amount required to pay its probable liabilities as they become absolute and matured), and (b) will have adequate capital with which to engage in its business. No transfer of property is being made and no obligation is being incurred in connection with the transactions contemplated by this Agreement with the intent to hinder, delay or defraud either present or future creditors of the Company, its Subsidiaries or Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.11** **<u>No Other Representations.</u>** Except for the representations and warranties contained in this ARTICLE 4 and the Transaction Documents, the Buyer makes any representation or warranty, express or implied, regarding the Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.12** **<u>Non-Reliance.</u>** Buyer acknowledges and agrees that it is not relying nor has it relied on any express or implied representations or warranties, whether in writing, orally or otherwise, made by or on behalf of or imputed to any the Sellers, the Company, its Subsidiaries, the Sellers' Representative, nor any other Person, except for those expressly made by the Sellers and the Company in ARTICLE 3 (as modified by the Disclosure Schedules) each of which is made solely by the Party specified therein and subject to the other terms and conditions of this Agreement, and that only those representations and warranties in ARTICLE 3 shall have any legal effect. Without limiting the foregoing, buyer further acknowledges and agrees that it is not relying nor has it relied on any projections, forecasts, estimates, plans or budgets of future revenues, expenses or expenditures, future results of operations (or any component thereof), future cash flows (or any component thereof) or future financial condition (or any component thereof) of the Company or its Subsidiaries heretofore or hereafter delivered to or made available to Buyer or any of its agents, representatives, lenders or affiliates or any other Person and neither the Company, its Subsidiaries, any Seller, the Sellers' Representative nor any other Person will have or be subject to any liability or indemnification obligations to Buyer or any of its agents, representatives, lenders or affiliates or any other Person, and none of Buyer or any of its agents, representatives, lenders or affiliates or any other Person shall have any claim against the Company, its Subsidiaries, any Seller, the Sellers' Representative nor any other Person, resulting from such delivery or availability or any subsequent use or otherwise in connection therewith.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.13** **<u>Valid Issue</u>** <u>of **Equity Consideration.**</u> The Equity Consideration, when issued and delivered in accordance with the terms set forth in this Agreement, will be duly authorized, validly issued, fully paid and nonassessable. The Equity Consideration will be issued in compliance with all applicable

U.S. federal and state securities Laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.14** **<u>Buyer Acknowledgment and Covenant Regarding Tenant Improvements.</u>** Buyer acknowledges that it has had the opportunity to discuss, to its satisfaction, the scope and status of all tenant improvements related to the Block 40 project with Seller's Representative. Buyer further represents that it is aware of all contractually obligated tenant improvement work required under the Leases or other agreements relating to the Project, including with respect to JBL, Wapas, Ten Ten Restaurant, and Naahma Sushi, and covenants to perform and complete, or cause to be performed and completed, all such tenant improvements in accordance with the terms of such agreements following the Closing.

**ARTICLE 5**

**COVENANTS AND CERTAIN UNDERSTANDINGS**

**AND AGREEMENTS OF THE PARTIES.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.1** **<u>Confidentiality.</u>** After the Closing, Sellers will keep the matters contemplated herein, all information about the Company or the Business, and all information provided by Buyer related to Buyer, confidential, and will not provide information about such matters to any party or use such information except to the extent necessary to effect the transactions contemplated hereby. Buyer will keep the matters contemplated herein and all information provided by Sellers related to the Sellers confidential, and will not provide information about such matters to any party or use such information except to the extent necessary to effect the transactions contemplated hereby or as required by Applicable Law. Buyer and the Sellers shall each cause their respective Affiliates, officers, directors, employees, agents, and advisors to keep confidential all information received in connection with the transactions contemplated hereby. The confidentiality restrictions set forth herein shall not apply to information that (i) was in the public domain before the date of this Agreement or subsequently came into the public domain other than as a result of disclosure by the party to whom the information was delivered; (ii) was lawfully received by a party from a third party free of any obligation of confidence of or to such third party; or (iii) is required to be disclosed in a judicial or administrative proceeding after giving the other party as much advance notice of the possibility of such disclosure as practicable so that the other party may attempt to limit such disclosure.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.2** **<u>Further Assurances.</u>** Upon the reasonable request of a party or parties hereto at any time after the Closing Date, the other party or parties shall forthwith execute and deliver such further instruments of assignment, transfer, conveyance, endorsement, direction, or authorization and other documents as the requesting party or parties or its or their counsel may reasonably request in order to effectuate the purposes of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.3** **<u>Management; Board Seat; Employment Agreement.</u>** At Closing, Buyer shall, a) appoint a Manager or Managers of the Company, as identified in Schedule 5.3, and shall cause Block 40, LLC to enter into employment agreements with Charles R. Abele, Jr. and Peter Jago, on terms mutually agreed by Buyer and such individuals, including a minimum term of three years, base salary, and customary benefits, with due consideration of any benefits or payments either receives through the Management Agreement with GCF Development attached to this agreement; and b) execute and abide by the Management Agreement between Block 40, LLC and GCF Development attached hereto as Exhibit B; and c) provide board level appointments for oversight of Charles R. Abele, Jr on behalf of Hollywood Circle Capital, LLC and Peter Jago on behalf of the Sellers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.4** **<u>No Shop.</u>** Until the Closing, neither Buyer nor the Sellers shall enter into or negotiate any similar contract or arrangement with any other Person, without the express written approval of the other parties hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.5** **<u>Termination of Company Operating Agreement.</u>** Immediately as of Closing, the Company and the Sellers hereby irrevocably agree that the operating agreement of the Company as of the date hereof, as it may have been amended from time to time (the **"Operating Agreement"),** is terminated and is null and void and of no further force or effect, and that no party thereto shall have any duty, liability, or obligation thereunder, except for any confidentiality or indemnification obligations that expressly survive termination as set forth therein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.6** **<u>Operation of Business Pre-Closing.</u>** Between the date of this Agreement and the Closing, Sellers shall use commercially reasonable efforts to cause the Company to operate the Business in the ordinary course consistent with past practice in all material respects, preserve its assets and business relationships, and not take any actions that would result in a Material Adverse Effect, including, without

limitation, **(i)** selling or disposing of any material Assets, (ii) incurring material liabilities, (iii) amending the Charter Documents, or (iv) declaring or paying any dividends or distributions. Sellers shall promptly notify Buyer of any material damage, loss, or casualty affecting the Company's Assets or Business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.7 <u>Tax</u> <u>Covenants.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>**Pre-Closing Taxes.**</u> Sellers shall prepare and file, or cause to be prepared and filed, all Tax Returns for the Company for periods ending on or before the Closing Date, and shall pay all Taxes due for such periods. Such Tax Returns shall be prepared in a manner consistent with past practice and provided to Buyer for review at least 15 days prior to filing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>**Straddle Period Taxes.**</u> For any Tax period that includes but does not end on the Closing Date (a **"Straddle Period"),** Taxes shall be allocated between the pre-Closing and post-Closing portions based on an interim closing of the books as of the Closing Date, except for property and ad valorem taxes, which shall be prorated based on the number of days in the period before and after the Closing Date. Sellers shall be responsible for the pre-Closing portion of such Taxes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>**Cooperation.**</u> Buyer and Sellers shall cooperate in the preparation and filing of Tax Returns, including providing access to records and assisting with any audits or inquiries related to Taxes for periods ending on or before the Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.8** **<u>Books and Records.</u>** At or promptly following the Closing, Sellers shall deliver or cause to be delivered to Buyer all books, records, and files of the Company, including financial, operational, and personnel records, whether in physical or electronic form. For three (3) years following the Closing, Buyer shall provide Sellers with reasonable access to such records for tax or legal purposes, subject to confidentiality obligations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.9** **<u>Notification of Certain Matters.</u>** Each Party shall give prompt notice to the other Parties if such Party or its Affiliates: (a) fails to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it or its Affiliates hereunder in any material respect; (b) receives any notice or other communication in writing from any third party (including any Govermnental Entity) alleging (i) that the consent of such third party is or may be required in connection with the transactions contemplated by this Agreement or (ii) any non-compliance with any Law by such Party or its Affiliates; (c) receives any notice or other communication from any Govermnental Entity in connection with the transactions contemplated by this Agreement; (d) discovers any fact or circumstance that, or becomes aware of the occurrence or non-occurrence of any event the occun-ence or non-occurrence of which, would reasonably be expected to cause or result in any of the conditions to the Closing set forth **in** <u>Article VII</u> not being satisfied or the satisfaction of those conditions being materially delayed; or (e) becomes aware of the commencement or threat, in writing, of any Action against such Party or any of its Affiliates, or any of their respective properties or assets, or, to the Knowledge of such Party, any officer, director, partner, member or manager, in his, her or its capacity as such, of such Party or of its Affiliates with respect to the consummation of the transactions contemplated by this Agreement. No such notice shall constitute an acknowledgement or admission by the Party providing the notice regarding whether or not any of the conditions to the Closing have been satisfied or in determining whether or not any of the representations, warranties or covenants contained in this Agreement have been breached.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.10 <u>Efforts.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Subject to the terms and conditions of this Agreement, each Party shall use its reasonable best efforts, and shall cooperate fully with the other Parties, to take, or cause to be taken, all actions and to do, or cause to be done, all things reasonably necessary, proper or advisable under applicable

Laws and regulations to consummate the transactions contemplated by this Agreement (including the receipt of all applicable consents of Governmental Entities) and to comply as promptly as practicable with all requirements of Governmental Entities applicable to the transactions contemplated by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Prior to the Closing, each Party shall use its commercially reasonable efforts to obtain any consents of Governmental Entities or other third Persons as may be necessary for the consummation by such Party or its Affiliates of the transactions contemplated by this Agreement or required as a result of the execution or performance of, or consummation of the transactions contemplated by, this Agreement by such Party or its Affiliates, and the other Parties shall provide reasonable cooperation in connection with such efforts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.11** **<u>Listing Covenant and Right of Rescission.</u>** Buyer has represented to Sellers that it intends to cause its equity interests, including the shares of common stock constituting the Equity Consideration, to be listed on a nationally recognized stock exchange in the United States, specifically either The Nasdaq Stock Market LLC ("Nasdaq") or the New York Stock Exchange ("NYSE"), on or before June 30, 2026 (the "Outside Listing Date"). The Parties acknowledge and agree that such representation is a material inducement to Sellers' decision to enter into this Agreement and to accept the Equity Consideration in exchange for the Membership Interests. Accordingly, Buyer covenants and agrees that, in the event that its shares of common stock (including the Equity Consideration) are not listed and publicly traded on either the Nasdaq or the NYSE on or prior to the Outside Listing Date, the Seller's Representative shall have the right, exercisable in his sole and absolute discretion within sixty (60) days following the Outside Listing Date, to elect to rescind the Transaction. In such event, (a) Buyer shall return the Membership Interests to the Sellers, pro rata in accordance with their respective Pro Rata Portions, free and clear of all liens and encumbrances, and (b) each Seller shall return to Buyer the portion of the Equity Consideration received by such Seller. The Parties agree to take all actions and execute all documents necessary to effectuate such rescission promptly following any such election by the Seller's Representative.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.12** **<u>EB-5 Program Compliance.</u>** Buyer acknowledges that certain investors in the Business prior to the Closing Date have invested capital pursuant to the requirements ofthe EB-5 Immigrant Investor Program administered by the United States Citizenship and Immigration Services ("USCIS"). Purchaser covenants and agrees that, from and after the Closing Date, it shall operate the Business in a manner to preserve the eligibility of such EB-5 investors to qualify for and obtain permanent resident status under the EB-5 Program. Without limiting the generality of the foregoing, Buyer shall not take any action, or fail to take any action, that would reasonably be expected to (i) result in the denial, revocation, or other adverse determination by USCIS of an EB-5 investor's I-526 or 1-829 petition, or (ii) materially interfere with the satisfaction of the job creation, capital at risk, or other requirements applicable to such EB-5 investors.

**ARTICLE 6** 

**CONDITIONS TO CLOSING.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.1** **<u>Conditions to Obligations of Each Party.</u>** The obligations ofthe Sellers, on the one hand, and Buyer, on the other hand, to consummate the transactions contemplated hereby are subject to the fulfillment, at or before the Closing Date, of the conditions set forth in this Section 6.1, any one or more of which may be waived in writing by the party entitled to the benefit of such condition.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>**No Action or Proceeding.**</u> No preliminary or permanent injunction or other order issued by any Governmental Entity that declares this Agreement invalid in any material respect or prevents or would be violated by the consummation of the transactions contemplated hereby, or which materially adversely affects the assets, properties, operations, net income, or financial condition of the Company, is in effect; and no action or proceeding has been instituted or threatened by any Governmental Entity, other person, or entity which seeks to prevent or delay the consummation of the transactions contemplated by this Agreement or which challenges the validity or enforceability of this Agreement, the result of which could constitute a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) **<u>Compliance with Law.</u>** There shall have been obtained all permits, approvals, and consents of all Governmental Entities that counsel for Buyer or for the Seller may reasonably deem necessary or appropriate so that consummation of the transactions contemplated by this Agreement will be in compliance with Applicable Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.2** **<u>Conditions to Obligations of Buyer.</u>** The obligations of Buyer to consummate the transactions contemplated hereby are subject to the fulfillment to Buyer's reasonable satisfaction, at or before the Closing Date, ofthe conditions set forth in this Section 6.2, any one or more of which may be waived by Buyer in writing in its discretion:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>**Additional Closing Documents of Sellers.**</u> Buyer has received, or is receiving at the Closing, all ofthe following, each duly executed by the parties thereto (other than Buyer) and dated the Closing Date (or an earlier date satisfactory to Buyer), in form and substance satisfactory to Buyer: (i) Copies of the resolutions of the managers of the Company authorizing the execution, delivery, and perfonnance of this Agreement and the other Transaction Documents to be delivered by the Sellers and the Company and the consummation of the transactions contemplated hereby and thereby, (ii) A certificate of existence/good standing issued by the Secretary of State of Florida as of a recent date prior to Closing for the Company. (iii) For Sellers that are not natural persons, certificates of authority with respect to the persons signing and delivering documents on behalf of such Seller and evidence of approval of the transactions contemplated by this Agreement with respect to such Seller.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>**Consents and Approvals.**</u> All required consents, waivers, authorizations, and approvals of any Governmental Entity, and of any other Person or entity, required under the Contracts, Licenses, or otherwise in connection with the execution, delivery, and performance of this Agreement shall have been duly obtained in fonn reasonably satisfactory to Buyer, shall be in full force and effect on the Closing Date, and the original executed copies shall have been delivered to Buyer on or before the Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) **<u>Other Obligations.</u>** The Sellers shall have paid and satisfied in full the Sellers' Brokers Fees and any other payments or monetary obligations due by the Company or Sellers to any Person as a result of the purchase of the Membership Interests or the consummation of the transactions contemplated by this Agreement, including any outstanding loans or creditor obligations. Buyer agrees to add its corporate guarantee to the senior loan and to use reasonable efforts to remove its guarantees of Harish Mehta and McCarthy Estate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) **<u>Representations and Warranties.</u>** The representations and warranties of Sellers and the Company in Article 3 shall be true and correct in all material respects as of the Closing Date as if made on such date, except for representations and warranties made as of a specific date, which shall be true and correct as of such date.

**6,3 <u>Conditions to Obligations of the Sellers.</u>** The obligations o f the Sellers to consummate the transactions contemplated hereby are subject to the fulfillment, at or before the Closing Date, of the conditions set forth in this Section 6.3, any one or more of which may be waived by the Sellers' Representative in writing in its discretion:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) **<u>Additional Closing Documents of Buyer.</u>** Buyer has executed and delivered, or is executing and delivering at the Closing copies, certified by an authorized officer of Buyer, of resolutions of its board of directors authorizing the execution and delivery of this Agreement and the other Transaction Documents to be delivered by Buyer and the consummation of the transactions contemplated hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>**Consents and Approvals.**</u> All required consents, waivers, authorizations, and approvals of any Governmental Entity, and ofany other person or entity, needed by the Buyer in connection with the execution, delivery, and performance of this Agreement shall have been duly obtained in form reasonably satisfactory to the Sellers, shall be in full force and effect on the Closing Date, and the original executed copies shall have been delivered to the Sellers on or before the Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>**Other Obligations.**</u> The Buyer shall have paid and satisfied in full the Buyer's Brokers Fees and any other payments or monetary obligations due by Buyer to any Person as a result of the purchase of the Membership Interests or the consummation of the transactions contemplated by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>**Representations and Warranties.**</u> The representations and warranties of Buyer in Article 4 shall be true and correct in all material respects as of the Closing Date as if made on such date, except for representations and warranties made as of a specific date, which shall be true and correct as of such date.

**ARTICLE 7** 

**INDEMNIFICATION AND SURVIVAL.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.1** **<u>Survival of Representations and Warranties.</u>** The representations and warranties of the parties contained in this Agreement shall survive the Closing as follows: the representations and warranties in Sections 3.1 (Organization and Good Standing), 3.2 (Ownership of Membership Interests), 3.3 (Authorization of Agreement), 3.23 (Ownership of Membership Interests; Authorization of Agreement), 4.1 (Organization and Corporate Authority), and 4.8 (Securities Law Compliance) and Sections 3.18 (Taxes) and 3.19 (Environmental Matters) until the date that is six (6) years following the Closing Date; and (c) all other representations and warranties shall survive for a period of 18 months following the Closing Date. Covenants and agreements shall survive in accordance with their terms.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.2** **<u>Indemnification by Sellers.</u>** Subject to the limitations in Section 7.4, Sellers, jointly and severally, shall indemnify, defend, and hold harmless Buyer, its Affiliates, officers, directors, and successors (collectively, the **"Buyer Indemnified Parties")** from and against any and all losses, damages, liabilities, costs, and expenses, including reasonable attorneys' fees (collectively, **"Losses"),** arising out of or relating to (a) any breach of any representation or warranty of Sellers or the Company in Article 3, (b) any breach of any covenant or agreement of Sellers or the Company in this Agreement, or (c) any Taxes or liabilities of the Company for periods prior to the Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3 <u>Indemnification by Buyer.</u> Subject to the limitations in Section 7.4, Buyer shall indemnify, defend, and hold harmless Sellers and their Affiliates, heirs, and successors (collectively, the **"Seller Indemnified Parties")** from and against any Losses arising out of or relating to (a) any breach of any representation or warranty of Buyer in Article 4, or (b) any breach of any covenant or agreement of Buyer in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4 <u>Limitations on Indemnification.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) No claim for indemnification under Sections 7.2(a) or 7.3(a) shall be made unless the aggregate Losses exceed $25,000 (the **"Basket"),** but once exceeded, the indemnifying party shall be liable for all Losses from the first dollar.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The maximum liability of Sellers under Section 7.2(a) shall not exceed 25% of the Purchase Price, except for breaches of Sections 3.1, 3.2, 3.3, 3.23, which shall be capped at 100% of the Purchase Price.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) No party shall be liable for punitive or consequential damages, except to the extent payable to a third party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Claims for indemnification must be made in writing within the survival period specified in Section 7.1, with notice and opportunity for the indemnifying party to defend or resolve the claim.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The Indemnified Parties shall in all cases exercise commercially reasonable efforts to mitigate the amount of any Losses for which indemnification is sought from any Indemnifying Party hereunder. Without limiting the foregoing, the amount of Losses payable by any Indemnifying Party under this <u>Article VII</u> shall be reduced by (i) any insurance proceeds actually received from an insurance carrier by the Indemnified Party with respect thereto (net of any applicable costs of recovery or collection thereof or any increase in premium resulting therefrom), and (ii) indemnity or contribution amounts actually received from third parties (net of any applicable costs of recovery or collection thereof); <u>provided, that,</u> in each case, no Indemnified Party shall be required to commence any Action against an insurance carrier or other Person: <u>provided further that</u> if an Indemnified Party receives insurance proceeds, indemnity or contribution amounts,after having received payment from (or on behalf of) any Indemnifying Party with respect to a Loss, such Indemnified Party shall refund the Indemnifying Party up to the lesser of (x) the amount of the insurance proceeds actually received (net of any applicable costs of recovery or collection thereof or any increase in premium resulting therefrom) and (y) the amount of indemnification received by the Indemnified Party from the Indemnifying Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.5** **<u>Indemnification Procedures.</u>** A party seeking indemnification (the **"Indemnified** **Party")** shall promptly notify the indemnifying party (the **"Indemnifying Party")** in writing of any claim, providing reasonable detail. The Indemnifying Party shall have the right to assume control of the defense of such claim, provided it confirms in writing its obligation to indemnify. The Indemnified Party shall cooperate in the defense and may participate at its own expense. No settlement shall be made without the Indemnified Party's consent, unless it provides a full release of the Indemnified Party without admission of liability.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.6 <u>Escrow</u> <u>Amount.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Buyer shall first make claims against the Escrow Fund in connection with the satisfaction of any obligation of the Seller under <u>Section 7.2</u> before seeking recourse against the Sellers. On the date that is twelve (12) months following the Closing Date (the **"Escrow Release Date")** an amount equal to the balance then on deposit in the Escrow Fund <u>minus</u> the aggregate amount, if any, which any Buyer Indemnified Party has claimed under <u>_section 7.2</u> prior to such date (to the extent such Claims, if any, remain unresolved) shall, upon a written instruction to the Escrow Agent executed by Buyer and the Sellers' Representative, be released to the Sellers in accordance with their Pro-Rata Portion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any amount remaining in the Escrow Fund following the Escrow Release Date for the satisfaction of any unresolved Claims, shall be released upon the final resolution of such Claims in accordance with the joint written instructions delivered by Buyer and the Sellers' Representative to the Escrow Agent. If any amount remains in the Escrow Fund following the resolution of all Claims and the distribution to the Buyer Indemnified Parties of any amounts payable to them in connection therewith, Buyer and the Sellers' Representative shall execute and deliver a joint written instruction to the Escrow Agent directing the payment of the remaining balance to the Sellers in accordance with their Pro-Rata Portion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.7 <u>**Exclusive Remedies.**</u> The parties acknowledge and agree that from and after Closing their sole and exclusive remedy with respect to any and all claims for any breach of any representation, warranty, covenant, agreement or obligation set forth herein, shall be pursuant to the indemnification provisions set forth in this <u>ARTICLE 7.</u> In furtherance of the foregoing, each party hereby waives, from and after Closing, to the fullest extent permitted under Law, any and all rights, claims and causes of action for any breach of any representation, warranty, covenant, agreement or obligation set forth herein it may have against the other parties hereto and their Affiliates and each of their respective Representatives, except pursuant to the indemnification provisions set forth in this <u>ARTICLE 7.</u> Nothing in this <u>Section 7.7</u> shall limit any Person's right to seek and obtain any equitable relief to which any Person shall be entitled or to.

**ARTICLE 8**

**TERMINATION.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.1** **<u>Termination Events.</u>** This Agreement may be terminated prior to the Closing:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) by mutual written consent of Buyer and the Sellers' Representative;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) by either Buyer or the Sellers' Representative if the Closing has not occurred by

Sept 15, 2025 (the **"Termination Date"),** provided the terminating party is not in material breach of this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) by either Buyer or the Sellers' Representative if a Governmental Entity issues a final, non-appealable order prohibiting the transactions contemplated hereby; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) by either Buyer or the Sellers' Representative if the other party materially breaches this Agreement and fails to cure such breach within 30 days of written notice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.2** **<u>Effect of Termiuatiou,</u>** Upon termination pursuant to Section 8.1, this Agreement shall become void and have no further force or effect, except that Sections 5.1 (Confidentiality), 9.1 (Notices), 9.3 (Governing Law), 9.10 (Expenses of Transactions), 9.11 (Submission to Jurisdiction), and 9.12 (Attorneys' Fees) shall survive. Termination shall not relieve any party of liability for any willful breach of this Agreement prior to termination.

**ARTICLE 9**

**MISCELLANEOUS.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.1** **<u>Notices.</u>** All notices, requests, demands, and other communications hereunder shall be in writing and shall be deemed giveu upon personal delivery or three (3) calendar days after being mailed by certified or registered mail, postage prepaid, return receipt requested, or one (1) business day after being sent via a nationally recognized overnight courier service if overnight courier service is requested from such service or upon receipt of electronic or other confirmation of transmission if sent via facsimile, to the parties, their successors in interest, or their assignees at the following addresses and telephone numbers, or at such other addresses or telephone numbers as the parties may designate by written notice in accordance with this Section 9.1:

If to Buyer:

Favo Capital, Inc,

4300 N. University Drive

Suite D-105

Lauderhill, Florida 33351

If to the Sellers or the Company:

1776 Polk Street, Suite 200

Hollywood, FL 33020

Attn: Charles R. Abele, Jr.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.2 <u>Sellers'</u> <u>Representative.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Each Seller hereby appoints Charles R. Abele, Jr. as the Sellers' Representative to act as the agent and attorney-in-fact for all Sellers with respect to this Agreement, including receiving and sending notices, granting waivers, resolving disputes, and making decisions on behalf of Sellers. Any decision or action by the Sellers' Representative shall be binding on all Sellers. Buyer may rely on the authority of the Sellers' Representative without further inquiry.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Sellers' Representative shall have full power and authority to take all actions under this Agreement, any applicable Transaction Document and any other agreement entered into or document delivered in connection with the Transaction that are to be taken by or on behalf ofthe Sellers or by the Sellers' Representative. The Sellers' Representative shall take any and all actions which it believes are necessary or appropriate under this Agreement and any applicable Transaction Document, including giving and receiving any notice or instruction permitted or required under this Agreement and any applicable Transaction Document by the Sellers' Representative, interpreting all of the terms and provisions of this Agreement and any applicable Transaction Document, authorizing payments to be made with respect hereto or thereto, obtaining reimbursement as provided for herein for all out-of-pocket fees and expenses and other obligations of or incurred by the Sellers' Representative in connection with this Agreement and any applicable Transaction Document, defending, negotiating and settling any claims relating to <u>Section 2.5</u> hereof, dealing with Buyer under this Agreement and any applicable Transaction Document, taking any other actions specified in or contemplated by this Agreement and any applicable Transaction Document, and engaging counsel, accountants or other representatives in connection with the foregoing matters. The power of attorney granted by each of the Sellers (on its own behalf and on behalf of its successors and permitted assigns) in this <u>Section 9.1</u> is coupled with an interest, is irrevocable, may be delegated by the Sellers' Representative and shall survive the death, incapacity or dissolution (as applicable) of such Seller and the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>**Authorization.**</u> The Sellers hereby authorize the Sellers' Representative to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) consummate the Transactions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) receive all notices or documents given or to be given to the Sellers pursuant hereto or in connection herewith or therewith and to receive and accept services of legal process in connection with any sttlt or proceeding arising under this Agreement or any applicable Transaction **Document;**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) execute and deliver amendments to this Agreement on behalf of the Sellers in accordance with <u>Section 8.1;</u> execute and deliver the Escrow Agreement and any other applicable Transaction Document (and any amendments thereto);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) authorize distributions from the Escrow Account on behalf of the Sellers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) engage counsel, accountants and other advisors, and incur other expenses **in** connection with this Agreement, any applicable Transaction Document and the transactions contemplated hereby or thereby, as the Sellers' Representative may in its sole discretion deem necessary or appropriate; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) take such action as the Sellers' Representative may **in** its sole discretion deem necessary or appropriate **in** respect of: **(i)** waiving any inaccuracies in the representations or warranties of Buyer contained in this Agreement, any applicable Transaction Document or in any document delivered by Buyer pursuant hereto or thereto; (ii) taking such other action as the Sellers' Representative is authorized to take under this Agreement or any applicable Transaction Document (including the Escrow Agreement); (iii) receiving all documents or certificates and making all determinations, in its capacity as Sellers' Representative, required under this Agreement or any applicable Transaction Document (including the Escrow Agreement); and (iv) all such actions as may be necessary to carry out the responsibilities of the Sellers' Representative contemplated by this Agreement or any applicable Transaction Document (including the Escrow Agreement), including the defense and/or settlement of any claims relating to <u>Section 2.5</u> hereof and any waiver of any obligation of Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>**Agency.**</u> Notwithstanding any provision herein to the contrary, the Sellers' Representative is not an agent of the Sellers, and shall have no duties to the Sellers or liability to the Sellers with respect to any action taken, decision made or instruction given by the Sellers' Representative in connection with this Agreement or any applicable Transaction Document: <u>provided, however,</u> that the foregoing exculpation of the Sellers' Representative shall not apply to the extent that such actions, decisions or instructions have been finally determined by a court of competent jurisdiction to result from the Sellers' Representative's fraud or willful misconduct in connection with such Sellers' Representative's performance under this Agreement and any applicable Transaction Document.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>**Indemnification of Sellers' Representative.**</u> The Sellers' Representative shall be indemnified by the Sellers for and shall be held harmless against any loss, liability or expense incurred by the Sellers' Representative or any of its Affiliates and any of their respective managers, directors, officers, employees, agents, members, partners, stockholders, consultants, attorneys, accountants, advisors, brokers, representatives or controlling persons, **in** each case, relating to the Sellers' Representative's conduct as Sellers' Representative, other than losses, liabilities or expenses that have been finally determined by a court of competent jurisdiction to result from the Sellers' Representative's fraud or willful misconduct in connection with its performance under this Agreement and any applicable Transaction Document. This indemnification shall survive the termination of this Agreement and any applicable Transaction Document. The Sellers' Representative may, in all questions arising under this Agreement and any applicable Transaction Document, rely on the advice of counsel and for anything done, omitted or suffered in good faith by the Sellers' Representative in accordance with such advice, and the Sellers' Representative shall not be liable to the Sellers or any other person in connection therewith. In no event shall the Sellers' Representative be liable hereunder or in connection herewith for any indirect, punitive, special or consequential damages.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>**Reliance.**</u> **In** the performance of its duties hereunder, the Sellers' Representative shall be entitled to (a) rely upon any document or instrument reasonably believed to be genuine, accurate as to content and signed by any Seller or any party hereunder and (b) assume that any Person purporting to give any notice in accordance with the provisions hereof has been duly authorized to do so. Buyer and its Affiliates shall be entitled to entitled to conclusively and absolutely rely, without inquiry, on any approval, consent, election, notice, decision, agreement, waiver, delivery, interpretation, amendment or other action given, made or taken by the Sellers' Representative for or on behalf of any Seller as if it were expressly ratified and confirmed in writing by such Seller.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>**Irrevocable Appointment.**</u> The appointment of the Sellers• Representative hereunder is irrevocable and any action taken by the Sellers' Representative pursuant to the authority granted in this <u>Section 9.2</u> shall be effective and absolutely binding as the action of the Sellers' Representative under this Agreement and any applicable Transaction Document.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.3** **<u>Assignability and Parties in Interest.</u>** This Agreement and the rights, interests, or obligations hereunder may not be assigned by any of the parties hereto without the prior written consent of the other parties hereto. This Agreement shall inure to the benefit of and be binding upon Buyer and the Sellers and their respective permitted successors and assigns. Nothing in this Agreement will confer upon any person or entity not a party to this Agreement, or the legal representatives of such person or entity, any rights or remedies of any nature or kind whatsoever tmder or by reason of this Agreement, except for the Buyer Indemnified Parties and Seller Indemnified Parties under Article 7 in connection with indemnification claims and except in connection with permitted assignments as provided above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.4** **<u>Governing Law.</u>** This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Nevada, without regard to its conflicts-of-law principles.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.5** **<u>Counterparts.</u>** Facsimile transmission of any signed original document and/or retransmission of any signed facsimile transmission will be deemed the same as delivery of an original. At the request of any party, the parties will confirm facsimile transmission by signing a duplicate original document. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which shall constitute but one and the same instrument.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.6** **<u>Publicity.</u>** No party shall issue any press release or make any public statement regarding the transactions contemplated hereby without the prior written consent of the other parties, except that Buyer may issue a press release and file a report with the OTC Markets with respect to the transactions contemplated hereby, provided such disclosures are provided to the Sellers' Representative for review at least 48 hours prior to release or filing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.7** **<u>Complete Agreement.</u>** This Agreement, the exhibits and schedules hereto, and the other Transaction Documents contain or will contain the entire agreement between the parties hereto with respect to the transactions contemplated herein and therein and shall supersede all previous oral and written and all contemporaneous oral negotiations, commitments, and understandings.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.8** **<u>Modifications, Amendments, and Waivers.</u>** No supplement, modification, or amendment of this Agreement will be binding unless executed in writing by Buyer and the Sellers' Representative on behalf of all Sellers. No waiver of any of the provisions of this Agreement will be considered, or will constitute, a waiver of any of the rights or remedies, at law or equity, ofthe party entitled to the benefit of such provisions unless made in writing and executed by the party entitled to the benefit of such provision. No waiver of any of the provisions of this Agreement shall constitute a waiver of any other provision, whether or not similar.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.9** **<u>Headings; References.</u>** The headings contained in this Agreement and the other Transaction Documents are for reference purposes only and shall not affect in any way the meaning, construction, or interpretation of this Agreement and the other Transaction Documents. References herein to Articles, Sections, Schedules, and Exhibits refer to the referenced Articles, Sections, Schedules, or Exhibits hereof unless otherwise specified.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.10** **<u>Severability.</u>** Any provision of this Agreement, which is invalid, illegal, or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity, illegality, or unenforceability, without affecting in any way the remaining provisions hereof in such jurisdiction or rendering that or any other provision of this Agreement invalid, illegal, or unenforceable in any other jurisdiction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.11** **<u>Entire Agreement.</u>** This Agreement and the ancillary Transaction Documents constitute the sole and entire agreement of the parties to this Agreement with respect to the subject matter contained herein and therein, and supersede all prior and contemporaneous understandings and agreements, both written and oral, with respect to such subject matter. In the event of any inconsistency between the statements in the body of this Agreement and those in the Transaction Documents, the Exhibits and Disclosure Schedules (other than an exception expressly set forth as such in the Disclosure Schedules), the statements in the body of this Agreement will control. For the avoidance of doubt, the Parties intend that any previously executed or partially executed version(s) of this Agreement are expressly superseded by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.12** **<u>Expenses of Transactions.</u>** All fees, costs, and expenses incurred by Buyer, in connection with the transactions contemplated by this Agreement shall be borne by Buyer, and all fees, costs, and expenses incurred by the Sellers or the Company in connection with the transactions contemplated by this Agreement shall be borne by the Sellers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.13** **<u>Submission to Jurisdiction.</u>** All actions or proceedings arising in connection with this Agreement, if any, shall be tried and litigated exclusively in the state or federal courts located in the State of Nevada, or such other venue as may be mutually agreed to by the parties. The aforementioned choice of venue is intended by the parties to be mandatory and not permissive in nature, thereby precluding the possibility of litigation between the parties with respect to or arising out of this Agreement in any jurisdiction other than that specified in this paragraph. Each party hereby waives any right it may have to assert the doctrine of forum non conveniens or similar doctrine or to object to venue with respect to any proceeding brought in accordance with this paragraph, and stipulates that the State and Federal courts located in Nevada shall have in personam jurisdiction over each of them for the purpose of litigating any such dispute, controversy, or proceeding. Each party hereby authorizes and accepts service of process sufficient for personal jurisdiction in any action against it as contemplated by this Section by registered or certified mail, return receipt requested, postage prepaid, to its address for the giving of notices as set forth in Section 9.1. Nothing herein shall affect the right of any party to serve process in any other manner permitted by law. The parties may, by mutual agreement, elect to resolve disputes through arbitration administered by the American Arbitration Association in Nevada under its Commercial Arbitration Rules, with any resulting award enforceable in the courts specified above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.14** **<u>Attorneys' Fees.</u>** If Buyer or any of its Affiliates, successors, or assigns brings any action, suit, counterclaim, cross-claim, appeal, arbitration, or mediation for any relief against the Sellers or any of their respective Affiliates, successors, or assigns, or if the Sellers or any of their respective Affiliates, successors, or assigns brings any action, suit, counterclaim, cross-claim, appeal, arbitration, or mediation for any relief against Buyer or any of its Affiliates, successors, or assigns, declaratory or otherwise, to enforce the terms hereof or to declare rights hereunder (collectively, an **"Action"),** in addition to any damages and costs which the prevailing party otherwise would be entitled, the non-prevailing party shall pay to the prevailing party a reasonable sum for attorneys' fees and costs (at the prevailing party's attorneys' then-prevailing rates) incurred in bringing or defending such Action and/or enforcing any judgment, order, ruling, or award (collectively, a **"Decision")** granted therein, all of which shall be deemed to have accrued on the commencement of such Action and shall be paid whether or not such action is prosecuted to a Decision. Any Decision entered in such Action shall contain a specific provision providing for the recovery of attorneys' fees and costs incurred in enforcing such Decision.

For the purposes of this Section, attorneys' fees shall include, without limitation, fees incurred in the following: (I) post judgment motions and collection actions; (2) contempt proceedings; (3) garnishment, levy, and debtor and third-party examinations; (4) discovery; and (5) bankruptcy litigation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.15 <u>Representation of the Sellers, the Sellers' Representative and its Affiliates.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Buyer and each of the other Parties acknowledges that Shumaker, Loop & Kendrick **("SLK")** has acted as counsel to the Company, its Subsidiaries, the Sellers' Representative, certain of the Sellers and certain members of the Company's management (in their capacities as equityholders of the Sellers) in connection with the negotiation of this Agreement and the Transactions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Accordingly, Buyer consents and agrees, on its own behalf and on behalf of the Company and its Subsidiaries (collectively with Buyer, the **"Conflict Parties"),** that, following the Closing, SLK may serve as counsel to the Sellers' Representative, any of the Sellers and members of the Company's management (collectively, the **"Seller Parties"),** including with respect to any litigation, claim or obligation arising out ofor relating to this Agreement or the transactions contemplated by this Agreement, or otherwise where the interests of the Seller Parties may be directly adverse to Buyer and its Subsidiaries (including the Conflict Parties), notwithstanding any representation by SLK prior to the Closing of the Conflict Parties in a matter substantially related to any such dispute(s), and notwithstanding whether SLK may be handling ongoing matters for the Conflict Parties. Buyer, on behalf of itself and the other Conflict Parties, hereby (a) waive any claim they have or may have that SLK has a conflict of interest or is otherwise prohibited from engaging in such representation and (b) agree that, in the event that a dispute arises after the Closing between Buyer, the Company or any of its Subsidiaries, on the one hand, and any Seller Part(y)(ies), on the other hand, SLK may represent such Seller Part(y)(ies) in such dispute even though the interests of such Person(s) may be directly adverse to Buyer or the Company, and even though SLK may have represented the Seller Parties in a matter substantially related to such dispute or may be handling ongoing matters for the Conflict Parties. Buyer, on behalf of itself and the other Conflict Parties, further consents and agrees to, the communication by SLK to the Seller Parties in connection with any such representation of any fact known to SLK arising by reason ofSLK's prior representation ofthe Conflict Parties. Buyer represents that Buyer's own attorney has explained and helped Buyer evaluate the implications and risks of waiving, on behalf of itself and the other Conflict Parties, the right to assert a future conflict against SLK, and Buyer's consent, including on behalf of the other Conflict Parties, with respect to this waiver is fully informed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Buyer, on behalf of itself and the other Conflict Parties, also further agrees that all communications in any form or format whatsoever between or among SLK, on the one hand, and any of the Conflict Parties, the Sellers, the Sellers' Representative, their respective Affiliates and their and their Affiliates' respective Representatives, on the other hand, that relate in any way to the negotiation, documentation and consummation of the transactions contemplated by this Agreement, any alternative transaction(s) to the transactions contemplated by this Agreement presented to or considered by any of the Conflict Parties, or any dispute arising under this Agreement (collectively, the **"Privileged Communications")** shall be deemed to be attorney-client privileged and that such attorney-client privilege and any expectation of client confidence relating thereto belongs to the Sellers' Representative and the Sellers, shall be controlled by the Sellers' Representative on behalf of the Sellers, and will not pass to or be claimed by any of the Conflict Parties (including Buyer or the Company). It is acknowledged and agreed that any failure by the Sellers or the Company or any of its Subsidiaries to remove documents, emails and other non-email electronic documents concerning the negotiation or drafting of this Agreement, or any other agreement previously contemplated by the Sellers which, if consummated, would have resulted in a transaction substantially similar to the one contemplated by this Agreement, which are protected by the attorney-client or work product privilege(s), or which constitute Non-Privileged Communications, is inadvertent and Buyer shall not, and shall cause its Subsidiaries (including the Company), and its and their respective directors, managers, employees, officers and other Representatives not to, intentionally use or attempt to use any means to access, retrieve, restore, recreate, unarchive or otherwise gain access to or view any such materials for any purpose.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Buyer further agrees, on behalf of itself and the other Conflict Parties, that all communications in any form or format whatsoever between or among SLK, on the one hand, and any of the Conflict Parties, the Sellers, the Sellers' Representative, their respective Affiliates and their and their Affiliates' respective Representatives, that relate in any way to the negotiation, documentation and consummation of the transactions contemplated by this Agreement, any alternative transaction(s) to the transactions contemplated by this Agreement presented to or considered by any of the Conflict Parties, or any dispute arising under this Agreement and that are not Privileged Communications **("Non-Privileged** **Communications")** shall also belong solely to the Sellers' Representative and the Sellers (and not the Conflict Parties) and shall not pass to or be claimed by Buyer or any of the other Conflict Parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) In addition, all of the client files and records in the possession of SLK, to the extent related to this Agreement and the transactions contemplated hereby or otherwise, will continue to be property of (and be controlled by) the Sellers' Representative and the Sellers, and neither Buyer, the Company nor any other Conflict Party will have any access to them, nor shall SLK have any duty to reveal or disclose any such files and records or other materials or any Privileged Communications by reason of any attorney-client relationship between SLK, on the one hand, and the Company or any of its Subsidiaries, on the other hand.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Notwithstanding the foregoing, in the event that a dispute arises between Buyer or the other Conflict Parties (including the Company), on the one hand, and a third party other than the Sellers' Representative or the Sellers, on the other hand, after the Closing, the Company or the other applicable Conflict Party may assert the attorney-client privilege to prevent disclosure of Privileged Communications by SLK to such third party: <u>provided, however,</u> that no Conflict Party (including the Company) may waive such privilege without the prior written consent of the Sellers' Representative. In the event that any Conflict Party is requested or required by governmental order or otherwise to access or obtain a copy of all or any portion of the Privileged Communications, Buyer shall promptly, but in any event within two (2) Business Days, notify the Sellers' Representative in writing (including by making specific reference to this Section) so that the Sellers' Representative or the applicable Seller(s) can seek a protective order, and Buyer agrees to use, and to cause the other Conflict Parties to use, all commercially reasonable efforts to assist therewith.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, each of the parties hereto has executed this Membership Interest Purchase Agreement as of the date first above written.

FAVO CAPITAL, INC.

By: <u>/s/ Shaun Quin</u>

Name: Shaun Quin

Title: CEO

BLOCK 40 INVESTMENTS HOLDINGS, LLC

By: <u>/s/ Charles R. Abele Jr.</u>

Name: Charles R. Abele, Jr.

Title: Authorized Representative

**List of Exhibits**

**Schedule 1 Membership Interest** 

**Exhibit A Allocation Schedule** 

**Exhibit B Management Agreement**

**Schedule 3.1 Operating Permits**

**Schedule** **3.6 Owned Real Property & Leased Real Property**

**Schedule** **3.7 Intellectual Property Owed/ Leased**

**Schedule** **3.9 Consents**

**Schedule** **3.10 Employee Benefit and Labor Matters**

 **Schedule** **3.11 Litigation**

**Schedule** **3.14 Licenses**

**Schedule** **3.15 Intercompany and Affiliate Transactions**

**Schedule** **3.16 Insurance**

**Schedule** **5.3 Management and Employment Agreement** 

**Schedule 1**

**Members' Signatures and Ownership**

---

| | |
|:---|:---|
| **Members** | **Membership Interest in the Company** |
| ARG PROPERTY HOLDINGS, LLC | 19.1030% Membership Interest |
| By: Charles R. Abele Jr. |  |
| <u>/s/ Charles R. Abele Jr.</u> |  |
| GOMO II, LLC | 19.1030% Membership Interest |
| By: Jose R. Boschetti |  |
| <u>/s/ Jose R. Boschetti</u> |  |
| FOUR AT BLOCK 55, LLC | 25.4147% Membership Interest |
| By: Peter Jago |  |
| <u>/s/ Peter Jago</u> |  |
| DBM AT BOCK 55, LLC | 12.7912% Membership Interest |
| By: Peter Jago |  |
| <u>/s/ Peter Jago</u> |  |
| MANTON 3, LLC | 10.3116% Membership Interest |
| By: Harish Mehta |  |
| <u>/s/ Harish Mehta</u> |  |
| MUIR.FIELD USA,LLC | 10.3316% Membership Interest |
| BY: Estate of Cecil Reddy |  |
| <u>/s/ Estate of Cecil Reddy</u> |  |
| HIGHLAND TARTA INVESTMENTS, LLC | 1.3477% Membership Interest |
| By: Graham MacKenzie |  |
| <u>/s/ Graham MacKenzie</u> |  |
| DE JAGER INVESTMENTS, LLC | 1.6173% Membership Interest |
| By: Annari de Jagger |  |
| <u>/s/ Annari de Jagger</u> |  |

---

![](image_022.jpg)

**Exhibit B** 

**Management Agreement**

(See attached)

**<u>MANAGEMENT</u> <u>AGREEMENT</u>**

**THIS MANAGEMENT AGREEMENT,** made as of July 30, 2025, by and between **BLOCK 40, LLC,** a Florida limited liability company ("Owner" or "Company"), having its principal place of business at 1776 Polk Street, Suite 200, Hollywood, Florida 33020 and **GCF** **DEVELOPMENT, LLC,** a Florida limited liability company ("Manager"), having its principal offices at 1776 Polk Street, Suite 200, Hollywood, FL 33020.

<u>PRELIMINARY</u> <u>STATEMENT</u>

**WHEREAS,** Owner desires to, develop and operate the Project (as defined herein) and to retain the Manager to be the development manager of the Project, and to provide its services and expertise in connection with the management, accounting and administrative services required for the development, supervision of construction and operation of the Project, as a Class A Mixed-use building; and

**WHEREAS,** Manager desires to be retained as the Project's development manager and to provide such expertise and services, all upon the terms and conditions hereinafter set forth.

**NOW, THEREFORE,** Owner and Manager agree as follows:

**<u>ARTICLE I DEFINITIONS</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1Definitions. As used herein, the following terms shall have the respective meanings indicated below.

<u>Affiliate</u> - With respect to any entity, any natural person or firm, corporation, partnership, association, trust or other entity which, directly or indirectly, controls, is controlled by, or is under common control with, the subject entity; a natural person or entity which has another entity as an Affiliate under the foregoing shall also be deemed to be an Affiliate of such entity. For purposes hereof, the terms "control" shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of any such entity, or the power to veto major policy decisions of any such entity, whether through the ownership of voting securities, by contract, or otherwise.

<u>Budget</u> - The "Budget" adopted by the Owners' members, as amended and supplemented from time to time by the Owner's Management Committee in accordance with the Owner's operating agreement.

<u>Disbursement Agent</u> - The party designated by the Manager to disburse the investment proceeds from an Offering in accordance with a Disbursement Agreement. The Disbursement Agent may be an Affiliate of the Manager.

<u>Disbursement Agreement</u> - The agreement to be entered into between the Owner and a Disbursement Agent to disburse the investment proceeds from an Offering.

<u>Legal Requirements</u> - All public laws, statutes, ordinances, orders, rules, regulations, permits, licenses, authorizations, directions and requirements of all governments and governmental authorities, which, now or hereafter, may be applicable to the Project and the operation thereof, including, without limitation, those relating to zoning, building, fire safety, environmental and health, employee benefits, and providing continued health care coverage under the Employees Retirement Income Security Act of 1974, as amended.

<u>Management Fee</u> - The fees payable to the Manager as set forth in Article IV hereof.

<u>Offering</u> - The private placement memorandum of the Owner that may be used to raise equity investment proceeds from foreign national investors pursuant to an EB-5 Private Placement Offering (the "EB-5 Offering"), and/or other investors via conventional investment banking efforts.

<u>Project</u> - The construction, financing, development and operation of a 229 unit, residential apartment building of approximately 543,936 square foot upon the Hollywood, Florida property (known as "Block 40, City of Hollywood Plat Book B, page 21 of the Public Records of Broward County, Florida) in accordance with plans of Fullerton Diaz. It is currently contemplated the Project will be marketed under the name "Young Circle Commons" and that it will be financed all or in part by the Offering and/or HUD Financing, and/or conventional investment banking efforts.

**<u>ARTICLE II</u>** 

**<u>TERM</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1 <u>Term.</u> The term of this Agreement shall commence on the date hereof and shall continue for so long as the Owner owns or controls the Project or has the authority or right to appoint the persons who will operate, manage or supervise the Project (including upon and after its completion), including persons performing property management, leasing agency and similar services.

**<u>ARTICLE III</u>**

**<u>MANAGEMENT AUTHORITY</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1 <u>Authority and Duty of Manager.</u> The Manager shall have the sole and exclusive right and obligation to manage the development, investment, supervisory, accounting and administrative functions in connection with the operation of the Project as agent on behalf of Owner pursuant to the terms of this Agreement. In connection therewith, Manager shall have the authority and responsibility to determine operating policy and any other matters affecting operations and management related to the Project.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Manager shall insure that monies are properly received, disbursed, and accounted for whether into the Owner's accounts or any escrow accounts required by any Disbursement Agreement, or other capital raise or loan agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Manager shall administer any and all Disbursement Agreements and/or loan agreements and ensure that proper reporting is provided as required by said agreements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Manager shall provide financial reporting and tax reporting to the members and taking primary responsibility for causing the partnership tax return of the Owner to be filed on an annual basis. The tax return will be prepared by, and related tax services will be provided by, a certified public accounting firm handling all tax matters on behalf of the Owner. The Manager shall not have any responsibility for filing any tax returns on behalf of the members of the Owner.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2 <u>Delegation of Authority by Manager.</u> Manager shall be specifically authorized to delegate authority to other persons, including Affiliates of the Manager, to perform the following services:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Disbursement and other services in connection with an Offering pursuant to a Disbursement Agreement as long as the consideration for industry standard charges.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Tax services may be provided by an accounting firm selected by the Manager for industry standard rates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Legal services in connection with the any real estate transactions as well as any other matters for which the Manager needs to seek legal counsel on behalf of the Owner.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3 <u>Additional Responsibilities ofManager.</u> Manager shall, as agent of Owner, either in its own name, or in the name of Owner, perform the following additional services, or cause the same to be performed for the Project:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Enter into such contracts for the furnishing of administrative services related to the Project, as shall be reasonably necessary for the proper operation thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Apply for, and use its best efforts to obtain and maintain all licenses and permits required of the Owner or Manager in connection with the operation of the Project. Owner agrees to execute and deliver any and all applications and other documents as shall be reasonably required and to otherwise cooperate, in all reasonable aspects, with Manager in applying for, obtaining and maintaining such licenses and permits.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Use its reasonable best efforts to do, or cause to be done, all such acts and things in and about the Project as shall be reasonably necessary to comply with Legal Requirements.

**<u>ARTICLE</u> <u>IV</u>**

<u>**MANAGEMENT FEES AND OVERHEAD EXPENSES**</u>

Manager is entitled to the following fees (the "Management Fees")

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Loan Guarantee Fees equal to 1.5% of any debt outstanding from time to time, to which principals, executives or affiliates of the Manager have provided loan guarantee(s). These guarantees and this fee shall survive any termination of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Commission override of 0.5% of total real estate sales and leases involving all Project units and other areas.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Asset management fee of 1.0% per annum of total market value of Project.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. A monthly overhead reimbursement and administrative fee equal to $120,000 per month.

The Management Fees shall be paid by the Owner to the Manager in such periodic installments or other times as determined by agreement of the Owner and the Manager. The Owner shall assure that the Management Fees are included in the Company's Budget and that sufficient funds are set aside or reserved for their payment of the same on a timely basis for a period of three

&nbsp;&nbsp;&nbsp;&nbsp;(3) years. The Owner will be promptly pay any and all outstanding and accrued accounts payable of Owner/ Company.

**<u>ARTICLE</u> <u>V</u>**

<u>**ACCOUNTS; WORKING FUNDS; RECORDS AND REPORTS**</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1 <u>Bank Accounts.</u> Bank accounts for the Project will be established at a banking institution or institutions approved by Manager, such accounts to be in the Owner's name. Manager will deposit in such bank accounts all monies furnished by Owner and all monies received from the operation of the Project and shall disburse the same for the purposes set forth in the following Section 5.2.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2 <u>Expenditures.</u> From the Owner's bank accounts, Manager is hereby authorized to pay such amounts and at such times as required in connection with the ownership, construction, development, maintenance and operation of the Project and related facilities, including, without limitation, the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. All fees, costs and expenditures incurred or made in connection with the services of Manager, and its authorized agents, contractor s and delegates, performed within the scope of this Agreement, and all other expenditures which Manager is permitted or required to make under any provision of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Premiums for any insurance maintained by Manager.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. The Management Fees computed in accordance with the provisions of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. All approved offering expenses.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. All construction and development expenses as set forth in the Budget.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3 <u>Books and Records.</u> Manager shall keep or cause to be kept full and adequate books of account and such other records as are necessary to reflect the results of the construction, development and operation of the Project. For this purpose, Owner agrees that it will make available to Manager, or its representatives, all books and records, including contract documents, invoices and all other records pertaining to the Project. The books and records for the Project shall be maintained in accordance with generally accepted accounting principles consistently applied, or such other accounting method(s) as the Owner and Manager agree upon from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.4 <u>Reports to Owner.</u> Manager shall deliver, or cause to be delivered, to Owner the following statements:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Within thirty (30) days after the end of each calendar quarter, a detailed financial report, showing the results of operation of the Project for such month and year to date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Within ninety (90) days after the expiration of each calendar year, a balance sheet, a related statement for profit and loss as of December 31'', each year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.5 <u>Return of Escrowed Funds in Offering.</u> If the Company engages in an EB-5 or any other kind of Offering, the Manager is obligated to cause escrowed funds to be returned to investors ifthe Offering funding conditions are not met as set forth in the prospectus, subscription agreement or other Offering materials. For the avoidance of doubt, this would include EB-5 investors to the extent they do not qualify for residency status pursuant to the I-526 application.

**<u>ARTICLE VI</u>**

**<u>INDEMNIFICATION PROVISIONS</u>**

To the fullest extent permitted by applicable law, the Manager, and each of its managers, officers, employees, agents and other persons under its supervision who are performing services for or on behalf of the Owner or the Manager within the scope of this Agreement (each a "Covered Person") shall be entitled to indemnification from the Owner for any loss, damage or claim incurred by such Covered Person by reason of any act or omission performed or omitted by such Covered Person within the scope of this Agreement, provided that: (i) any such action was undertaken in good faith on behalf of the Owner or the Manager and in a manner reasonably believed to be in, or not opposed to, the best interests of the Owner, (ii) any such action was reasonably believed to be

within the scope of authority conferred on such Covered Person by this Agreement, and (iii) with respect to any criminal action or proceeding, such Covered Person had no reasonable cause to believe his action or omission was unlawful; provided further, that no Covered Person shall be entitled to be indemnified in respect ofany loss, damage or claim incurred by such Covered Person by reason of gross negligence or willful misconduct with respect to such acts or omissions. To the fullest extent permitted by applicable law, expenses (including legal fees) incurred by a Covered Person in defending any claim, demand, action, suit or proceeding shall, from time to time, be advanced by the Owner prior to the final disposition of such claim, demand, action, suit or proceeding upon receipt by the Owner of an undertaking by or on behalf of the Covered Person to repay such amount if it shall be determined that the Covered Person is not entitled to be indemnified under the foregoing provisions.

<u>**ARTICLE VII**</u>

<u>**TERMINATION RIGHTS**</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1 <u>Termination by Owner.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Subject to Section 7.3, if Manager shall be in material breach of the provisions of this Agreement, and such default shall continue for a period of thirty (30) days after notice thereof by Owner to Manager, then Owner shall have the right to terminate this Agreement upon written notice to Manager given at any time following the occurrence of such event, or if an additional grace period is provided beyond such 30-day period, then following the expiration of such grace period. Any such termination shall be effective upon the date specified in such written notice, which date shall not be less than fifteen (15) days nor more than sixty (60) days after the date of the giving of such notice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Owner shall also have the right to cancel this Agreement for any reason, upon thirty (30) days written notice to Manager, subject to a break fee equal to twelve (12) months of fees provided for herein, but in no event shat the guarantee fee be terminated as long as the loan is outstanding and the loan guarantees are in place.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2 <u>Termination by Manager.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Subject to Section 7.3, if Owner shall fail to keep, observe or perform any material covenant, agreement, term or provision of this Agreement to be kept, observed or performed by Owner, and such default shall continue for a period of thirty (30) days after notice thereof by Manager to Owner, then Manager shall have the right to tenninate this Agreement upon written notice to Owner given at any time following the occurrence of such event, or if an additional grace period is provided beyond such 30-day period, then following the expiration of such grace period. Any such termination shall be effective upon the date specified in such written notice, which date shall not be less than thirty (30) days nor more than sixty (60) days after the date of the giving of such notice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. If Owner shall apply for or consent to the appointment of a receiver, trustee or liquidator of Owner or of all or a substantial part of its assets, file a voluntary petition in bankruptcy or admit in writing its inability to pay its debts as they come due, make a general assignment for the benefit of creditors, file a petition or an answer seeking reorganization or arrangement with creditors or to take advantage of any insolvency law, or file an answer admitting the material allegations of a petition filed against Owner in any bankruptcy, reorganization or insolvency proceeding, or ifan order,judg m ent or decree shall be entered by any court of competent jurisdiction, on the application of a creditor, adjudicating Owner a bankrupt or insolvent or approving a petition seeking reorganization of Owner or appointing a receiver, trustee or liquidator of Owner or of all or a substantial part of the assets of Owner, and such order, judgment or decree shall continue unstayed and in effect for any period of sixty (60) consecutive days, then Manager shall have the right to terminate this Agreement upon written notice to Owner given at any time following the occurrence of such event, or if a period of grace is provided, then following the expiration of the applicable grace period. Any such termination shall be effective upon the date specified in such written notice, which date shall not be less than thirty (30) days nor more than sixty (60) days after the date of the giving of such notice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Manager shall also have the right to cancel this Agreement for any reason, upon thirty (30) days written notice to Owner.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3 <u>Curing Defaults.</u> Any default by Manager under clause Section 7.1.a. or Owner under Section 7.2.a., as the case may be, which is susceptible of being cured, shall not constitute a basis of termination if the nature of such default shall not permit it to be cured within the 30-day period specified in such section (and such additional grace period that may be allotted by the other party); provided that promptly after being notified in writing ofthe default the defaulting party shall have commenced to cure such default and shall proceed to complete the same with reasonable diligence.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4 <u>Effect of Termination.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. The termination of this Agreement under the provisions of this Article 7 shall not affect the rights of the terminating party with respect to any damages it has suffered as a result of any breach of this Agreement, nor shall it affect the rights ofeither party with respect toliability or claims accrued, or arising out of events occurring, prior to the date of termination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. For the avoidance of doubt, and without limiting any remedies or claims for damages that may be available to the Manager or the Owner, any accrued Management Fees remaining unpaid as of the date of termination shall be immediately paid to the Manager at the time of termination, irrespective of which party terminates this Agreement and irrespective of the grounds for termination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Notwithstanding anything in this Agreement to the contrary, if the Owner terminates this Agreement (or the terminates, suspends or otherwise discontinues the services of the Manager) for any reason other than as set forth in Section 7.1.a., then the Manager shall be entitled to receive: (i) one hundred percent (100%) of the same Management Fees it would have been entitled to receive had no termination occurred, the payment of which shall be made to Manager or its designee(s) for a period of ninety (90) days following the effective date of such termination, and (ii) for a period of three (3) years thereafter, sixty percent (60%) of the same Management Fees it would have been entitled to receive had no termination occurred, the payment of which shall continue to be made to Manager or its designee(s) immediately following the 90-day period in clause (i) above. The continuing Management Fees described in this subsection shall be calculated and paid on monthly basis throughout the 90-day and 3-year terms described above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.5 <u>Remedies Cumulative.</u> Neither the right of termination nor the right to sue for damages nor any other remedy available to either party hereunder shall be exclusive of any other remedy given hereunder or now or hereafter existing at law or in equity.

**<u>ARTICLE VIII</u>**

**<u>ASSIGNMENTS</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.1 <u>Assignment by Manager.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. <u>Prohibited Assignments.</u> Except as provided in the following Subsection b, Manager shall not assign this Agreement without the prior written consent of Owner. The disposition by Manager of its controlling interest in any Affiliate, to which it has previously assigned this Agreement, shall be deemed to be a prohibited assignment hereunder requiring the prior written consent of Owner. It is understood and agreed that any consent granted by Owner to any such assignment shall not be deemed a waiver of the covenant contained against assignment in any subsequent case.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>b. Permitted Assignments.</u> Manager, without the consent of Owner, shall have the right to assign this Agreement to any Affiliate of Manager, or to any entity which may become an Affiliate as a result of a related and substantially concurrent transaction, or to any successor or assign of Manager which may result from any merger, consolidation or reorganization involving Manager, or to a corporation or other entity which shall acquire all or substantially all of the business and assets of Manager, or to any company or entity which shall succeed to that portion of Manager's business which consists of managing and operating the Project. Upon execution of any assignment as aforesaid, notice thereof in the form of a duplicate original of such assignment shall be delivered to Owner forthwith, and thereupon, except in the case of an assignment to an Affiliate of Manager, Manager shall be released of all of its covenants and liabilities hereunder, other than liabilities accruing, or based upon events occurring prior to the date of the delivery of such duplicate original to Owner; provided, however, that such release shall be contingent upon the concurrent delivery to Owner of an appropriate instrument whereby the assignee shall assume all of the obligations of Manager hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.2 <u>Successors and Assigns.</u> Subject to the foregoing, this Agreement shall inure to the benefit of and be binding upon the parties hereto, their respective heirs, legal representatives, successors and assigns.

**<u>ARTICLE IX</u>**

**<u>INTELLECTUAL PROPERTY</u>**

Owner acknowledges that Manager or will be permitted to utilize the intellectual property of the Project including (i) software in use at one or more other Project locations and all source and object code versions thereof and all related documentation, flow charts, user manuals, listing, and service/operator manuals and any enhancements, modification, or substitutions thereof, and (ii) trade names, trademarks, trade secrets, know-how and other proprietary information relating to the operating methods, procedures and policies distinctive to Project. Manager shall utilize the intellectual property in connection with the operation of the Project to the extent that it deems appropriate for the purpose of carrying out its agreements and obligations hereunder.

**<u>ARTICLE X</u>** 

**<u>GENERAL PROVISIONS</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1 <u>Owner Instmctions and Decisions.</u> Any instructions or decisions to be made by the Owner under this Agreement shall be made by its "Management Committee" (or its successor manager) in accordance with the Owner's operating agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.2 <u>Notices.</u> Except as otherwise provided in this Agreement, all notices, demands, requests, consents, approvals and other communications (herein collectively called "Notices") required or permitted to be given hereunder, or which are to be given with respect to this Agreement, shall be in writing sent by registered or certified mail, postage prepaid, return receipt requested, addressed to the party to be so notified as follows:

Ifto Owner: BLOCK 40, LLC

c/o FAVO Capital Attn:

Ifto Manager: GCF Development, LLC

1776 Polk Street

Suite 200

Hollywood, FL 33020

Attn: Charles (Chip) R. Abele, Jr.

Any Notice shall be deemed delivered upon receipt. Either party may at any time change the addresses for Notices to such party by mailing a Notice as aforesaid. Notices may also be delivered by (i) hand, (ii) special courier, or (iii) telegram, telex or other electronic written communication, provided that in utilizing any form of delivery authorized by clause (iii) of this sentence, receipt of such notice must be acknowledged by the addressee through appropriate written communication.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.3 <u>No Lease, Partnership or Joint Venture.</u> Nothing contained in this Agreement shall be construed to be or create a lease, partnership or joint venture between Owner, its successors or assigns, on the one part, and Manager, its successors and assigns, on the other part.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.4 <u>Modification and Changes.</u> This Agreement cannot be changed or modified except by another agreement in writing signed by the party sought to be charged therewith, or by its duly authorized agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.5 <u>Understandings and Agreements.</u> This Agreement constitutes all of the understandings and agreements of whatsoever nature or kind existing between the parties with respect to Manager's management of the Project. The parties hereby acknowledge, represent and agree that in entering into this Agreement, they are not relying upon any statement, representation or promise, or the failure to make any statement, representation or promise, of any other party (or of any officer, agent, employee, representative or attorney for any other party), in executing this Agreement except as expressly stated herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.6 <u>Headings.</u> The Article and Section headings contained herein are for convenience and reference only and are not intended to define, limit or describe the scope or intent of any provision of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.7 <u>Consents.</u> Each party agrees that any provision of this Agreement which permits such party to make requests of the other party shall not be construed to permit the making of unreasonable requests.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.8 <u>Survival of Covenants.</u> Any covenant, term or provision of this Agreement which, in order to be effective, must survive the termination of this Agreement, shall survive any such termination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.9 <u>Jurisdiction.</u> This Agreement shall be governed by the laws of the State of Florida, and jurisdiction for any action arising hereunder shall be Broward County, Florida.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.10 <u>Counterparts and Facsimile Copies.</u> This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, and facsimile copies shall be deemed originals.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.11 <u>Waiver of Jury Trial.</u> THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY AND ALL RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION (INCLUDING, BUT NOT LIMITED TO, ANY CLAIMS, CROSS CLAIMS OR THIRD PARTY CLAIMS) ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS LOAN AGREEMENT AND THE OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREIN. THE PARTIES HEREBY CERTIFY THAT NO REPRESENTATIVE OR AGENT OF THE MANAGER NOR THE MANAGER'S COUNSEL HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE BANK WOULD NOT, IN THE EVENT OF SUCH LITIGATION, SEEK TO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL PROVISION.

**[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]**

The undersigned have signed this Management Agreement as of the date set forth above.

**OWNER:**

**BLOCK 40, LLC**

a Florida limited liability company

By:

Name:

Title:

**MANAGER:**

**GCF DEVELOPMENT, LLC**

a Florida limited liability company

By:

Name:<u> </u>

Title:

**Schedule 3.l(b):** 

**Operating Permits**

**None.**

**Schedule 3.6** 

**Property**

**Owned Real Property**

None.

**Leased Real Property**

None.

**Schedule 3.7**

**Intellectual Property**

**Owned Intellectual Property**

None.

**Licensed Intellectual Property**

None.

**Open Source Materials**

None.

**Schedule 3.9** 

**Consents**

Blackstone Inc or its Affiliate, as successor in interest to Deutsche Bank pursuant to that certain Loan Agreement dated June I, 2022 between Block 40 Property, LLC and Deutsche Bank AG, New York Branch, as amended.

**Schedule 3.10**

**Employee Benefits and Labor Matters**

**Employee Benefit Plans**

None.

**Employment Agreements**

None.

**Labor Matters**

None.

**Schedule 3.11** 

**Litigation**

On August 11, 2022, A&J Capital, Inc. ("A&J") filed an arbitration claim against the Company's subsidiary, Block 40, LLC ("Block 40") seeking damages for breach of the parties' Services Agreement. Block 40 defended the claim on a number of grounds, arguing that the conversion of a related entity, Hollywood Circle, LLC to a Delaware corporation terminated the need for the services as of the conversion date, and therefore, the only fees owed were up to the date ofthe conversion. On July 31, 2024, an arbitration panel entered a corrected final arbitration award ("Award") in favor of A&J and against Block 40 in the amount of$555,607.09 as of February 29, 2024, which amount continues to accrue interest at the per diem rate of $736.99 plus continuing prejudgment interest thereon at the per diem rate of $130.26 until fully satisfied. On August 23, 2024, A&J filed a petition in Broward County, Florida, CACE-24-01257, seeking to confirm the Award and to enter a judgment against Block 40 for all sums in the Award. In the Broward County proceedings on October 22, 2024, Block 40 timely filed its answer to A&J's petition and its own counterpetition seeking to set aside the Award, which remains pending.

**Schedule 3.14** 

**Licenses**

None.

**Schedule 3.15**

**Iutercompany and Affiliate Transactions; Insider Interests**

&nbsp;&nbsp;&nbsp;&nbsp;1. Management Agreement dated June 21, 2013 between Block 40, LLC and Block 40 Managers, LLC

&nbsp;&nbsp;&nbsp;&nbsp;2. Amended and Restated Management Agreement dated June 19, 2020 between Block 40, LLC and Block 40 Managers, LLC

**Schedule 3.16**

Insurance

None.

**Schedule 5.3**

**Mauagement and Employment Agreements**

 **Employment Agreements**

---

| | | | |
|:---|:---|:---|:---|
| **Employee Name** | **Position** | **Agreement Date** | **Key Terms** |
| Charles R Abel, Jr. | CEO | July 11, 2025 | To be negotiated |
| Peter Jago | VP | July 11, 2025 | To be negotiated |

---

## Exhibit 2.11

**MEMBERSHIP INTEREST PURCHASE AGREEMENT**

This Membership Interest Purchase Agreement (this "**Agreement**") is entered into as of July 11, 2025, by and among **Hollywood Circle Capital, LLC**, a Florida limited liability company (the "**Seller**"), **Favo Capital, Inc**., a Nevada corporation ("**Buyer**"), and **Block 40, LLC**, a Florida limited liability company (the "**Company**").

**Recitals**

**WHEREAS**, Seller owns that certain HC Priority Interest (referred to herein as the "**Membership Interests**") in the Company, as described in the Company's Eighth Amended and Restated Operating Agreement (the "**Operating Agreement**") and as acquired pursuant to a Subscription Agreement Seller entered with the Company on or about June 19, 2020, and the Company, together with its wholly owned subsidiaries, operates a mixed use real estate development in Hollywood, Broward County, Florida known as "Block 40" (the "**Business**").

**WHEREAS**, Seller desires to sell and Buyer desires to acquire the Membership Interests as provided herein (the "**Transaction**"), with the Business of the Company continuing as a wholly-owned subsidiary of Buyer.

**NOW, THEREFORE**, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

**ARTICLE 1<br> Definitions**

For purposes of this Agreement, the following terms shall have the meanings set forth below:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) "**Affiliate**" shall have the meaning ascribed to such term in Rule 405 under the Securities Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) "**Allocation Schedule**" means the schedule attached hereto as <u>Exhibit A</u>, setting forth, with respect to the Seller, (a) the total number of shares of Buyer Common Stock to be issued to such Seller at Closing and (b) the dollar value of such shares based on the agreed-upon valuation, in each case as of the Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) "**Business Day**" means any day other than a Saturday, Sunday, or a day on which banks in Florida or Nevada are authorized or required by law to close.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) "**Closing Date**" means the date on which the Closing occurs as provided in Section 1.2.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) "**Governmental Entity**" means any supra-national, national, state, municipal, or local government (including any subdivision, court, administrative agency, competent authority, notified body, commission, or other authority thereof) or any quasi-governmental body exercising any regulatory, taxing, importing, or other governmental or quasi-governmental authority.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) "**Knowledge**" means, with respect to Seller, (i) the actual knowledge of Charles R. Abele, Jr. and Peter Jago, and (ii) what any of such named individuals would be reasonably expected to know upon the exercise of reasonable inquiry of the management members of Seller who would customarily have knowledge of the matter at issue and, with respect to Buyer, (i) the actual knowledge of the senior management personnel of Buyer and (ii) what such personnel would be reasonably expected to know upon the exercise of reasonable due inquiry.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) "**Material Adverse Effect**" shall mean (a) a material adverse effect on the financial condition, properties, business, or results of operations of the Company or Buyer, as applicable, taken as a whole, or (b) a material adverse effect on the ability of the Company or Buyer to perform its respective material obligations under this Agreement; provided, however, that a Material Adverse Effect shall not include any event, change, effect, development, condition, or occurrence arising out of or relating to (i) general economic or political conditions in the United States of America, or general regulatory, financial, banking, credit or securities market conditions, including any disruption thereof and any interest or exchange rate fluctuations, (ii) conditions generally applicable to the industry in which the Company operates, (iii) the announcement of this Agreement or the transactions contemplated hereby (<u>provided</u>, that any such announcement made by a Seller or the Company is made in accordance with the terms of this Agreement), (iv) resulting from any changes in applicable Laws or accounting rules or interpretations thereof, (v) resulting from natural disasters, acts of terrorism or war (whether or not declared), or epidemics or pandemics or (vi) arising out of any action taken or omitted to be taken at the written request of Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) "**Permitted Liens**" means (a) Liens for Taxes, fees, assessments and other charges of Governmental Entities not due and payable as of the Closing Date, which remain payable without penalty as of the Closing Date, or which are being contested in good faith by appropriate proceedings and for which adequate reserves are established in the Financial Statements (or, if arising after the date of the Financial Statements, the relevant financial records of the Company and its Subsidiaries made available to Buyer prior to the Closing Date), (b) materialmens', mechanics', workmens', landlords', repairmens', warehousemen', carriers' and other similar Liens arising or incurred in the ordinary course of business or by operation of Law, in each case, if the underlying obligations are not delinquent or are being challenged in good faith pursuant to appropriate proceedings and for which adequate reserves are established in the Financial Statements (or, if arising after the date of the Financial Statements, the relevant financial records of the Company and its Subsidiaries made available to Buyer prior to the Closing Date), (c) statutory Liens for landlords for amounts which are not yet due and payable, (d) rights, easements, covenants, conditions, restrictions and other similar matters of record affecting title to the Leased Real Property which do not or would not materially impair the use or occupancy of the Leased Real Property in connection with the operation of the business conducted thereon, (e) Liens consisting of pledges or deposits required in the ordinary course of business in connection with workers' compensation, unemployment insurance and other social security legislation or to secure liability to insurance carriers, (f) Liens on any property acquired or held by the Company or any of its Subsidiaries, securing indebtedness incurred or assumed by a party for the purpose of financing (or refinancing) all or any part of the cost of the Company's or any of its Subsidiaries' acquisition of property, which indebtedness is recorded on the Financial Statements (or, if arising after the date of the Financial Statements, the relevant financial records of the Company and its Subsidiaries made available to Buyer prior to the Closing Date), (g) any interest or title of a lessor or sublessor, as lessor or sublessor, under any lease and any precautionary uniform commercial code financing statements filed under any lease, and (h) non-monetary imperfections of title which are not material in character, amount or extent and which do not materially detract from the use, occupancy or value of, or materially interfere with the Company's or its applicable Subsidiary's present, or their prospective, use of the assets subject thereto or affected thereby, Liens disclosed on the face of the Financial Statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) "**Person**" means any individual, corporation, company, partnership, trust, incorporated or unincorporated association, joint venture, or other entity of any kind.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) "**Transaction Documents**" means this Agreement and all other agreements, instruments, and documents to be executed and delivered by the Company, Seller, or Buyer in connection with the transactions contemplated hereby.

**ARTICLE 2<br> Sale and Purchase of Membership Interests; Closing.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.1 <u>Sale and Purchase</u>**. On the Closing Date (as hereinafter defined), Seller shall sell to Buyer, and Buyer shall purchase from Seller, the Membership Interests for the Purchase Price (as defined in Section 2.3).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.2 <u>Closing Date</u>**. The consummation of the transactions contemplated hereby (the "**Closing**") will take place at the offices of the Company at 10:00 AM local time on the date hereof or such other date and time that is agreed to in writing by the Company and Buyer (the "**Closing Date**"), provided that all conditions set forth in Article 6 have either been satisfied or, in the case of conditions not satisfied, waived in writing by the party entitled to the benefit of such conditions. The Closing may be conducted remotely by electronic exchange of documents and signatures. At the Closing, Seller shall deliver, or cause to be delivered, to Buyer or its designees an membership interest transfer powers transferring to Buyer good title to the Membership Interests, free and clear of any liens, pledges, options, security interests, trusts, encumbrances, or other rights or interests of any person or entity, and Seller shall be responsible for any transfer, documentary, or similar taxes attributable to such transfer of the Membership Interests, and Buyer shall thereupon pay to Seller the Purchase Price.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.3 <u>Purchase Price</u>**. The Purchase Price shall be payable on a pro rata basis to the Seller as follows: 40,374,814 shares of common stock in Buyer valued by the parties at $0.76 per share the "**Equity Consideration**"). The Buyer and Seller mutually agree that the value for the shares of Buyer shall be as stated above. The parties acknowledge and agree that this price is determined solely by their mutual consent and is not based on any formal valuation, appraisal, or independent assessment of Buyer's financial condition, market value, or other economic factors. The parties further agree that they have independently evaluated the transaction and are not relying on any representations or warranties regarding the value of the shares beyond their mutual agreement as set forth herein. At Closing, Buyer shall deliver the Purchase Price in the form of stock certificates or book-entry shares, as applicable, registered in the names of the Seller in the proportions set forth on Schedule 1.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.4 <u>Adjustments to the Purchase Price</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Within thirty (30) days following the closing of this transaction, Buyer and Seller will agree on the selection of and engagement of a qualified appraiser to establish the market value of the election of the Property and the Business to confirm that the price is supported by the market. IF the appraiser determines that the value is less than the Purchase Price then Buyer may adjust the Purchase Price by an amount not to exceed the number of shares held in escrow pursuant to paragraph 2.6 below. In the event the parties cannot agree on and engage an appraiser within said thirty (30) day period then each party will engage an appraiser of their election and within sixty (60) the appraiser will agree on the value or the parties will utilize the average of the two appraisals as the agreed market value for purposes of this paragraph.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Within thirty (30) days following the closing of this transaction, Buyer and Seller will each engage certified public accounting firms to investigate the requirement of Buyer to covert any portion of the Purchase Price to goodwill and write same off within a one year period. The CPA will reach a consensus or they will jointly select the third and that CPA's opinion will control. If the final opinion is that there is a required goodwill write off within a one year period then Buyer shall receive a credit to the Purchase Price up to a maximum credit of $4,017,858 via stock in the Escrow per 2.6 below and not to exceed the stock held in that Escrow.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.5 <u>Required Cash</u>**. The Company shall have cash as of the Closing Date (the "**Closing Date Cash**") in an amount equal to or greater than $100,000 (the "**Required Cash Amount**"). On or before thirty (30) days following the Closing Date, the Purchase Price shall be either (a) increased in the amount by which the Closing Date Cash exceeds the Required Cash Amount, if any, or (b) decreased in the amount by which the Closing Date Cash is less than the Required Cash Amount, if any, with such adjustment payable in cash (or, at the election of Seller's Representative, as Equity Consideration) to Buyer or Seller, as the case may be.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.6 <u>Deliveries at Closing by Seller and the Company</u>**. At the Closing, and upon satisfaction or waiver of the conditions set forth in Sections 6.1 and 6.3, each of the Seller and the Company will deliver or cause to be delivered the instruments, consents, certificates, and other documents required of each of them by Section 6.2.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.7 <u>Deliveries at Closing by Buyer</u>**. At the Closing, and upon satisfaction or waiver of the conditions set forth in Sections 6.1 and 6.2, Buyer will deliver or cause to be delivered the instruments, consents, certificates, and other documents required of it by Section 6.3.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.8 <u>Allocation Schedule</u>**. The Seller hereby acknowledges and agrees that (i) the Allocation Schedule is complete and accurate in all respects and shall govern the allocation among the Seller (and shall not serve as a limitation as to Buyer's rights under this Agreement) of all payments to or from the Seller that are contemplated by this Agreement in accordance with the priorities set forth in the Operating Agreement (as in effect on the date of this Agreement), (ii) the amounts set forth in the Allocation Schedule for distribution to such Seller are in compliance with the Operating Agreement, (iii) the consideration payable to such Seller as set forth in the Allocation Schedule constitutes all consideration payable to such Seller in connection with the consummation of the Transaction and (iv) after the Closing, such Seller (and any direct or indirect holder of Membership Interests of such Seller) will have no right, title or interest in or to any other payment in consideration of the Membership Interests, Buyer or any of their respective Affiliates. The Company and the Seller acknowledge and agree that to the extent any allocation of payments provided for in this <u>Section 2.8</u> or in the Allocation Schedule is inconsistent with the Operating Agreement, then this Agreement, together with the Allocation Schedule, shall be deemed to be an amendment to the Operating Agreement, properly authorized and adopted pursuant to the provisions of the Operating Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.9 <u>Consent to Transactions</u>**. Seller and the Company hereby consent to the transfers of the equity interests of the Company contemplated herein and the payment of the other amounts contemplated herein in compliance with the terms of this Agreement and the other Transaction Documents, and irrevocably waive any Liens or restrictions on transfer arising under the Operating Agreement in favor of such Person relating to Seller's equity securities of the Company or its Subsidiaries and any other rights such Person may have arising from or relating to such transfers (including any rights of first refusal, co-sale or similar rights and any rights to receive notices, opinions or similar documentation in advance of or in connection with such transfers or contributions) or such payments, whether arising pursuant to the Operating Agreement, any other Organizational Documents of the Company or any of its Subsidiaries, any agreement pursuant to which any such equity securities were issued or pursuant to applicable Law; <u>provided</u>, <u>that</u> this waiver shall not affect any rights any such party may have against the other Parties under this Agreement or under any other Transaction Documents.

**ARTICLE 3<br> Representations and Warranties of Seller.**

References in this Article 3 to "Seller' Knowledge" are as defined in Section 1. Except as set forth in the Disclosure Schedules, which shall disclose exceptions to the representations and warranties organized according to the corresponding sections of this Agreement, the Seller represents and warrants to Buyer that as of the date hereof:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.1 <u>Organization and Good Standing</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company is a limited liability company duly organized, validly existing, and in good standing under the laws of the State of Florida, with full limited liability company power and authority to carry on the Business as it is now and has since its organization been conducted, and to own, lease, or operate its assets and properties. The Company is duly qualified to do business and is in good standing in every jurisdiction in which the character of the properties owned or leased by it or the nature of the business conducted by it makes such qualification necessary, except where failure to be so qualified would not have a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Aside from Block 40, LLC and Block 40 Property, LLC, the Company has no subsidiaries and does not otherwise hold any equity, membership, partnership, joint venture, or other ownership interest in any Person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Company has made available to Buyer a true and correct copy of the articles of organization and operating agreement of the Company, each as amended to date (collectively, the "**Charter Documents**"). The Company is not in material violation of any of the provisions of its Charter Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.2 <u>Ownership of Membership Interests</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Seller owns the Membership Interests free and clear of all liens, encumbrances, security interests, pledges, conditional or installment sale agreements, mortgages, charges, and/or any other claim of third parties of any kind (collectively "**Liens**"). After giving effect to the transactions contemplated by this Agreement, Buyer will own 100% of the Membership Interests, which constitute 5.4% of the issued and outstanding equity interests of the Company. All of the Membership Interests have been, and will be at the Closing, duly authorized, validly issued and outstanding, and fully paid. Aside from the remaining 94.6% of the membership interests in the Company, which are held by Block 40 Managers, LLC and Block 40 Investments Holdings, LLC, and which will be sold to the Buyer in separate agreements, the Company has not granted, issued, or agreed to grant or issue and/or will grant, issue, or agree to grant or issue any other equity interest in the Company and there are no, nor will there be at the Closing, outstanding options, warrants, subscription rights, securities that are convertible into or exchangeable for, or any other commitments of any character relating to, any equity interest in the Company (collectively "**Equity Rights**"). No Membership Interests are, or will be at the Closing, subject to any right of first refusal, preemptive, subscription, or other similar right under any provision of Applicable Law or any agreement (collectively "**Preemptive Rights**"). There are no voting restrictions or restrictions on transfer of the Membership Interests (collectively "**Restrictions**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) There are no obligations, contingent or otherwise, of the Company to repurchase, redeem, or otherwise acquire any of the Membership Interests or to make any investment (in the form of a loan, capital contribution, or otherwise) in any Person. The Company does not own or control any equity security or other interest of any other Person. The Company is not a party to any agreement (i) requiring it to acquire any securities or ownership interests in any Person; and/or (ii) requiring it to make any investment in and/or to fund in any manner any Person. Since its inception, the Company has not consolidated or merged with, acquired all or substantially all of the assets of, or acquired the stock of or any interest in any Person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Upon consummation of the transactions contemplated hereby at the Closing, Buyer will own the Membership Interests free and clear of all Liens, Equity Rights, Preemptive Rights, and/or Restrictions, except any made by Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.3 <u>Authorization of Agreement</u>**. The Company and Seller have all requisite limited liability company power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. This Agreement and all other agreements and instruments to be executed by the Company and Seller in connection herewith (as defined in Section 1) have been duly and validly approved by the Managers and the members of the Company and Seller (the "**Authorizing Parties**") and no other proceedings on the part of the Company or Seller is necessary to approve this Agreement and to consummate the transactions contemplated hereby or thereby. This Agreement and the other Transaction Documents to be delivered by the Company have been (or upon execution will have been) duly executed and delivered by the Company and Seller, have been effectively authorized by all necessary action, corporate or otherwise, and assuming the assuming the due authorization, execution and delivery of each such Transaction Document by each of the other parties thereto, constitute (or upon execution will constitute) legal, valid, and binding obligations of the Company and Seller, enforceable in accordance with their respective terms, except as such enforceability may be limited by general principles of equity and bankruptcy, insolvency, and other similar laws relating to creditors' rights (the "**Bankruptcy Exception**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.4 <u>Title to Assets</u>**. The Company is the lawful owner of each of the tangible assets, whether real, personal, mixed, comprising and employed in the operation of or associated with the Business, other than those Assets which the Company leases, in which case the Company has a valid leasehold interest in such Assets. The Assets owned and/or leased by the Company (collectively the "**Assets**") include all of the properties and other assets necessary for the Company to conduct the Business in the manner presently conducted and as currently contemplated to be conducted. The Assets are free and clear of all liens, mortgages, pledges, security interests, restrictions, prior assignments, encumbrances, and claims of any kind, except for Permitted Liens. There are no outstanding agreements, options, or commitments of any nature obligating the Company to transfer any of the Assets or rights or interests therein to any party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.5 <u>Financial Condition and Accounting</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) **<u>Financial Statements</u>**. The Buyer is in possession of the balance sheet of the Company, as of December 31, 2024, and the related statements of income and cash flows for two years ended December 31, 2024 and 2023 and the same financial statements for the interim period ended March 31, 2025 (collectively, the "**Financial Statements**"). The Financial Statements present fairly the financial condition and position and operating results of the Company as of the respective dates thereof and for the periods therein indicated.

The Financial Statements reflect the consistent application of accounting principles throughout the periods incurred. The Financial Statements (i) were prepared in accordance with the books and records of the Company; and (ii) were prepared in accordance with generally accepted accounting principles ("**GAAP**") consistently applied. The books and records of the Company are being maintained in accordance with applicable legal and accounting requirements in all material respects and as necessary to permit the preparation of financial statements in accordance with GAAP and to maintain asset accountability. To Seller' Knowledge, the Financial Statements do not omit any material liabilities, contingent or otherwise, not reflected or reserved against therein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) **<u>Absence of Certain Changes</u>**. Since June 30, 2025, there has not been (i) any material change in the assets, liabilities, financial condition, or operations of the Company, other than changes in the ordinary course of business; (ii) any declaration, setting aside, or payment of any dividend or distribution in respect of the Membership Interests; (iii) any sale, lease, or disposition of any material Asset outside the ordinary course of business; (iv) any material reduction in workforce or termination of key employees; or (v) any event, circumstance, condition, development, or occurrence causing, resulting in, having, or that would reasonably be expected to have, a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.6 <u>Property</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) **<u>Real Property</u>**. The Company owns all of the real property (the "**Owned Real Property**") or leases and has a good and valid and enforceable leasehold interest in all the real property (the "**Leased Real Property**") described in Schedule 3.6, in each case free and clear of all liens, except for Permitted Liens and as stated in Schedule 3.6, and Schedule 3.6 sets forth the address of each parcel of Owned Real Property and Leased Real Property.

Seller has made available to Buyers a true, accurate, and complete list of all leases, subleases, licenses, easements, rights of way, waivers of mineral owners, mineral deeds, and all (i) waivers of either surface or subsurface interests or both, (ii) pipeline easements and rights-of-way, and (iii) access agreements, and all similar material agreements used by the Company in the conduct of the Business (collectively, the "**Real Property Agreements**").

With respect to the Real Property Agreements: (i) each Real Property Agreement is in full force and effect according to its terms; (ii) the Company is not in material default or breach and, to the Knowledge of Seller, no other party thereto is in material default or breach under any Real Property Agreement; (iii) there are no material claims affecting any such Real Property Agreement, and, to the Knowledge of Seller, no party has given written notice to the Company of such party's intent to terminate any Real Property Agreement; (iv) to the Knowledge of Seller, no event has occurred which, with or without the giving of notice or lapse of time, is reasonably likely to result in a violation or breach of, or give any Person the right to exercise any remedy under, or cancel, terminate, or modify, any Real Property Agreement; (v) except as provided in Schedule 3.6, no Real Property Agreement requires any Third-Party Approval in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby; (vi) as of the Closing Date, all rents, royalties, shut-in royalties, and other payments then due and payable by the Company under any Real Property Agreement have been paid in full through the Closing Date or reflected in Schedule 3.6; and (vii) the Company has made available to Buyers true and correct copies of all of the Real Property Agreements.

The Company's interest in the Real Property Agreements and, to the Company's Knowledge, the real property interests which are the subject thereof, are free and clear of all liens except as stated in Schedule 3.6, created or existing pursuant to the Real Property Agreements.

Since January 1, 2020, the Company has not received any written notice that there has been any material violation of any building, zoning, or other Law in respect of such buildings, structures, and other improvements with respect to the Real Property. There are no pending, or, to Seller's Knowledge, threatened, condemnation proceedings with respect to the Real Property. To Seller' Knowledge, there are no environmental hazards, contaminants, or violations of environmental laws affecting the Owned Real Property or Leased Real Property that would materially impair the Business.

The Owned Real Property, the Leased Real Property, and any property otherwise subject to a Real Property Agreement, in each case, identified in Schedule 3.6, comprise all of the real property interests (whether leased, owned, or permitted pursuant to a Real Property Agreement) of the Company used in or intended to be used in, or otherwise related to the conduct of the Business as of the Closing.

To Seller' Knowledge, all buildings, structures, improvements, fixtures, building systems and equipment, and all components thereof included in the Leased Real Property and the Owned Real Property are in good condition and repair in all material respects, free of any structural deficiencies or latent defects, and sufficient for the operation of the Business as it is conducted of the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) **<u>Personal Property</u>**. "**Personal Property**" means all tangible personal property owned or leased by the Company, including equipment, vehicles, furniture, and fixtures used in the Business. All of the Personal Property has been maintained in accordance with the past practice of the Company and generally accepted industry practice and is in good operating condition and repair (normal wear and tear excepted) sufficient to enable the Company to operate the Business as presently conducted and as currently contemplated to be conducted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.7 <u>Intellectual Property</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Schedule 3.7 sets forth a true and complete list of all (a) patents and patent applications, trademark registrations and trademark applications, registered copyrights and copyright applications and domain names that are owned by the Company, and (b) licenses or sublicenses of Intellectual Property to the Company, and licenses and sublicenses of Intellectual Property by the Company to any third party (collectively "**Licensed Intellectual Property**"). "**Owned Intellectual Property**" means the Intellectual Property listed on Schedule 3.7 and all other Intellectual Property owned by the Company. For purposes hereof, "**Intellectual Property**" means: (i) United States, international, and foreign patents, patent applications and statutory invention registrations, (ii) patentable inventions, discoveries, improvements, ideas, know-how, formula, methodology, processes and technology, (iii) trademarks, service marks, trade names, trade dress, slogans, logos, domain names, and other source identifiers, including registrations and applications for registration thereof, (iv) original works of authorship, copyrightable subject matter, and copyrights, including copyright registrations and/or applications for copyright registration, (v) confidential and/or proprietary information, including trade secrets and/or know-how embodied in any invention, work of authorship, customer list, database, business information, and/or Software, and (vi) inventions, extensions, modifications, or enhancements of the Software or related to the Software. For purposes hereof, "**Software**" means all computer software developed by or on behalf of the Company, or used by the Company, including all computer software in any form (such as, source code, object code, assembler code, microcode, etc.), libraries, user-interfaces (including graphical user-interfaces, application programming interfaces (APIs), and other software interfaces), and databases operated by the Company or used by the Company in any way, including use in internal Company operations, testing (including alpha and beta tests), licensing, marketing, sales, and/or in connection with processing customer orders, storing customer information, or storing and archiving data.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) To Seller' Knowledge, the use of the Owned Intellectual Property and the Licensed Intellectual Property by the Company in the ordinary course of business as currently conducted and as currently contemplated to be conducted does not conflict with or infringe upon, violate or misappropriate the Intellectual Property rights of any third party. Since January 31, 2020, no claim has been asserted in writing that the use of such Intellectual Property in the ordinary course of business does or may conflict with or infringe upon, violate or misappropriate the Intellectual Property rights of any third party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Except with respect to Open Source Materials (as defined in clause (d) below) disclosed in Schedule 3.7, the Company is the exclusive owner of the entire and unencumbered right, title and interest in each item of Owned Intellectual Property in the United States, and to Seller' Knowledge the Company is entitled to use all such Owned Intellectual Property in the ordinary course of business in the United States and worldwide, subject only to the terms of the licenses of the Owned Intellectual Property granted by the Company to its customers in the ordinary course of business. The Company has the right to use each item of Licensed Intellectual Property as provided in the license agreements therefor, and to Seller' Knowledge the Company is entitled to use all such Licensed Intellectual Property in the ordinary course of business as currently conducted and as currently contemplated to be conducted, subject only to the terms of the licenses of the Licensed Intellectual Property granted by the licensors thereof. True and complete copies of all agreements and documents with respect to the Licensed Intellectual Property and the Owned Intellectual Property have been made available to Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) "**Open Source Materials**" means materials (i) subject to any license that requires as a condition of use, modification and/or distribution thereof, that such materials, or materials combined and/or distributed with such materials be (A) disclosed or distributed in source code or similar form, (B) licensed for the purpose of making derivative works, or (C) redistributable at no charge or (ii) subject to any license or right that the Open Source Initiative has recognized or approved as an open source license. Except as disclosed in Schedule 3.7, the Company has not (a) incorporated Open Source Materials into, or combined Open Source Materials with, the Company's products or any Intellectual Property owned or used by the Company, (b) distributed Open Source Materials in conjunction with the Company's products or any Intellectual Property owned or used by the Company, or (c) used Open Source Materials in a manner that would make the Company's products or any Intellectual Property owned or used by the Company, or any part thereof, Open Source Materials.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The Owned Intellectual Property and the Licensed Intellectual Property include all of the Intellectual Property and Software used in the Business and the ordinary day-to-day operations of the Company, and there are no other items of Intellectual Property or Software that are material to the Business and/or such ordinary day-to-day operations. The Owned Intellectual Property and, to Seller's Knowledge, any Intellectual Property licensed to the Company under the Licensed Intellectual Property, is (i) to Seller's Knowledge, subsisting, valid and enforceable, and (ii) has not been adjudged invalid or unenforceable in whole or part.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Since January 1, 2020, no legal proceedings have been asserted in writing, are pending, or, to Seller' Knowledge, threatened against the Company (i) based upon or challenging or seeking to deny or restrict the use by the Company of any of the Owned Intellectual Property or Licensed Intellectual Property, (ii) alleging that any services provided by, processes used by, or products manufactured or sold by the Company infringe upon or misappropriate any Intellectual Property right of any third party, or (iii) alleging that any Intellectual Property licensed under the Licensed Intellectual Property infringes upon any Intellectual Property right of any third party or is being licensed or sublicensed in conflict with the terms of any license or other agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) To Seller' Knowledge, no person is engaging in any activity that infringes upon the Owned Intellectual Property or any Intellectual Property licensed to the Company under the Licensed Intellectual Property. Except as set forth in Schedule 3.7, the Company has not granted any license or other right to any third party with respect to the Owned Intellectual Property or Licensed Intellectual Property. The consummation of the transactions contemplated by this Agreement will not result in the termination, cancellation and/or impairment of any of the Owned Intellectual Property and/or the Licensed Intellectual Property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Correct and complete copies of all the licenses and sublicenses of the Licensed Intellectual Property to which the Company is a party have been made available to Buyer. With respect to each such license and sublicense: (i) such license and sublicense is valid and binding and in full force and effect and represents the entire agreement between the respective licensor and licensee with respect to the subject matter of such license or sublicense; (ii) such license or sublicense will not cease to be valid and binding and in full force and effect on terms identical to those currently in effect as a result of the consummation of the transactions contemplated by this Agreement, nor will the consummation of the transactions contemplated by this Agreement constitute a breach or default under such license or sublicense or otherwise give the licensor or sublicensor a right to terminate such license or sublicense; (iii) since January 1, 2020, the Company has not (x) received any notice of termination or cancellation under such license or sublicense; (y) received any notice of a breach or default under such license or sublicense, which breach has not been cured, nor (z) granted to any other third party any rights, adverse or otherwise, under such license or sublicense that would constitute a breach of such license or sublicense; and (iv) neither the Company, nor, to Seller' Knowledge, any other party to such license or sublicense is in breach or default in any material respect, and, to the Seller' Knowledge, since January 1, 2020, no event has occurred that, with notice or lapse of time would constitute such a breach or default or permit termination, modification or acceleration under such license or sublicense.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) To Seller' Knowledge, the Software is free of all viruses, worms, Trojan horses and other material known contaminants, and does not contain any problems of a material nature or have an adverse impact on the operation of other software programs or operating systems, and no rights in the Software have been transferred to any third party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) The Company has taken reasonable steps in accordance with normal industry practice to maintain the confidentiality of its customer lists and customer information, trade secrets, source code and other confidential Intellectual Property. To Seller' Knowledge since January 1, 2020, (i) there has been no misappropriation of any material trade secrets or other material confidential Intellectual Property of the Company by any Person, (ii) no employee, independent contractor or agent of the Company has misappropriated any trade secrets of any other Person in the course of such performance as an employee, independent contractor or agent and (iii) no employee, independent contractor or agent of the Company is in default or breach of any term of any employment agreement, non-disclosure agreement, assignment of invention agreement or similar agreement or contract relating in any way to the protection, ownership, development, use or transfer of Intellectual Property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) No current and former employee, director, and/or officer of the Company has any rights whatsoever to any of the Owned Intellectual Property and/or the Licensed Intellectual Property. Neither the Seller nor the Company believes it is or will be necessary to utilize any inventions, trade secrets or proprietary information of any of its employees made prior to their employment by the Company, except for inventions, trade secrets or proprietary information that have been assigned to the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.8 <u>No Conflict or Violation</u>**. The execution, delivery, and performance by Seller and the Company of this Agreement and the other Transaction Documents to be delivered by Seller and/or the Company and the consummation of the transactions contemplated hereby and thereby do not and will not (with or without notice or passage of time): (i) violate or conflict with any provision of the Charter Documents; (ii) violate any provision or requirement of any domestic or foreign, federal, state, or local law, statute, judgment, order, writ, injunction, decree, award, rule, or regulation of any Governmental Entity applicable to the Company and/or the Business; (iii) violate, result in a breach of, constitute (with due notice or lapse of time or both) a default or cause any obligation, penalty, premium, or right of termination to arise or accrue under any Intellectual Property licenses or agreements and/or any Contract (as hereinafter defined in Section 3.9); (iv) result in the creation or imposition of any Lien of any kind whatsoever upon any of the Membership Interests and/or Assets of the Company or the Business; or (v) result in the cancellation, modification, revocation, or suspension of any material license, permit, certificate, franchise, authorization, or approval issued or granted by any Governmental Entity (each a "**License**," and collectively, the "**Licenses**"), except, in the case of clauses (ii) through (v) of this <u>Section 3.8</u>, for any such conflicts, defaults or violations that would not reasonably be expected to be individually or in the aggregate, materially adverse to the Company and its Subsidiaries, taken as a whole.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.9 <u>Consents</u>**. Schedule 3.9 lists all consents and notices required to be obtained or given by or on behalf of Seller and/or the Company in connection with the consummation of the transactions contemplated by this Agreement and the Transaction Documents in compliance with all Applicable Laws, rules, regulations, or orders of any Governmental Entity, the provisions of any material Contract and/or any Intellectual Property license or agreement, except where the failure to obtain such consent will not have a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.10 <u>Labor and Employment Matters</u>**. There are no employment agreements, collective bargaining agreements, or other labor agreements to which the Company is a party or by which it is bound. The Company has complied in all material respects with all applicable federal, state, and local laws, rules, and regulations relating to employment, including wage and hour laws, discrimination, occupational safety (e.g., OSHA), and workers' compensation. Schedule 3.10 lists all employee benefit plans (e.g., pension, 401(k), health, or welfare plans) sponsored or maintained by the Company, and such plans are in compliance with Applicable Laws, including ERISA, and have no underfunding or termination liabilities. There are no pending or, to Seller' Knowledge, threatened labor disputes, strikes, or unionization efforts involving the Company's employees.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.11 <u>Litigation</u>**. Except as set forth on Schedule 3.11, there are no claims, actions, suits, or proceedings of any nature ("**Actions**") pending or, to Seller' Knowledge, threatened by or against the Company, the managers, or members of the Company, or any of their respective Affiliates, including without limitation those involving, affecting, or relating to (i) the Business, any Assets, properties, prospects, and/or operations of the Company, (ii) any Contracts, (iii) any Owned Intellectual Property, (iv) any Licensed Intellectual Property, and/or (v) the transactions contemplated by this Agreement (collectively "**Claims**"). For purposes of this Agreement, "**Affiliate**" is as defined in Section 1. The Company is not a party or subject to the provisions of any order, writ, injunction, judgment, or decree of any court or Governmental Entity. To Seller' Knowledge, no Governmental Entity is currently investigating or planning to investigate the Company. There is no action, suit, proceeding, or investigation by the Company currently pending against any third party or which the Company intends to initiate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.12 <u>Certain Agreements</u>**. (a) True and complete copies of all Contracts have been made available to Buyer, or will be made available to Buyer within 14 days of Closing. There are no renegotiations of, attempts to renegotiate, or outstanding rights to renegotiate any material amounts payable by or to the Company under any Contract and to Seller' Knowledge and the Company, no oral or written demand for such renegotiation has been made. (b) Each Contract is valid, binding, and enforceable against the Company in accordance with its terms, except as such enforceability may be limited by the Bankruptcy Exception, and is in full force and effect on the date hereof. Upon consummation of the transactions contemplated by this Agreement, each Contract shall continue to be valid, binding, enforceable, and in full force and effect without penalty or other adverse consequence. Since January 1, 2020, the Company has performed all material obligations required to be performed by it under, and is not in material default or breach of, any Contract, and no event has occurred which, with due notice or lapse of time or both, would constitute such a material default or breach by the Company. (c) To Seller' Knowledge, no other party to any Contract is in default or breach in respect thereof, and no event has occurred which, with due notice or lapse of time or both, would constitute such a default or breach.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.13 <u>Compliance with Applicable Law; Permits</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Since January 1, 2020, the Company has complied with all laws, rules, statutes, ordinances, regulations, and requirements of all Governmental Entities ("**Applicable Laws**") in all material respects. The Company is not in violation of any Applicable Law that would result in a Material Adverse Effect. The Business and the operations of the Company are being conducted in all material respects in accordance with all Applicable Laws of all Governmental Entities having jurisdiction over the Company or its Assets, properties, or operations, including, without limitation, all such Applicable Laws, orders, and requirements relating to the Business except in any case where the failure to so conduct its operations would not have a Material Adverse Effect. Since January 1, 2020, the Company has not received any written notice of any violation of any Applicable Law, order, or other legal requirement. The Company is not in default with respect to any order, writ, judgment, award, injunction, or decree of any Governmental Entity, applicable to the Company, the Business, and/or any of its Assets, properties, or operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Company holds all licenses, permits, easements, variances, exemptions, consents, certificates, orders, approvals, franchises, and other authorizations (collectively, the "**Operating Permits**") and has taken all actions required by Applicable Law or regulations of any Governmental Entity in connection with the Business as now conducted, except where the failure to obtain any such Operating Permits or to take any such action, individually or in the aggregate, does not and would not reasonably be expected to have a Material Adverse Effect. Since January 1, 2020, no Governmental Entity has issued any notification in writing stating that the Company is not in compliance with any Operating Permit. Schedule 3.1(b) lists all material Operating Permits held by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.14 <u>Licenses</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Schedule 3.14 lists all Licenses issued or granted to the Company. The Licenses constitute all Licenses required, and consents, approvals, authorizations, and other requirements prescribed, by any law, rule, or regulation which must be obtained or satisfied by the Company, in connection with the Business or that are necessary for the execution, delivery, and performance by the Company of this Agreement and the other Transaction Documents. The Licenses are sufficient and adequate in all material respects to permit the continued lawful conduct of the Business in the manner now conducted and as currently contemplated to be conducted and the ownership, occupancy, and operation of the Company's properties and the execution, delivery, and performance of this Agreement. No jurisdiction in which the Company is not qualified or licensed as a foreign business entity has demanded or requested in writing that it qualify or become licensed as a foreign business entity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Each License has been issued to, and duly obtained and fully paid for and is valid, in full force and effect, enforceable in accordance with its terms subject to the Bankruptcy Exception, and not subject to any pending or known threatened administrative or judicial proceeding to suspend, revoke, cancel, or declare such License invalid in any respect. The Company is not in violation in any material respect of any of the Licenses. The Licenses have never been suspended, revoked, or otherwise terminated, subject to any fine or penalty, or subject to judicial or administrative review, for any reason other than the renewal or expiration thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.15 <u>Intercompany and Affiliate Transactions; Insider Interests</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Other than agreements disclosed on Schedule 3.15, there are no contracts, transactions, agreements, or arrangements, written or oral, of any kind, direct or indirect, between the Company and (a) the Seller, (b) any manager, member, or officer of the Company, and/or (c) any Affiliate and/or any immediate family member of any of the foregoing persons. All of the foregoing contracts, transactions, agreements, and arrangements are referred to as the "**Related Party Agreements**." The Related Party Agreements include, without limitation, loans, guarantees, and/or pledges to, by, or for the Company as well as those from, to, by, or for any of the foregoing persons, which are currently in effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) none of (i) the Seller, (ii) any manager, member, or officer of the Company, or (iii) any Affiliate and/or any immediate family member of any of the foregoing persons, now has, or within the last three (3) years had, either directly or indirectly:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) an equity or debt interest in any corporation, partnership, joint venture, association, organization, or other Person or entity which furnishes, sells supplies, or during such period furnished, sold, or supplied, services or products to the Company, or purchased, or during such period purchased from the Company, any goods or services, or otherwise does, or during such period did, business with the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) a beneficial interest in any Contract, commitment, or agreement to which the Company is or was a party or under which it was obligated or bound or to which its properties may be or may have been subject;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) any rights in or to any of the Intellectual Property, Assets, properties, and/or rights owned or licensed by the Company and/or used by the Company in the Business, including, but not limited to, any rights as a secured party, lender, and/or debt holder;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D) an equity or debt interest in any corporation, partnership, joint venture, association, organization, or other Person or entity which is directly or indirectly in competition with the Company, excluding Hollywood Circle; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(E) the right to receive any payments of any kind from the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.16 <u>Insurance</u>**. Schedule 3.16 lists all insurance policies maintained by the Company, which are in full force and effect, provide adequate coverage for the Business, and have no pending claims or notices of cancellation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.17 <u>No Undisclosed Liabilities</u>**. Except as and to the extent (a) specifically reflected or reserved against in the most recent Financial Statements, (b) as incurred in the ordinary course of business since the date of the most recent Financial Statements, (c) arising under those contracts and agreements to which the Company is party as described in Schedule 3.12 (none of which results from, arises out of, relates to, is in the nature of, or was caused by any breach of contract, breach of warranty, tort, infringement, or violation of law), (d) incurred in connection with or arising out of the Transactions and (e) those which are not, individually or in the aggregate, material in amount, the Company has no material debt, liabilities, or obligations of any nature, whether absolute, accrued, contingent, or otherwise, and whether due or to become due (including, without limitation, any liability for taxes and interest, penalties, and other charges payable with respect to any such liability or obligation).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.18 <u>Taxes</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) For purposes of this Agreement, the following terms shall have the meanings specified below: (i) "**Tax**" or "**Taxes**" means all taxes, including, without limitation, all net income, gross receipts, sales, use, withholding, payroll, employment, social security, unemployment, excise, utility, property, and all other taxes applicable to the Company, plus applicable penalties and interest thereon. (ii) "**Tax Liabilities**" means all liabilities for Taxes. (iii) "**Tax Return**" shall mean all reports and returns required to be filed with respect to Taxes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Company was formed in June 2014 and has filed all Tax Returns. All Tax Returns filed by the Company are true, correct, and complete in all material respects, and all Taxes due and payable by the Company have been timely paid. The Company is not currently the subject of any audit, examination, or other proceeding with respect to Taxes, and no such proceeding is threatened to Seller' Knowledge.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) **<u>Tax Sharing Agreements</u>**. The Company is not a party to any tax-sharing or tax-indemnity agreement and the Company has not otherwise assumed by contract or otherwise the Tax Liability of any other person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) **<u>No Liens</u>**. None of the Assets of the Company are subject to any liens in respect of Taxes (other than for current Taxes not yet due and payable).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.19 <u>Environmental Matters</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company complies in all material respects with all Applicable Laws, regulations, and other requirements of Governmental Entities or duties under common law relating to toxic or hazardous substances, wastes, pollution, or to the protection of health, safety, or the environment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) There are no pending or, to Seller' Knowledge, threatened administrative, judicial, or regulatory proceedings, or, to Seller' Knowledge, any threatened actions or claims, or any consent decrees or other agreements in effect that relate to environmental conditions in, on, under, about, or related to the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.20 <u>Brokers or Finders</u>**. No agent, broker, finder, investment banker, financial advisor, or other person is entitled to any brokerage, finder's, or other fee or commission in connection with any of the transactions contemplated by this Agreement, based upon arrangements made by or on behalf of the Seller or its Affiliates ("**Seller's Broker Fees**"). The Seller shall be solely responsible for the payment of any and all Seller's Broker Fees due any agent, broker, finder, investment banker, financial advisor, or other person in connection with the transactions contemplated by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.21 <u>Minute Books</u>**. The minute books of the Company made available to Buyer contain complete and accurate copies of all meetings of managers and members since the time of organization of the Company. All prior material corporate and company actions on behalf of the Company have been properly authorized and ratified by the officers, managers, and/or members of the Company in accordance with Applicable Laws and the Charter Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.22 <u>No Other Representations</u>**. Except for the representations and warranties contained in this <u>ARTICLE 3</u> and the Transaction Documents, neither the Company nor the Seller makes any representation or warranty, express or implied, regarding the Company, its Subsidiaries or the Membership Interests.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.23 <u>Ownership of Membership Interests; Authorization of Agreement</u>**. The Seller makes the following representations and warranties to Buyer:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Such Seller owns the Membership Interests set forth opposite his, her, or its name in the respective amounts set forth on Schedule 1, free and clear of all Liens.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Such Seller has full legal right, power, and authority to enter into this Agreement and to sell and deliver the Membership Interests owned by him, her, or it in the manner provided herein. Such Seller has duly and validly executed this Agreement and has duly and validly executed and delivered all other agreements contemplated hereby, and each of this Agreement and such other agreements., assuming the assuming the due authorization, execution and delivery of each such Transaction Document by each of the other parties thereto, constitutes a valid, binding, and enforceable obligation of such Seller in accordance with its terms.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The execution, delivery, and performance of this Agreement and the other agreements contemplated hereby by such Seller, and the consummation of the transactions contemplated hereby or thereby, will not require, on the part of such Seller, any consent, approval, authorization, or other order of, or any filing with, any Governmental Entity, or under any contract, agreement, or commitment to which such Seller is a party or by which such Seller or its property is bound, and will not constitute a violation on the part of such Seller of any law, administrative regulation, or ruling or court decree, or any contract, agreement, or commitment, applicable to such Seller or its property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) This Agreement and all other agreements and instruments to be executed by Seller in connection herewith have been duly and validly approved by the board of directors or other governing body of Seller and no other proceedings on the part of Seller is necessary to approve this Agreement and to consummate the transactions contemplated hereby or thereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Securities Law Compliance. Such Seller is an accredited investor as defined in Rule 501(a) of Regulation D under the Securities Act of 1933, as amended (the "**Securities Act**"), or has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of receiving Buyer's common stock as the Purchase Price. Such Seller understands that the shares of Buyer's common stock are restricted securities under the Securities Act and may not be resold absent registration or an exemption. Such Seller is acquiring the shares for investment purposes and not with a view to distribution.

**ARTICLE 4<br> Representations and Warranties of Buyer.**

References in this Article 4 to Buyer's "**Knowledge**" are as defined in Section 1. Buyer represents and warrants to the Seller that as of the date hereof:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.1 <u>Organization and Corporate Authority</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Buyer is a corporation duly organized, validly existing, and in good standing under the laws of the State of Nevada, with full corporate power and authority to carry on its business as it is now and has since its organization been conducted, and to own, lease, or operate its assets and properties. Buyer is duly qualified to do business and is in good standing in every jurisdiction in which the character of the properties owned or leased by it or the nature of the business conducted by it makes such qualification necessary, except where failure to be so qualified would not have a Material Adverse Effect with respect to Buyer and its operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Buyer has all requisite corporate power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. This Agreement and all other Transaction Documents have been duly executed and delivered by Buyer, have been effectively authorized by all necessary action, corporate or otherwise, and constitute (or upon execution will constitute) legal, valid, and binding obligations of Buyer, enforceable in accordance with their respective terms, except as such enforceability may be limited by the Bankruptcy Exception.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.2 <u>OTC Filings</u>**. As of their respective dates, Buyer's filings with the OTC Markets (the "**OTC Documents**") were timely filed and complied in all material respects with the requirements applicable to Buyer's OTC Documents. Buyer's OTC Documents constitute all of the documents and reports that Buyer was required to file with OTC Markets. As of the time filed with the OTC Markets (or, if amended or superseded by a filing prior to the date of this Agreement, then on the date of such filing) none of Buyer's OTC Documents contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.3 <u>No Conflict or Violation</u>**. The execution, delivery, and performance by Buyer of this Agreement and the other Transaction Documents to be executed and delivered by Buyer and the consummation of the transactions contemplated hereby and thereby, do not and will not: (i) violate or conflict with any provision of the organizational documents of Buyer; or (ii) to Buyer's Knowledge, violate in any material respect any provision or requirement of any domestic or foreign, national, state, or local law, statute, judgment, order, writ, injunction, decree, award, rule, or regulation of any Governmental Entity applicable to Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.4 <u>Litigation</u>**. There are no material claims, actions, suits, or proceedings of any nature pending or, to the Knowledge of Buyer, threatened by or against Buyer, the officers, directors, employees, agents of Buyer, or any of their respective Affiliates involving, affecting, or relating to any assets, properties, or operations of Buyer or any of its Affiliates or the transactions contemplated by this Agreement. Buyer is not subject to any order, writ, judgment, award, injunction, or decree of any Governmental Entity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.5 <u>Consents</u>**. There are no consents or notices required to be obtained or given by or on behalf of Buyer before consummation of the transactions contemplated by this Agreement and Buyer is in compliance with all Applicable Laws, rules, regulations, or orders of any Governmental Entity, or the provisions of any material contract of which Buyer is a party to, and all such consents have been duly obtained and are in full force and effect, except where the failure to obtain such consent will not have a material effect on the operation of Buyer's business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.6 <u>Compliance with Applicable Law</u>**. The operations of Buyer are, and have been, conducted in all material respects in accordance with all Applicable Laws, regulations, orders, and other requirements of all Governmental Entities having jurisdiction over Buyer or its assets, properties, or operations, including, without limitation, all such laws, regulations, orders, and requirements relating to Buyer's business except in any case where the failure to so conduct its operations would not have a material effect on the operation of Buyer's business. Buyer has not received any notice of any violation of any such law, regulation, order, or other legal requirement, and is not in default with respect to any order, writ, judgment, award, injunction, or decree of any Governmental Entity, applicable to Buyer or any of its assets, properties, or operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.7 <u>Brokers or Finders</u>**. No agent, broker, finder, investment banker, financial advisor, or other person is entitled to any brokerage, finder's, or other fee or commission in connection with any of the transactions contemplated by this Agreement, based upon arrangements made by or on behalf of Buyer ("**Buyer's Broker Fees**"). Buyer shall be solely responsible for the payment of any and all Buyer's Broker Fees due any agent, broker, finder, investment banker, financial advisor, or other person in connection with the transactions contemplated by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.8 <u>Securities Law Compliance</u>**. The issuance of the shares of Buyer's common stock as the Purchase Price has been duly authorized and, upon issuance in accordance with this Agreement, will be validly issued, fully paid, and non-assessable, and will comply with all applicable securities laws, including any applicable exemptions under the Securities Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.9 <u>Investment Intent</u>**. Buyer is acquiring the Membership Interests solely for its own account for investment purposes and not with a view to, or for offer or sale in connection with, any distribution thereof. Buyer is an "accredited investor" as defined in Regulation D promulgated by the Securities and Exchange Commission under the Securities Act of 1933, as amended. Buyer acknowledges that the Membership Interests are not registered under the Securities Act of 1933, as amended, or any state securities laws, and that the Membership Interests may not be transferred or sold except pursuant to the registration provisions of the Securities Act of 1933, as amended or pursuant to an applicable exemption therefrom and subject to state securities laws and regulations, as applicable. Buyer is able to bear the economic risk of holding the Membership Interests for an indefinite period (including total loss of its investment), and has (either alone or together with its advisors) sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risk of its investment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.10 <u>Solvency</u>**. After giving effect to the transactions contemplated by this Agreement, Buyer (a) will be solvent (in that both the fair value of its assets will not be less than the sum of its liabilities and that the present saleable value of its assets will not be less than the amount required to pay its probable liabilities as they become absolute and matured), and (b) will have adequate capital with which to engage in its business. No transfer of property is being made and no obligation is being incurred in connection with the transactions contemplated by this Agreement with the intent to hinder, delay or defraud either present or future creditors of the Company, its Subsidiaries or Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.11 <u>No Other Representations</u>**. Except for the representations and warranties contained in this ARTICLE 4 and the Transaction Documents, the Buyer makes any representation or warranty, express or implied, regarding the Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.12 <u>Non-Reliance</u>**. Buyer acknowledges and agrees that it is not relying nor has it relied on any express or implied representations or warranties, whether in writing, orally or otherwise, made by or on behalf of or imputed to any the Seller, the Company, its Subsidiaries, the Seller's Representative, nor any other Person, except for those expressly made by the Seller and the Company in ARTICLE 3 (as modified by the Disclosure Schedules) each of which is made solely by the Party specified therein and subject to the other terms and conditions of this Agreement, and that only those representations and warranties in ARTICLE 3 shall have any legal effect. Without limiting the foregoing, buyer further acknowledges and agrees that it is not relying nor has it relied on any projections, forecasts, estimates, plans or budgets of future revenues, expenses or expenditures, future results of operations (or any component thereof), future cash flows (or any component thereof) or future financial condition (or any component thereof) of the Company or its Subsidiaries heretofore or hereafter delivered to or made available to Buyer or any of its agents, representatives, lenders or affiliates or any other Person and neither the Company, its Subsidiaries, any Seller, the Seller's Representative nor any other Person will have or be subject to any liability or indemnification obligations to Buyer or any of its agents, representatives, lenders or affiliates or any other Person, and none of Buyer or any of its agents, representatives, lenders or affiliates or any other Person shall have any claim against the Company, its Subsidiaries, any Seller, the Seller's Representative nor any other Person, resulting from such delivery or availability or any subsequent use or otherwise in connection therewith.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.13 <u>Valid Issue of Equity Consideration</u>**. The Equity Consideration, when issued and delivered in accordance with the terms set forth in this Agreement, will be duly authorized, validly issued, fully paid and nonassessable. The Equity Consideration will be issued in compliance with all applicable U.S. federal and state securities Laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.14 <u>Buyer Acknowledgment and Covenant Regarding Tenant Improvements</u>**. Buyer acknowledges that it has had the opportunity to discuss, to its satisfaction, the scope and status of all tenant improvements related to the Block 40 project with Seller's Representative. Buyer further represents that it is aware of all contractually obligated tenant improvement work required under the Leases or other agreements relating to the Project, including with respect to JBL, Wapas, Ten Ten Restaurant, and Naahma Sushi, and covenants to perform and complete, or cause to be performed and completed, all such tenant improvements in accordance with the terms of such agreements following the Closing.

**ARTICLE 5<br> Covenants and Certain Understandings<br> and Agreements of the Parties.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.1 <u>Confidentiality</u>**. After the Closing, Seller will keep the matters contemplated herein, all information about the Company or the Business, and all information provided by Buyer related to Buyer, confidential, and will not provide information about such matters to any party or use such information except to the extent necessary to effect the transactions contemplated hereby. Buyer will keep the matters contemplated herein and all information provided by Seller related to the Seller confidential, and will not provide information about such matters to any party or use such information except to the extent necessary to effect the transactions contemplated hereby or as required by Applicable Law. Buyer and the Seller shall each cause their respective Affiliates, officers, directors, employees, agents, and advisors to keep confidential all information received in connection with the transactions contemplated hereby. The confidentiality restrictions set forth herein shall not apply to information that (i) was in the public domain before the date of this Agreement or subsequently came into the public domain other than as a result of disclosure by the party to whom the information was delivered; (ii) was lawfully received by a party from a third party free of any obligation of confidence of or to such third party; or (iii) is required to be disclosed in a judicial or administrative proceeding after giving the other party as much advance notice of the possibility of such disclosure as practicable so that the other party may attempt to limit such disclosure.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.2 <u>Further Assurances</u>**. Upon the reasonable request of a party or parties hereto at any time after the Closing Date, the other party or parties shall forthwith execute and deliver such further instruments of assignment, transfer, conveyance, endorsement, direction, or authorization and other documents as the requesting party or parties or its or their counsel may reasonably request in order to effectuate the purposes of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.3 <u>Management; Board Seat; Employment Agreement</u>**. At Closing, Buyer shall appoint a Manager or Managers of the Company, as identified in Schedule 5.3, and shall cause Block 40, LLC to enter into employment agreements with Charles R. Abele, Jr. and Peter Jago, on terms mutually agreed by Buyer and such individuals, including a minimum term of three years, base salary, and customary benefits.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.4 <u>No Shop</u>**. Until the Closing, neither Buyer nor the Seller shall enter into or negotiate any similar contract or arrangement with any other Person, without the express written approval of the other parties hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.5 <u>Intentionally Omitted</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.6 <u>Operation of Business Pre-Closing</u>**. Between the date of this Agreement and the Closing, Seller shall use commercially reasonable efforts to cause the Company to operate the Business in the ordinary course consistent with past practice in all material respects, preserve its assets and business relationships, and not take any actions that would result in a Material Adverse Effect, including, without limitation, (i) selling or disposing of any material Assets, (ii) incurring material liabilities, (iii) amending the Charter Documents, or (iv) declaring or paying any dividends or distributions. Seller shall promptly notify Buyer of any material damage, loss, or casualty affecting the Company's Assets or Business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.7 <u>Tax Covenants</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) **<u>Pre-Closing Taxes</u>**. Seller shall prepare and file, or cause to be prepared and filed, all Tax Returns for the Company for periods ending on or before the Closing Date, and shall pay all Taxes due for such periods. Such Tax Returns shall be prepared in a manner consistent with past practice and provided to Buyer for review at least 15 days prior to filing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) **<u>Straddle Period Taxes</u>**. For any Tax period that includes but does not end on the Closing Date (a "**Straddle Period**"), Taxes shall be allocated between the pre-Closing and post-Closing portions based on an interim closing of the books as of the Closing Date, except for property and ad valorem taxes, which shall be prorated based on the number of days in the period before and after the Closing Date. Seller shall be responsible for the pre-Closing portion of such Taxes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) **<u>Cooperation</u>**. Buyer and Seller shall cooperate in the preparation and filing of Tax Returns, including providing access to records and assisting with any audits or inquiries related to Taxes for periods ending on or before the Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.8 <u>Books and Records</u>**. At or promptly following the Closing, Seller shall deliver or cause to be delivered to Buyer all books, records, and files of the Company, including financial, operational, and personnel records, whether in physical or electronic form. For three (3) years following the Closing, Buyer shall provide Seller with reasonable access to such records for tax or legal purposes, subject to confidentiality obligations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.9 <u>Notification of Certain Matters</u>**. Each Party shall give prompt notice to the other Parties if such Party or its Affiliates: (a) fails to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it or its Affiliates hereunder in any material respect; (b) receives any notice or other communication in writing from any third party (including any Governmental Entity) alleging (i) that the consent of such third party is or may be required in connection with the transactions contemplated by this Agreement or (ii) any non-compliance with any Law by such Party or its Affiliates; (c) receives any notice or other communication from any Governmental Entity in connection with the transactions contemplated by this Agreement; (d) discovers any fact or circumstance that, or becomes aware of the occurrence or non-occurrence of any event the occurrence or non-occurrence of which, would reasonably be expected to cause or result in any of the conditions to the Closing set forth in <u>Article VII</u> not being satisfied or the satisfaction of those conditions being materially delayed; or (e) becomes aware of the commencement or threat, in writing, of any Action against such Party or any of its Affiliates, or any of their respective properties or assets, or, to the Knowledge of such Party, any officer, director, partner, member or manager, in his, her or its capacity as such, of such Party or of its Affiliates with respect to the consummation of the transactions contemplated by this Agreement. No such notice shall constitute an acknowledgement or admission by the Party providing the notice regarding whether or not any of the conditions to the Closing have been satisfied or in determining whether or not any of the representations, warranties or covenants contained in this Agreement have been breached.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.10 <u>Efforts</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Subject to the terms and conditions of this Agreement, each Party shall use its reasonable best efforts, and shall cooperate fully with the other Parties, to take, or cause to be taken, all actions and to do, or cause to be done, all things reasonably necessary, proper or advisable under applicable Laws and regulations to consummate the transactions contemplated by this Agreement (including the receipt of all applicable consents of Governmental Entities) and to comply as promptly as practicable with all requirements of Governmental Entities applicable to the transactions contemplated by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Prior to the Closing, each Party shall use its commercially reasonable efforts to obtain any consents of Governmental Entities or other third Persons as may be necessary for the consummation by such Party or its Affiliates of the transactions contemplated by this Agreement or required as a result of the execution or performance of, or consummation of the transactions contemplated by, this Agreement by such Party or its Affiliates, and the other Parties shall provide reasonable cooperation in connection with such efforts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.11 <u>Listing Covenant and Right of Rescission</u>**. Buyer has represented to Seller that it intends to cause its equity interests, including the shares of common stock constituting the Equity Consideration, to be listed on a nationally recognized stock exchange in the United States, specifically either The Nasdaq Stock Market LLC ("Nasdaq") or the New York Stock Exchange ("NYSE"), on or before June 30, 2026 (the "Outside Listing Date"). The Parties acknowledge and agree that such representation is a material inducement to Seller' decision to enter into this Agreement and to accept the Equity Consideration in exchange for the Membership Interests. Accordingly, Buyer covenants and agrees that, in the event that its shares of common stock (including the Equity Consideration) are not listed and publicly traded on either the Nasdaq or the NYSE on or prior to the Outside Listing Date, the Seller's Representative shall have the right, exercisable in his sole and absolute discretion within sixty (60) days following the Outside Listing Date, to elect to rescind the Transaction. In such event, (a) Buyer shall return the Membership Interests to the Seller, pro rata in accordance with their respective Pro Rata Portions, free and clear of all liens and encumbrances, and (b) the Seller shall return to Buyer the portion of the Equity Consideration received by such Seller. The Parties agree to take all actions and execute all documents necessary to effectuate such rescission promptly following any such election by the Seller's Representative.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.12 <u>Board Representation</u>**. From and after the Closing Date, and for so long as the earlier of (i) the date on which Buyer's equity securities are listed for trading on a nationally recognized stock exchange in the United States (including, without limitation, the Nasdaq or NYSE), or (ii) the date on which the Seller collectively cease to beneficially own at least ten percent (10%) of the issued and outstanding shares of common stock of Buyer (the "Board Representation Period"), Buyer shall take all necessary action (including, without limitation, amending its governing documents, increasing the size of its Board of Directors (the "Board"), and soliciting stockholder approval, if necessary) to ensure that one individual designated by the Seller's Representative (the "Seller Designee") is appointed to, and remains a member of, the Board. The Seller Designee shall be subject to the same indemnification rights, compensation, and reimbursement policies, and shall be entitled to attend and participate in meetings of the Board on the same basis as all other members of the Board. The Seller's Representative shall have the right to designate a replacement Seller Designee at any time and from time to time during the Board Representation Period by providing written notice to the Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.13 <u>EB-5 Program Compliance</u>**. Buyer acknowledges that certain investors in the Business prior to the Closing Date have invested capital pursuant to the requirements of the EB-5 Immigrant Investor Program administered by the United States Citizenship and Immigration Services ("USCIS"). Purchaser covenants and agrees that, from and after the Closing Date, it shall operate the Business in a manner to preserve the eligibility of such EB-5 investors to qualify for and obtain permanent resident status under the EB-5 Program. Without limiting the generality of the foregoing, Buyer shall not take any action, or fail to take any action, that would reasonably be expected to (i) result in the denial, revocation, or other adverse determination by USCIS of an EB-5 investor's I-526 or I-829 petition, or (ii) materially interfere with the satisfaction of the job creation, capital at risk, or other requirements applicable to such EB-5 investors.

**ARTICLE 6<br> Conditions to Closing.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.1 <u>Conditions to Obligations of Each Party</u>**. The obligations of the Seller, on the one hand, and Buyer, on the other hand, to consummate the transactions contemplated hereby are subject to the fulfillment, at or before the Closing Date, of the conditions set forth in this Section 6.1, any one or more of which may be waived in writing by the party entitled to the benefit of such condition.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) **<u>No Action or Proceeding</u>**. No preliminary or permanent injunction or other order issued by any Governmental Entity that declares this Agreement invalid in any material respect or prevents or would be violated by the consummation of the transactions contemplated hereby, or which materially adversely affects the assets, properties, operations, net income, or financial condition of the Company, is in effect; and no action or proceeding has been instituted or threatened by any Governmental Entity, other person, or entity which seeks to prevent or delay the consummation of the transactions contemplated by this Agreement or which challenges the validity or enforceability of this Agreement, the result of which could constitute a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) **<u>Compliance with Law</u>**. There shall have been obtained all permits, approvals, and consents of all Governmental Entities that counsel for Buyer or for the Seller may reasonably deem necessary or appropriate so that consummation of the transactions contemplated by this Agreement will be in compliance with Applicable Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.2 <u>Conditions to Obligations of Buyer</u>**. The obligations of Buyer to consummate the transactions contemplated hereby are subject to the fulfillment to Buyer's reasonable satisfaction, at or before the Closing Date, of the conditions set forth in this Section 6.2, any one or more of which may be waived by Buyer in writing in its discretion:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) **<u>Additional Closing Documents of Seller</u>**. Buyer has received, or is receiving at the Closing, all of the following, each duly executed by the parties thereto (other than Buyer) and dated the Closing Date (or an earlier date satisfactory to Buyer), in form and substance satisfactory to Buyer: (i) Copies of the resolutions of the managers of the Company and Seller authorizing the execution, delivery, and performance of this Agreement and the other Transaction Documents to be delivered by the Seller and the Company and Seller and the consummation of the transactions contemplated hereby and thereby, (ii) A certificate of existence/good standing issued by the Secretary of State of Florida as of a recent date prior to Closing for the Company and Seller. (iii) certificates of authority with respect to the persons signing and delivering documents on behalf of Seller and evidence of approval of the transactions contemplated by this Agreement with respect to Seller.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) **<u>Consents and Approvals</u>**. All required consents, waivers, authorizations, and approvals of any Governmental Entity, and of any other Person or entity, required under the Contracts, Licenses, or otherwise in connection with the execution, delivery, and performance of this Agreement shall have been duly obtained in form reasonably satisfactory to Buyer, shall be in full force and effect on the Closing Date, and the original executed copies shall have been delivered to Buyer on or before the Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) **<u>Other Obligations</u>**. The Sellers shall have paid and satisfied in full the Sellers' Brokers Fees and any other payments or monetary obligations due by the Company or Sellers to any Person as a result of the purchase of the Membership Interests or the consummation of the transactions contemplated by this Agreement, including any outstanding loans or creditor obligations. Buyer agrees to add its corporate guarantee to the senior loan and to use reasonable efforts to remove its guarantees of Harish Metha and McCarthy Estate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) **<u>Representations and Warranties</u>**. The representations and warranties of Seller and the Company in Article 3 shall be true and correct in all material respects as of the Closing Date as if made on such date, except for representations and warranties made as of a specific date, which shall be true and correct as of such date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.3 <u>Conditions to Obligations of the Seller</u>**. The obligations of the Seller to consummate the transactions contemplated hereby are subject to the fulfillment, at or before the Closing Date, of the conditions set forth in this Section 6.3, any one or more of which may be waived by the Seller's Representative in writing in its discretion:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) **<u>Additional Closing Documents of Buyer</u>**. Buyer has executed and delivered, or is executing and delivering at the Closing copies, certified by an authorized officer of Buyer, of resolutions of its board of directors authorizing the execution and delivery of this Agreement and the other Transaction Documents to be delivered by Buyer and the consummation of the transactions contemplated hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) **<u>Consents and Approvals</u>**. All required consents, waivers, authorizations, and approvals of any Governmental Entity, and of any other person or entity, needed by the Buyer in connection with the execution, delivery, and performance of this Agreement shall have been duly obtained in form reasonably satisfactory to the Seller, shall be in full force and effect on the Closing Date, and the original executed copies shall have been delivered to the Seller on or before the Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) **<u>Other Obligations</u>**. The Buyer shall have paid and satisfied in full the Buyer's Brokers Fees and any other payments or monetary obligations due by Buyer to any Person as a result of the purchase of the Membership Interests or the consummation of the transactions contemplated by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) **<u>Representations and Warranties</u>**. The representations and warranties of Buyer in Article 4 shall be true and correct in all material respects as of the Closing Date as if made on such date, except for representations and warranties made as of a specific date, which shall be true and correct as of such date.

**ARTICLE 7<br> Indemnification and Survival.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.1 <u>Survival of Representations and Warranties</u>**. The representations and warranties of the parties contained in this Agreement shall survive the Closing as follows: the representations and warranties in Sections 3.1 (Organization and Good Standing), 3.2 (Ownership of Membership Interests), 3.3 (Authorization of Agreement), 3.23 (Ownership of Membership Interests; Authorization of Agreement), 4.1 (Organization and Corporate Authority), and 4.8 (Securities Law Compliance) and Sections 3.18 (Taxes) and 3.19 (Environmental Matters) until the date that is six (6) years following the Closing Date; and (c) all other representations and warranties shall survive for a period of 18 months following the Closing Date. Covenants and agreements shall survive in accordance with their terms.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.2 <u>Indemnification by Seller</u>**. Subject to the limitations in Section 7.4, Seller shall indemnify, defend, and hold harmless Buyer, its Affiliates, officers, directors, and successors (collectively, the "**Buyer Indemnified Parties**") from and against any and all losses, damages, liabilities, costs, and expenses, including reasonable attorneys' fees (collectively, "**Losses**"), arising out of or relating to (a) any breach of any representation or warranty of Seller or the Company in Article 3, (b) any breach of any covenant or agreement of Seller or the Company in this Agreement, or (c) any Taxes or liabilities of the Company for periods prior to the Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.3 <u>Indemnification by Buyer</u>**. Subject to the limitations in Section 7.4, Buyer shall indemnify, defend, and hold harmless Seller and their Affiliates, heirs, and successors (collectively, the "**Seller Indemnified Parties**") from and against any Losses arising out of or relating to (a) any breach of any representation or warranty of Buyer in Article 4, or (b) any breach of any covenant or agreement of Buyer in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.4 <u>Limitations on Indemnification</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) No claim for indemnification under Sections 7.2(a) or 7.3(a) shall be made unless the aggregate Losses exceed $25,000 (the "**Basket**"), but once exceeded, the indemnifying party shall be liable for all Losses from the first dollar.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The maximum liability of Seller under Section 7.2(a) shall not exceed 25% of the Purchase Price, except for breaches of Sections 3.1, 3.2, 3.3, 3.23, which shall be capped at 100% of the Purchase Price.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) No party shall be liable for punitive or consequential damages, except to the extent payable to a third party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Claims for indemnification must be made in writing within the survival period specified in Section 7.1, with notice and opportunity for the indemnifying party to defend or resolve the claim.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The Indemnified Parties shall in all cases exercise commercially reasonable efforts to mitigate the amount of any Losses for which indemnification is sought from any Indemnifying Party hereunder. Without limiting the foregoing, the amount of Losses payable by any Indemnifying Party under this <u>Article VII</u> shall be reduced by (i) any insurance proceeds actually received from an insurance carrier by the Indemnified Party with respect thereto (net of any applicable costs of recovery or collection thereof or any increase in premium resulting therefrom), and (ii) indemnity or contribution amounts actually received from third parties (net of any applicable costs of recovery or collection thereof); <u>provided</u>, <u>that</u>, in each case, no Indemnified Party shall be required to commence any Action against an insurance carrier or other Person; <u>provided further that</u> if an Indemnified Party receives insurance proceeds, indemnity or contribution amounts, after having received payment from (or on behalf of) any Indemnifying Party with respect to a Loss, such Indemnified Party shall refund the Indemnifying Party up to the lesser of (x) the amount of the insurance proceeds actually received (net of any applicable costs of recovery or collection thereof or any increase in premium resulting therefrom) and (y) the amount of indemnification received by the Indemnified Party from the Indemnifying Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.5 <u>Indemnification Procedures</u>**. A party seeking indemnification (the "**Indemnified Party**") shall promptly notify the indemnifying party (the "**Indemnifying Party**") in writing of any claim, providing reasonable detail. The Indemnifying Party shall have the right to assume control of the defense of such claim, provided it confirms in writing its obligation to indemnify. The Indemnified Party shall cooperate in the defense and may participate at its own expense. No settlement shall be made without the Indemnified Party's consent, unless it provides a full release of the Indemnified Party without admission of liability.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.6 <u>Escrow Amount</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Buyer shall first make claims against the Escrow Fund in connection with the satisfaction of any obligation of the Seller under <u>Section 7.2</u> before seeking recourse against the Seller. On the date that is twelve (12) months following the Closing Date (the "**Escrow Release Date**") an amount equal to the balance then on deposit in the Escrow Fund <u>minus</u> the aggregate amount, if any, which any Buyer Indemnified Party has claimed under <u>Section 7.2</u> prior to such date (to the extent such Claims, if any, remain unresolved) shall, upon a written instruction to the Escrow Agent executed by Buyer and the Seller's Representative, be released to the Seller in accordance with their Pro-Rata Portion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any amount remaining in the Escrow Fund following the Escrow Release Date for the satisfaction of any unresolved Claims, shall be released upon the final resolution of such Claims in accordance with the joint written instructions delivered by Buyer and the Seller's Representative to the Escrow Agent. If any amount remains in the Escrow Fund following the resolution of all Claims and the distribution to the Buyer Indemnified Parties of any amounts payable to them in connection therewith, Buyer and the Seller's Representative shall execute and deliver a joint written instruction to the Escrow Agent directing the payment of the remaining balance to the Seller in accordance with their Pro-Rata Portion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.7 <u>Exclusive Remedies.</u>** The parties acknowledge and agree that from and after Closing their sole and exclusive remedy with respect to any and all claims for any breach of any representation, warranty, covenant, agreement or obligation set forth herein, shall be pursuant to the indemnification provisions set forth in this <u>ARTICLE 7</u>. In furtherance of the foregoing, each party hereby waives, from and after Closing, to the fullest extent permitted under Law, any and all rights, claims and causes of action for any breach of any representation, warranty, covenant, agreement or obligation set forth herein it may have against the other parties hereto and their Affiliates and each of their respective Representatives, except pursuant to the indemnification provisions set forth in this <u>ARTICLE 7</u>. Nothing in this <u>Section 7.7</u> shall limit any Person's right to seek and obtain any equitable relief to which any Person shall be entitled or to.

**ARTICLE 8<br> Termination.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.1 <u>Termination Events</u>**. This Agreement may be terminated prior to the Closing:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) by mutual written consent of Buyer and the Seller's Representative;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) by either Buyer or the Seller's Representative if the Closing has not occurred by J Sept 15, 2025 (the "**Termination Date**"), provided the terminating party is not in material breach of this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) by either Buyer or the Seller's Representative if a Governmental Entity issues a final, non-appealable order prohibiting the transactions contemplated hereby; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) by either Buyer or the Seller's Representative if the other party materially breaches this Agreement and fails to cure such breach within 30 days of written notice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.2 <u>Effect of Termination</u>**. Upon termination pursuant to Section 8.1, this Agreement shall become void and have no further force or effect, except that Sections 5.1 (Confidentiality), 9.1 (Notices), 9.3 (Governing Law), 9.10 (Expenses of Transactions), 9.11 (Submission to Jurisdiction), and 9.12 (Attorneys' Fees) shall survive. Termination shall not relieve any party of liability for any willful breach of this Agreement prior to termination.

**ARTICLE 9<br> Miscellaneous.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.1 <u>Notices</u>**. All notices, requests, demands, and other communications hereunder shall be in writing and shall be deemed given upon personal delivery or three (3) calendar days after being mailed by certified or registered mail, postage prepaid, return receipt requested, or one (1) business day after being sent via a nationally recognized overnight courier service if overnight courier service is requested from such service or upon receipt of electronic or other confirmation of transmission if sent via facsimile, to the parties, their successors in interest, or their assignees at the following addresses and telephone numbers, or at such other addresses or telephone numbers as the parties may designate by written notice in accordance with this Section 9.1:

If to Buyer:

Favo Capital, Inc.

4300 N. University Drive Suite D-105

Lauderhill, Florida 33351

If to the Seller or the Company:

1776 Polk Street, Suite 200

Hollywood, FL 33020

Attn: Charles R. Abele, Jr.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.2 <u>Seller's Representative</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Seller hereby appoints Charles R. Abele, Jr. as the Seller's Representative to act as the agent and attorney-in-fact for Seller with respect to this Agreement, including receiving and sending notices, granting waivers, resolving disputes, and making decisions on behalf of Seller. Any decision or action by the Seller's Representative shall be binding on all Seller. Buyer may rely on the authority of the Seller's Representative without further inquiry.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Seller's Representative shall have full power and authority to take all actions under this Agreement, any applicable Transaction Document and any other agreement entered into or document delivered in connection with the Transaction that are to be taken by or on behalf of the Seller or by the Seller's Representative. The Seller's Representative shall take any and all actions which it believes are necessary or appropriate under this Agreement and any applicable Transaction Document, including giving and receiving any notice or instruction permitted or required under this Agreement and any applicable Transaction Document by the Seller's Representative, interpreting all of the terms and provisions of this Agreement and any applicable Transaction Document, authorizing payments to be made with respect hereto or thereto, obtaining reimbursement as provided for herein for all out-of-pocket fees and expenses and other obligations of or incurred by the Seller's Representative in connection with this Agreement and any applicable Transaction Document, defending, negotiating and settling any claims relating to <u>Section 2.4</u> hereof, dealing with Buyer under this Agreement and any applicable Transaction Document, taking any other actions specified in or contemplated by this Agreement and any applicable Transaction Document, and engaging counsel, accountants or other representatives in connection with the foregoing matters. The power of attorney granted by each of the Seller (on its own behalf and on behalf of its successors and permitted assigns) in this <u>Section 9.1</u> is coupled with an interest, is irrevocable, may be delegated by the Seller's Representative and shall survive the death, incapacity or dissolution (as applicable) of such Seller and the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) **<u>Authorization</u>**. The Seller hereby authorizes the Seller's Representative to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) consummate the Transactions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) receive all notices or documents given or to be given to the Seller pursuant hereto or in connection herewith or therewith and to receive and accept services of legal process in connection with any suit or proceeding arising under this Agreement or any applicable Transaction Document;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) execute and deliver amendments to this Agreement on behalf of the Seller in accordance with <u>Section 8.1</u>; execute and deliver the Escrow Agreement and any other applicable Transaction Document (and any amendments thereto);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) authorize distributions from the Escrow Account on behalf of the Seller;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) engage counsel, accountants and other advisors, and incur other expenses in connection with this Agreement, any applicable Transaction Document and the transactions contemplated hereby or thereby, as the Seller's Representative may in its sole discretion deem necessary or appropriate; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) take such action as the Seller's Representative may in its sole discretion deem necessary or appropriate in respect of: (i) waiving any inaccuracies in the representations or warranties of Buyer contained in this Agreement, any applicable Transaction Document or in any document delivered by Buyer pursuant hereto or thereto; (ii) taking such other action as the Seller's Representative is authorized to take under this Agreement or any applicable Transaction Document (including the Escrow Agreement); (iii) receiving all documents or certificates and making all determinations, in its capacity as Seller's Representative, required under this Agreement or any applicable Transaction Document (including the Escrow Agreement); and (iv) all such actions as may be necessary to carry out the responsibilities of the Seller's Representative contemplated by this Agreement or any applicable Transaction Document (including the Escrow Agreement), including the defense and/or settlement of any claims relating to <u>Section 2.4</u> hereof and any waiver of any obligation of Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) **<u>Agency</u>**. Notwithstanding any provision herein to the contrary, the Seller's Representative is not an agent of the Seller, and shall have no duties to the Seller or liability to the Seller with respect to any action taken, decision made or instruction given by the Seller's Representative in connection with this Agreement or any applicable Transaction Document; <u>provided</u>, <u>however</u>, that the foregoing exculpation of the Seller's Representative shall not apply to the extent that such actions, decisions or instructions have been finally determined by a court of competent jurisdiction to result from the Seller's Representative's fraud or willful misconduct in connection with such Seller's Representative's performance under this Agreement and any applicable Transaction Document.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) **<u>Indemnification of Seller's Representative</u>**. The Seller's Representative shall be indemnified by the Seller for and shall be held harmless against any loss, liability or expense incurred by the Seller's Representative or any of its Affiliates and any of their respective managers, directors, officers, employees, agents, members, partners, stockholders, consultants, attorneys, accountants, advisors, brokers, representatives or controlling persons, in each case, relating to the Seller's Representative's conduct as Seller's Representative, other than losses, liabilities or expenses that have been finally determined by a court of competent jurisdiction to result from the Seller's Representative's fraud or willful misconduct in connection with its performance under this Agreement and any applicable Transaction Document. This indemnification shall survive the termination of this Agreement and any applicable Transaction Document. The Seller's Representative may, in all questions arising under this Agreement and any applicable Transaction Document, rely on the advice of counsel and for anything done, omitted or suffered in good faith by the Seller's Representative in accordance with such advice, and the Seller's Representative shall not be liable to the Seller or any other person in connection therewith. In no event shall the Seller's Representative be liable hereunder or in connection herewith for any indirect, punitive, special or consequential damages.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) **<u>Reliance</u>**. In the performance of its duties hereunder, the Seller's Representative shall be entitled to (a) rely upon any document or instrument reasonably believed to be genuine, accurate as to content and signed by any Seller or any party hereunder and (b) assume that any Person purporting to give any notice in accordance with the provisions hereof has been duly authorized to do so. Buyer and its Affiliates shall be entitled to entitled to conclusively and absolutely rely, without inquiry, on any approval, consent, election, notice, decision, agreement, waiver, delivery, interpretation, amendment or other action given, made or taken by the Seller's Representative for or on behalf of any Seller as if it were expressly ratified and confirmed in writing by such Seller.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) **<u>Irrevocable Appointment</u>**. The appointment of the Seller's Representative hereunder is irrevocable and any action taken by the Seller's Representative pursuant to the authority granted in this <u>Section 9.2</u> shall be effective and absolutely binding as the action of the Seller's Representative under this Agreement and any applicable Transaction Document.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.3 <u>Assignability and Parties in Interest</u>**. This Agreement and the rights, interests, or obligations hereunder may not be assigned by any of the parties hereto without the prior written consent of the other parties hereto. This Agreement shall inure to the benefit of and be binding upon Buyer and the Seller and their respective permitted successors and assigns. Nothing in this Agreement will confer upon any person or entity not a party to this Agreement, or the legal representatives of such person or entity, any rights or remedies of any nature or kind whatsoever under or by reason of this Agreement, except for the Buyer Indemnified Parties and Seller Indemnified Parties under Article 7 in connection with indemnification claims and except in connection with permitted assignments as provided above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.4 <u>Governing Law</u>**. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Nevada, without regard to its conflicts-of-law principles.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.5 <u>Counterparts</u>**. Facsimile transmission of any signed original document and/or retransmission of any signed facsimile transmission will be deemed the same as delivery of an original. At the request of any party, the parties will confirm facsimile transmission by signing a duplicate original document. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which shall constitute but one and the same instrument.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.6 <u>Publicity</u>**. No party shall issue any press release or make any public statement regarding the transactions contemplated hereby without the prior written consent of the other parties, except that Buyer may issue a press release and file a report with the OTC Markets with respect to the transactions contemplated hereby, provided such disclosures are provided to the Seller's Representative for review at least 48 hours prior to release or filing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.7 <u>Complete Agreement</u>**. This Agreement, the exhibits and schedules hereto, and the other Transaction Documents contain or will contain the entire agreement between the parties hereto with respect to the transactions contemplated herein and therein and shall supersede all previous oral and written and all contemporaneous oral negotiations, commitments, and understandings.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.8 <u>Modifications, Amendments, and Waivers</u>**. No supplement, modification, or amendment of this Agreement will be binding unless executed in writing by Buyer and the Seller's Representative on behalf of all Seller. No waiver of any of the provisions of this Agreement will be considered, or will constitute, a waiver of any of the rights or remedies, at law or equity, of the party entitled to the benefit of such provisions unless made in writing and executed by the party entitled to the benefit of such provision. No waiver of any of the provisions of this Agreement shall constitute a waiver of any other provision, whether or not similar.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.9 <u>Headings; References</u>**. The headings contained in this Agreement and the other Transaction Documents are for reference purposes only and shall not affect in any way the meaning, construction, or interpretation of this Agreement and the other Transaction Documents. References herein to Articles, Sections, Schedules, and Exhibits refer to the referenced Articles, Sections, Schedules, or Exhibits hereof unless otherwise specified.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.10 <u>Severability</u>**. Any provision of this Agreement, which is invalid, illegal, or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity, illegality, or unenforceability, without affecting in any way the remaining provisions hereof in such jurisdiction or rendering that or any other provision of this Agreement invalid, illegal, or unenforceable in any other jurisdiction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.11 <u>Entire Agreement</u>**. This Agreement and the ancillary Transaction Documents constitute the sole and entire agreement of the parties to this Agreement with respect to the subject matter contained herein and therein, and supersede all prior and contemporaneous understandings and agreements, both written and oral, with respect to such subject matter. In the event of any inconsistency between the statements in the body of this Agreement and those in the Transaction Documents, the Exhibits and Disclosure Schedules (other than an exception expressly set forth as such in the Disclosure Schedules), the statements in the body of this Agreement will control. For the avoidance of doubt, the Parties intend that any previously executed or partially executed version(s) of this Agreement are expressly superseded by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.12 <u>Expenses of Transactions</u>**. All fees, costs, and expenses incurred by Buyer, in connection with the transactions contemplated by this Agreement shall be borne by Buyer, and all fees, costs, and expenses incurred by the Seller or the Company in connection with the transactions contemplated by this Agreement shall be borne by the Seller.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.13 <u>Submission to Jurisdiction</u>**. All actions or proceedings arising in connection with this Agreement, if any, shall be tried and litigated exclusively in the state or federal courts located in the State of Nevada, or such other venue as may be mutually agreed to by the parties. The aforementioned choice of venue is intended by the parties to be mandatory and not permissive in nature, thereby precluding the possibility of litigation between the parties with respect to or arising out of this Agreement in any jurisdiction other than that specified in this paragraph. Each party hereby waives any right it may have to assert the doctrine of forum non conveniens or similar doctrine or to object to venue with respect to any proceeding brought in accordance with this paragraph, and stipulates that the State and Federal courts located in Nevada shall have in personam jurisdiction over each of them for the purpose of litigating any such dispute, controversy, or proceeding. Each party hereby authorizes and accepts service of process sufficient for personal jurisdiction in any action against it as contemplated by this Section by registered or certified mail, return receipt requested, postage prepaid, to its address for the giving of notices as set forth in Section 9.1. Nothing herein shall affect the right of any party to serve process in any other manner permitted by law. The parties may, by mutual agreement, elect to resolve disputes through arbitration administered by the American Arbitration Association in Nevada under its Commercial Arbitration Rules, with any resulting award enforceable in the courts specified above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.14 <u>Attorneys' Fees</u>**. If Buyer or any of its Affiliates, successors, or assigns brings any action, suit, counterclaim, cross-claim, appeal, arbitration, or mediation for any relief against the Seller or any of their respective Affiliates, successors, or assigns, or if the Seller or any of their respective Affiliates, successors, or assigns brings any action, suit, counterclaim, cross-claim, appeal, arbitration, or mediation for any relief against Buyer or any of its Affiliates, successors, or assigns, declaratory or otherwise, to enforce the terms hereof or to declare rights hereunder (collectively, an "**Action**"), in addition to any damages and costs which the prevailing party otherwise would be entitled, the non-prevailing party shall pay to the prevailing party a reasonable sum for attorneys' fees and costs (at the prevailing party's attorneys' then-prevailing rates) incurred in bringing or defending such Action and/or enforcing any judgment, order, ruling, or award (collectively, a "**Decision**") granted therein, all of which shall be deemed to have accrued on the commencement of such Action and shall be paid whether or not such action is prosecuted to a Decision. Any Decision entered in such Action shall contain a specific provision providing for the recovery of attorneys' fees and costs incurred in enforcing such Decision.

For the purposes of this Section, attorneys' fees shall include, without limitation, fees incurred in the following: (1) postjudgment motions and collection actions; (2) contempt proceedings; (3) garnishment, levy, and debtor and third-party examinations; (4) discovery; and (5) bankruptcy litigation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.15 <u>Representation of the Seller, the Seller's Representative and its Affiliates</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Buyer and each of the other Parties acknowledges that Shumaker, Loop & Kendrick ("**SLK**") has acted as counsel to the Company, its Subsidiaries, the Seller's Representative, certain of the Seller and certain members of the Company's management (in their capacities as equityholders of the Seller) in connection with the negotiation of this Agreement and the Transactions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Accordingly, Buyer consents and agrees, on its own behalf and on behalf of the Company and its Subsidiaries (collectively with Buyer, the "**Conflict Parties**"), that, following the Closing, SLK may serve as counsel to the Seller's Representative, any of the Seller and members of the Company's management (collectively, the "**Seller Parties**"), including with respect to any litigation, claim or obligation arising out of or relating to this Agreement or the transactions contemplated by this Agreement, or otherwise where the interests of the Seller Parties may be directly adverse to Buyer and its Subsidiaries (including the Conflict Parties), notwithstanding any representation by SLK prior to the Closing of the Conflict Parties in a matter substantially related to any such dispute(s), and notwithstanding whether SLK may be handling ongoing matters for the Conflict Parties. Buyer, on behalf of itself and the other Conflict Parties, hereby (a) waive any claim they have or may have that SLK has a conflict of interest or is otherwise prohibited from engaging in such representation and (b) agree that, in the event that a dispute arises after the Closing between Buyer, the Company or any of its Subsidiaries, on the one hand, and any Seller Part(y)(ies), on the other hand, SLK may represent such Seller Part(y)(ies) in such dispute even though the interests of such Person(s) may be directly adverse to Buyer or the Company, and even though SLK may have represented the Seller Parties in a matter substantially related to such dispute or may be handling ongoing matters for the Conflict Parties. Buyer, on behalf of itself and the other Conflict Parties, further consents and agrees to, the communication by SLK to the Seller Parties in connection with any such representation of any fact known to SLK arising by reason of SLK's prior representation of the Conflict Parties. Buyer represents that Buyer's own attorney has explained and helped Buyer evaluate the implications and risks of waiving, on behalf of itself and the other Conflict Parties, the right to assert a future conflict against SLK, and Buyer's consent, including on behalf of the other Conflict Parties, with respect to this waiver is fully informed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Buyer, on behalf of itself and the other Conflict Parties, also further agrees that all communications in any form or format whatsoever between or among SLK, on the one hand, and any of the Conflict Parties, the Seller, the Seller's Representative, their respective Affiliates and their and their Affiliates' respective Representatives, on the other hand, that relate in any way to the negotiation, documentation and consummation of the transactions contemplated by this Agreement, any alternative transaction(s) to the transactions contemplated by this Agreement presented to or considered by any of the Conflict Parties, or any dispute arising under this Agreement (collectively, the "**Privileged Communications**") shall be deemed to be attorney-client privileged and that such attorney-client privilege and any expectation of client confidence relating thereto belongs to the Seller's Representative and the Seller, shall be controlled by the Seller's Representative on behalf of the Seller, and will not pass to or be claimed by any of the Conflict Parties (including Buyer or the Company). It is acknowledged and agreed that any failure by the Seller or the Company or any of its Subsidiaries to remove documents, emails and other non-email electronic documents concerning the negotiation or drafting of this Agreement, or any other agreement previously contemplated by the Seller which, if consummated, would have resulted in a transaction substantially similar to the one contemplated by this Agreement, which are protected by the attorney-client or work product privilege(s), or which constitute Non-Privileged Communications, is inadvertent and Buyer shall not, and shall cause its Subsidiaries (including the Company), and its and their respective directors, managers, employees, officers and other Representatives not to, intentionally use or attempt to use any means to access, retrieve, restore, recreate, unarchive or otherwise gain access to or view any such materials for any purpose.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Buyer further agrees, on behalf of itself and the other Conflict Parties, that all communications in any form or format whatsoever between or among SLK, on the one hand, and any of the Conflict Parties, the Seller, the Seller's Representative, their respective Affiliates and their and their Affiliates' respective Representatives, that relate in any way to the negotiation, documentation and consummation of the transactions contemplated by this Agreement, any alternative transaction(s) to the transactions contemplated by this Agreement presented to or considered by any of the Conflict Parties, or any dispute arising under this Agreement and that are not Privileged Communications ("**Non-Privileged Communications**") shall also belong solely to the Seller's Representative and the Seller (and not the Conflict Parties) and shall not pass to or be claimed by Buyer or any of the other Conflict Parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) In addition, all of the client files and records in the possession of SLK, to the extent related to this Agreement and the transactions contemplated hereby or otherwise, will continue to be property of (and be controlled by) the Seller's Representative and the Seller, and neither Buyer, the Company nor any other Conflict Party will have any access to them, nor shall SLK have any duty to reveal or disclose any such files and records or other materials or any Privileged Communications by reason of any attorney-client relationship between SLK, on the one hand, and the Company or any of its Subsidiaries, on the other hand.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Notwithstanding the foregoing, in the event that a dispute arises between Buyer or the other Conflict Parties (including the Company), on the one hand, and a third party other than the Seller's Representative or the Seller, on the other hand, after the Closing, the Company or the other applicable Conflict Party may assert the attorney-client privilege to prevent disclosure of Privileged Communications by SLK to such third party; <u>provided</u>, <u>however</u>, that no Conflict Party (including the Company) may waive such privilege without the prior written consent of the Seller's Representative. In the event that any Conflict Party is requested or required by governmental order or otherwise to access or obtain a copy of all or any portion of the Privileged Communications, Buyer shall promptly, but in any event within two (2) Business Days, notify the Seller's Representative in writing (including by making specific reference to this Section) so that the Seller's Representative or the applicable Seller(s) can seek a protective order, and Buyer agrees to use, and to cause the other Conflict Parties to use, all commercially reasonable efforts to assist therewith.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, each of the parties hereto has executed this Membership Interest Purchase Agreement as of the date first above written.

FAVO CAPITAL, INC.

---

| | |
|:---|:---|
| By: | <u>/s/ Shaun Quin</u> |
| Name: | Shaun Quin |
| Title: | CEO |

---

HOLLYWOOD CIRCLE CAPITAL, LLC

---

| | |
|:---|:---|
| By: | <u>/s/ Charles R. Abele Jr.</u> |
| Name: | Charles R. Abele, Jr. |
| Title: | Authorized Representative |

---

BLOCK 40, LLC

---

| | |
|:---|:---|
| By: | <u>/s/ Charles R. Abele Jr.</u> |
| Name: | Charles R. Abele, Jr. |
| Title: | Authorized Representative |

---

**Schedule 3.1(b):** 

**Operating Permits**

None.

**Schedule 3.6**

**Property**

**Owned Real Property**

None.

**Leased Real Property**

None.

**Schedule 3.7**

**Intellectual Property**

**Owned Intellectual Property**

None.

**Licensed Intellectual Property**

None.

**Open Source Materials**

None.

**Schedule 3.9**

**Consents**

Blackstone Inc or its Affiliate, as successor in interest to Deutsche Bank pursuant to that certain Loan Agreement dated June 1, 2022 between Block 40 Property, LLC and Deutsche Bank AG, New York Branch, as amended.

**Schedule 3.10**

**Employee Benefits and Labor Matters**

**Employee Benefit Plans** 

None.

**Employment Agreements** 

None.

**Labor Matters**

None.

**Schedule 3.11**

**Litigation**

On August 11, 2022, A&J Capital, Inc. ("A&J") filed an arbitration claim against the Company's subsidiary, Block 40, LLC ("Block 40") seeking damages for breach of the parties' Services Agreement. Block 40 defended the claim on a number of grounds, arguing that the conversion of a related entity, Hollywood Circle, LLC to a Delaware corporation terminated the need for the services as of the conversion date, and therefore, the only fees owed were up to the date of the conversion. On July 31, 2024, an arbitration panel entered a corrected final arbitration award ("Award") in favor of A&J and against Block 40 in the amount of $555,607.09 as of February 29, 2024, which amount continues to accrue interest at the per diem rate of $736.99 plus continuing prejudgment interest thereon at the per diem rate of $130.26 until fully satisfied. On August 23, 2024, A&J filed a petition in Broward County, Florida, CACE-24-01257, seeking to confirm the Award and to enter a judgment against Block 40 for all sums in the Award. In the Broward County proceedings on October 22, 2024, Block 40 timely filed its answer to A&J's petition and its own counterpetition seeking to set aside the Award, which remains pending.

**Schedule 3.14**

**Licenses**

None.

**Schedule 3.15** 

**Intercompany and Affiliate Transactions; Insider Interests**

1. Management Agreement dated June 21, 2013 between Block 40, LLC and Block 40 Managers, LLC

2. Amended and Restated Management Agreement dated June 19, 2020 between Block 40, LLC and Block 40 Managers, LLC

**Schedule 3.16**

**Insurance**

None.

**Schedule 5.3**

**Management and Employment Agreements**

**Employment Agreements** 

---

| | | | |
|:---|:---|:---|:---|
| **Employee Name** | **Position** | **Agreement Date** | **Key Terms** |
| Charles R. Abele, Jr. | CEO | July 11, 2025 | To be negotiated |
| Peter Jago | VP | July 11, 2025 | To be negotiated |

---

## Exhibit 3.1

**BARBARA K. CEGAVSKE**

**Secretary of State**

**202 North Carson Street**

**Carson City, Nevada 89701-4201**

**(775) 684-5708**

**Website: www.nvsos.gov**

Business Number

**C17151-1999** 

Filing Number

**20243824047**

Filed On

**2/15/2024 10:52:00 PM**

**<u>Profit Corporation:</u>**<br>**Certificate of Amendment** (PURSUANT TO NRS 78.380 & 78.385/78.390)<br> **Certificate to Accompany Restated Articles or Amended and** <br> **Restated Articles** (PURSUANT TO NRS 78.403)<br> **Officer's Statement** (PURSUANT TO NRS 80.030)<br>

**TYPE OR PRINT - USE DARK INK ONLY - DO NOT HIGHLIGHT**

---

| | |
|:---|:---|
| **1. Entity information:** | &nbsp;&nbsp; Name of entity:<br> **Favo Capital, Inc.**<br> Entity or Nevada Business Identification Number (NVID): **NV19991312642** |
| **2. Restated or**<br> **Amended and**<br> **Restated Articles**:<br> (Select one)<br>(If amending and<br> restating only, complete section 1,2,3,5 and 6  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;☒ Certificate to Accompany Restated Articles or Amended and Restated Articles<br> ☐ Restated Articles - No amendments, articles are restated only and are signed by an<br> officer of the corporation who has been authorized to execute the certificate by<br>resolution of the board of directors adopted on: _________<br> The certificate correctly sets forth the text of the articles or certificate as amended to the date of the certificate.<br> ☒ Amended and Restated Articles<br>\*Restated or Amended and Restated Articles must be included with this filing type. |
| <br> **3. Type of Amendment Being Completed:** (Select only one box)<br>(If amending, complete section 1,3,5 and 6)  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br> ☐ Certificate of Amendment to Articles of Incorporation (Pursuant to NRS 78.380 - Before Issuance of Stock)<br> The undersigned declare that they constitute at least two-thirds of the following:<br> (Check only one box) ☐ incorporators ☐ board of directors<br>The undersigned affirmatively declare that to the date of this certificate, no stock of the corporation has been issued |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**☒** Certificate of Amendment to Articles of Incorporation (Pursuant to NRS 78.385 and<br> 78.390 - After Issuance of Stock)<br> The vote by which the stockholders holding shares in the corporation entitling them to exercise at least a majority of the voting power, or such greater proportion of the voting power as may be required in the case of a vote by classes or series, or as may be required by the provisions of the articles of incorporation\* have voted in favor of the amendment is: <u>Majority</u><br>|
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;☐ Officer's Statement (foreign qualified entities only) -<br> Name in home state, if using a modified name in Nevada:<br> ________________________________________<br> Jurisdiction of formation: _________________________<br> Changes to takes the following effect:<br> ☐ The entity name has been amended. ☐ Dissolution<br> ☐ The purpose of the entity has been amended. ☐ Merger<br> ☐ The authorized shares have been amended. ☐ Conversion<br> ☐ Other: (specify changes)<br>\* Officer's Statement must be submitted with either a certified copy of or a certificate evidencing the filing of any document, amendatory or otherwise, relating to the original articles in the place of the corporations creation.  |

---

This form must be accompanied by appropriate fees

Page 1 of 2

![](image_112.jpg)

**BARBARA K. CEGAVSKE**

**Secretary of State**

**202 North Carson Street**

**Carson City, Nevada 89701-4201**

**(775) 684-5708**

**Website: www.nvsos.gov**

**<u>Profit Corporation:</u>**<br>**Certificate of Amendment** (PURSUANT TO NRS 78.380 & 78.385/78.390)<br> **Certificate to Accompany Restated Articles or Amended and** <br> **Restated Articles** (PURSUANT TO NRS 78.403)<br> **Officer's Statement** (PURSUANT TO NRS 80.030)<br>

---

| | |
|:---|:---|
| **4. Effective Date and Time:** (Optional) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Date: ______________ Time:______________<br> (must not be later than 90 days after the certificate is filed)<br>|
| **5. Information Being Changed:** <br> (Domestic Corporations only) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changes to takes the following effect:<br> ☐ The entity name has been amended.<br> ☐ The registered agent has been changed. (attach Certificate of Acceptance from new registered agent)<br> ☐ The purpose of the entity has been amended.<br> **☐** The authorized shares have been amended.<br> ☐ The directors, managers or general partners have been amended.<br> ☐ IRS tax language has been added.<br> ☒ Articles have been added.<br> ☒ Articles have been deleted.<br> ☐ Other.<br> The articles have been amended as follows: (provide article numbers, if available)<br> _<u>See Below</u>__________________________________________________________<br>(attach additional page(s) if necessary)<br>|
| **6. Signature:** (Required) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;X <u>/s/ Shaun Quin</u><br> Signature of Officer or Authorized Signer Title: President<br> <u>X ______________</u><br> Signature of Officer or Authorized Signer Title:<br>\*If any proposed amendment would alter or change any preference or any relative or other right given to any class or series of outstanding shares, then the amendment must be approved by the vote, in addition to the affirmative vote otherwise required, of the holders of shares representing a majority of the voting power of each class or series affected by the amendment regardless to limitations or restrictions on the voting power thereof.<br>|
|  | **Please include any required or optional information in space below:**<br> (attached additional pages if necessary) |
|  | ARTICLE I<br> NAME<br> The name of the corporation is Favo Capital, Inc.<br>SEE ATTACHED <br>|

---

This form must be accompanied by appropriate fees

Page 2 of 2

**AMENDED AND RESTATED ARTICLES OF INCORPORATION OF**

**<u>Favo Capital, Inc.</u>**

**a Nevada corporation**

**ARTICLE I**

<u>NAME</u>

The name of the corporation is Favo Capital Inc.

**ARTICLE II**

<u>RESIDENT AGENT & REGISTERED OFFICE</u>

Section 2.01. <u>Resident Agent.</u> The name and address or the Resident Agent for service of process is Nevada Agency and Transfer Company, or whomever the board of directors may determine.

Section 2.02. <u>Registered Office.</u> The address of its Registered Office is 50 West Liberty St. Ste. 880, Reno, Nevada., the address of the Resident Agent.

Section 2.03. <u>Other Offices.</u> The Corporation may also maintain offices for the transaction of any business at such other places within or without the State of Nevada as it may from time to time determine. Corporate business of every kind and nature may be conducted, and meetings of directors and stockholders held outside the State of Nevada with the same effect as if in the State of Nevada.

**ARTICLE III**

<u>PURPOSE</u>

The corporation is organized for the purpose of engaging in any lawful activity, within or without the State of Nevada.

**ARTICLE IV**

<u>CAPITAL STOCK</u>

Section 4.01 <u>Authorized Shares</u>. The aggregate number of shares which the Corporation shall have authority to issue is six hundred million (600,000,000) shares, consisting of two classes to be designated, respectively, "Common Stock" and "Preferred Stock," with all of such shares having a par value of $.0001 per share. The total number of shares of Common Stock that the Corporation shall have authority to issue is five hundred million (500,000,000) shares. The total number of shares of Preferred Stock that the Corporation shall have authority to issue is one hundred million (100,000,000) shares. The Preferred Stock may be issued in one or more series, each series to be appropriately designated by a distinguishing letter or title, prior to the issuance of any shares thereof. The voting powers, designations, preferences, limitations, restrictions, and relative, participating, optional and other rights, and the qualifications, limitations, or restrictions thereof, of the Preferred Stock shall hereinafter be prescribed by resolution of the board of directors pursuant to Section 4.03 of this Article IV.

Section 4.02. Common Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Dividend Rate</u>. Subject to the rights of holders of any Preferred Stock having preference as to dividends and except as otherwise provided by these Articles of Incorporation, as amended from time to time (hereinafter, the "Articles") or the Nevada Revised Statues (hereinafter, the "NRS"), the holders of Common Stock shall be entitled to receive dividends when, as and if declared by the board of directors out of assets legally available therefor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Voting Rights</u>. Except as otherwise provided by the NRS, the holders of the issued and outstanding shares of Common Stock shall be entitled to one vote for each share of Common Stock. No holder of shares of Common Stock shall have the right to cumulate votes.

€ <u>Liquidation Rights</u>. In the event of liquidation, dissolution, or winding up of the affairs of the Corporation, whether voluntary or involuntary, subject to the prior rights of holders of Preferred Stock to share ratably in the Corporation's assets, the Common Stock and any shares of Preferred Stock which are not entitled to any preference in liquidation shall share equally and ratably in the Corporation's assets available for distribution after giving effect to any liquidation preference of any shares of Preferred Stock. A merger, conversion, exchange or consolidation of the Corporation with or into any other person or sale or transfer of all or any part of the assets of the Corporation (which shall not in fact result in the liquidation of the Corporation and the distribution of assets to stockholders) shall not be deemed to be a voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>No Conversion, Redemption, or Preemptive Rights</u>. The holders of Common Stock shall not have any conversion, redemption, or preemptive rights.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Consideration for Shares</u>. The Common Stock authorized by this Article shall be issued for such consideration as shall be fixed, from time to time, by the board of directors.

Section 4.03. Preferred Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Designation</u>. The board of directors is hereby vested with the authority from time to time to provide by resolution for the issuance of shares of Preferred Stock in one or more series not exceeding the aggregate number of shares of Preferred Stock authorized by these Articles, and to prescribe with respect to each such series the voting powers, if any, designations, preferences, and relative, participating, optional, or other special rights, and the qualifications, limitations, or restrictions relating thereto, including, without limiting the generality of the foregoing: the voting rights relating to the shares of Preferred Stock of any series (which voting rights, if any, may be full or limited, may vary over time, and may be applicable generally or only upon any stated fact or event); the rate of dividends (which may be cumulative or noncumulative), the condition or time for payment of dividends and the preference or relation of such dividends to dividends payable on any other class or series of capital stock; the rights of holders of Preferred Stock of any series in the event of liquidation, dissolution, or winding up of the affairs

of the Corporation; the rights, if any, of holders of Preferred Stock of any series to convert or exchange such shares of Preferred Stock of such series for shares of any other class or series of capital stock or for any other securities, property, or assets of the Corporation or any subsidiary (including the determination of the price or prices or the rate or rates applicable to such rights to convert or exchange and the adjustment thereof, the time or times during which the right to convert or exchange shall be applicable, and the time or times during which a particular price or rate shall be applicable); whether the shares of any series of Preferred Stock shall be subject to redemption by the Corporation and if subject to redemption, the times, prices, rates, adjustments and other terms and conditions of such redemption. The powers, designations, preferences, limitations, restrictions and relative rights may be made dependent upon any fact or event which may be ascertained outside the Articles or the resolution if the manner in which the fact or event may operate on such series is stated in the Articles or resolution. As used in this section "fact or event" includes, without limitation, the existence of a fact or occurrence of an event, including, without limitation, a determination or action by a person, government, governmental agency or political subdivision of a government. The board of directors is further authorized to increase or decrease (but not below the number of such shares of such series then outstanding) the number of shares of any series subsequent to the issuance of shares of that series. Unless the board of directors provides to the contrary in the resolution which fixes the characteristics of a series of Preferred Stock, neither the consent by series, or otherwise, of the holders of any outstanding Preferred Stock nor the consent of the holders of any outstanding Common Stock shall be required for the issuance of any new series of Preferred Stock regardless of whether the rights and preferences of the new series of Preferred Stock are senior or superior, in any way, to the outstanding series of Preferred Stock or the Common Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Certificate</u>. Before the Corporation shall issue any shares of Preferred Stock of any series, a certificate of designation setting forth a copy of the resolution or resolutions of the board of directors, and establishing the voting powers, designations, preferences, the relative, participating, optional, or other rights, if any, and the qualifications, limitations, and restrictions, if any, relating to the shares of Preferred Stock of such series, and the number of shares of Preferred Stock of such series authorized by the board of directors to be issued shall be made and signed by an officer of the corporation and filed in the manner prescribed by the NRS.

Section 4.04. <u>Non-Assessment of Stock</u>. The capital stock of the Corporation, after the amount of the subscription price has been fully paid, shall not be assessable for any purpose, and no stock issued as fully paid shall ever be assessable or assessed, and the Articles shall not be amended in this particular. No stockholder of the Corporation is individually liable for the debts or liabilities of the Corporation.

Section 4.05. <u>Certificates of Designation</u>. The Corporation has previously designated authorized shares of its Preferred Stock as Series A Preferred Stock and Series C Preferred Stock. The Certificates of Designation, as amended, for each of the Series A Preferred Stock and the Series C Preferred Stock are incorporated herein by reference as if set forth in full.

**ARTICLE V**

<u>DIRECTORS</u>

<u> </u>

Section 5.01. <u>Governing Board</u>. The members of the Governing Board of the Corporation shall be styled as directors. The board of directors of the Corporation shall be elected in such manner as shall be provided in the bylaws of the Corporation.

Section 5.02. <u>Change in Number of Directors.</u> The number of directors may be changed from time to time in such manner as shall be provided in the bylaws of the Corporation.

**ARTICLE VI**

<u>PERIOD OF DURATION</u>

The corporation is to have a perpetual existence.

**ARTICLE VII**

<u>DIRECTORS' AND OFFICERS' LIABILITY</u>

A director or officer of the corporation shall not be personally liable to this corporation or its stockholders for damages for breach of fiduciary duty as a director or officer, but this Article shall not eliminate or limit the liability of a director or officer for (i) acts or omissions which involve intentional misconduct, fraud or a knowing violation of law or (ii) the unlawful payment of distributions. Any repeal or modification of this Article by the stockholders of the corporation shall be prospective only, and shall not adversely affect any limitation on the personal liability of a director or officer of the corporation for acts or omissions prior to such repeal or modification.

**ARTICLE VIII**

<u>INDEMNITY</u>

Every person who was or is a party to or is threatened to be made a party to, or is involved in any action suit or proceeding, whether civil, criminal, administrative or investigative. by reason of the fact that he, or a person of whom he is the legal representative, is or was a director or officer of the corporation, or is or was serving at the request of the corporation as a director or officer of another corporation, or as its representative in a partnership, joint venture, trust or other enterprise, shall be indemnified and held harmless to the fullest extent legally permissible under the laws of the State of Nevada from time to time against all expenses, liability and loss (including attorneys' fees, judgments, fines and amounts paid or to be paid in settlement) reasonably incurred or suffered by him in connection therewith. Such right of indemnification shall be a contract right which may be enforced in any manner desired by such person. The expenses of officers and directors incurred in defending a civil or criminal action, suit or proceeding must be paid by the corporation as they are incurred and in advance of the final disposition of the action, suit or proceeding. upon receipt of an undertaking by or on behalf of the director or officer to repay the amount if it is ultimately determined by a court of competent jurisdiction that he is not entitled to be indemnified by the corporation. Such right of indemnification shall not be exclusive of any other right which such directors, officers or representatives may have or hereafter acquire, and, without limiting the generality of such statement. they shall be entitled to their respective rights of indemnification under any by-law, agreement, vote of stockholders, provision of law, or otherwise, as well as their rights under this Article.

Without limiting the application of the foregoing, the stockholders or Board of Directors may adopt bylaws from time to time with respect to indemnification, to provide at all times the fullest indemnification permitted by the laws of the State of Nevada, and may cause the corporation to purchase and maintain insurance on behalf of any person who is or was a director or officer of the corporation, or is or was serving at the request of the corporation as director or officer of another corporation, or as its representative in a partnership I joint venture, trust or other enterprises against any liability asserted against such person and incurred in any such capacity or arising out of such status, whether or not the corporation would have the power to indemnify such person.

The indemnification provided in this Article shall continue as to a person who has ceased to be a director, officer, employee or agent, and shall inure to the benefit of the heirs, executors and administrators of such person.

**ARTICLE IX**

<u>POWERS OF DIRECTORS</u>

Section 9.01. In furtherance and not in limitation of the powers conferred by statute the Board of Directors is expressly authorized:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Subject to the Bylaws, if any, adopted by the stockholders, to make, alter or repeal the Bylaws of the corporation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) To authorize and cause to be executed mortgages and liens, with or without Umit as to amount, upon the real and personal property of the corporation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) To authorize the guaranty by the corporation of securities, evidences of indebtedness and obligations of other persons. corporations and business entities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) To set apart out of any of the funds of the corporation available for distributions a reserve or reserves for any proper purpose and to abolish any such reserve;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) By resolution, to designate one or more committees, each committee to consist of at least one director of the corporation, which, to the extent provided in the resolution or in the Bylaws of the corporation, snail have and may exercise the powers of the Board of Directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it. Such committee or committees shall have such name or names as may be stated in the Bylaws of the corporation or as may be determined from time to time by resolution adopted by 1he Board of Directors; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) To authorize the corporation by its officers or agents to exercise all such powers and to do alt such acts and things as may be exercised or done by the corporation, except and to the extent that any such statute shall require action by the stockholders of the corporation with regard to the exercising of any such power or the doing of any such act or thing.

Section 9.02. In addition to the powers and authorities herein before or by statute expressly conferred upon them, the Board of Directors may exercise all such powers and do all such acts and things as may be exercised or done by the corporation, except as otherwise provided herein and by law.

**ARTICLE X**

<u>TRANSACTIONS WITH STOCKHOLDERS</u>

Section 10.01. <u>Control Share Acquisiti</u>o<u>n Exemption</u>. The corporation elects not to be governed by the provisions of NRS.§78.378 through NRS.§78.3793, inclusive, generally known as the "Control Share Acquisition Statute."

Section 10.02. <u>Combinations With Interested Stockholders</u>. The corporation elects not to be governed by the provisions of NRS §78.411 through NRS §78.444, inclusive.

**ARTICLE XI**

<u>AMENDMENTS</u>

Section 11.01. The board of directors is expressly granted the power to make, amend, alter, or repeal the bylaws of the Corporation. Any adoption, amendment or repeal of the Bylaws by the board of directors shall require the approval of a majority of directors then in office.

Section 11.02. The stockholders shall also have power to make, amend, alter, or repeal the Bylaws of the Corporation. Any adoption, amendment or repeal of the Bylaws by the stockholders shall require the approval of a majority of voting shares in the Corporation.

Section 11.01. This corporation reserves the right to amend, alter, change, or repeal any provision contained in these Amended and Restated Articles of Incorporation, in the manner now or hereafter prescribed by statute or by these Amended and Restated Articles of Incorporation and all rights conferred upon the stockholders are granted subject to this reservation. Notwithstanding any other provision of these Amended and Restated Articles of Incorporation, and in addition to any other vote that may be required by law of the terms of any series of Preferred Stock, the affirmative vote of the holders of at least 66 2/3% of the voting power of the then-outstanding shares of capital stock entitled to vote shall be required to amend, alter or repeal Articles VII and VIII of these Amended and Restated Articles of Incorporation.

IN WITNESS WHEREOF, I have hereunto set my hand this 07<sup>th</sup> day of February 2024, hereby declaring and certifying that the facts stated hereinabove are true.

<u>/s/ Vincent Napolitano</u>

Vincent Napolitano - CEO

## Exhibit 3.2

**AMENDED AND RESTATED BYLAWS**

**OF**

**Favo Capital, Inc.**

A Nevada Corporation

<u>ARTICLE I</u>

Stockholders

Section 1. <u>Annual Meeting.</u> Annual meetings of the stockholders, commencing with the year 2023, shall be held on the <u>12th</u> day of <u>April</u> each year if not a legal holiday and, if a legal holiday, then on the next secular day following, or at such other time as may be set by the Board of Directors from time to time, at which the stockholders shall elect by vote a Board of Directors and transact such other business as may properly be brought before the meeting.

Section 2. <u>Special Meetings</u>. Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by statute or by the Articles of Incorporation, may be called by the President or the Secretary by resolution of the Board of Directors or at the request in writing of stockholders owning a majority in amount of the entire capital stock of the corporation issued and outstanding and entitled to vote. Such request shall state the purpose of the proposed meeting.

Section 3. <u>Place of Meetings</u>. All annual meetings of the stockholders shall be held at the registered office of the corporation or at such other place within or without the State of Nevada as the directors shall determine. Special meetings of the stockholders may be held at such time and place within or without the state of Nevada as shall be stated in the notice of the meeting, or in a duly executed waiver of notice thereof. Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice.

Section 4. <u>Quorum; Adjourned Meetings</u>. The holders of a majority, of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by statute or by the Articles of Incorporation. If , however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have the power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified.

Section 5. <u>Voting</u> . Each stockholder of record of the corporation holding common stock which is entitled to vote at this meeting shall be entitled at each meeting of stockholders to one vote for each share of stock standing in his name on the books of the corporation. Upon the demand of any stockholder, the vote for directors and the vote upon any question before the meeting shall be by ballot.

When a quorum is present or represented at any meeting, the vote of the holders of a majority of the stock having voting power present in person or represented by proxy shall be sufficient to elect directors or to decide any question brought before such meeting, unless the question is one upon which by express provision of the statutes or of the Articles of Incorporation, a different vote is required in which case such express provision shall govern and control the decision of such question.

Section 6. <u>Proxies</u>. At any meeting of the stockholders any stockholder may be represented and vote by a proxy or proxies appointed by an instrument in writing. In the event that any such instrument in writing shall designate two or more persons to act as proxies, a majority of such persons represented at the meeting, or, if only one shall be present, then that one shall have and may exercise all of the powers conferred by such written instrument upon all of the persons so designated unless the instrument shall otherwise provide. No proxy or power of attorney to vote shall be used to vote at a meeting of the stockholders unless it shall have been filed with the secretary of the meeting. All questions regarding the qualification of voters, the validity of proxies and the acceptance or rejection of votes shall be decided by the inspectors of election who shall be appointed by the Board of Directors, or if not so appointed, then by the presiding officer of the meeting.

Section 7. <u>Action Without Meeting</u>. Any action which may be taken by the vote of the stockholders at a meeting may be taken without a meeting if authorized by the written consent of stockholders holding at least a majority of the voting power, unless the provisions of the statutes or of the Articles of Incorporation require a greater proportion of voting power to authorize such action in which case such greater proportion of written consents shall be required.

<u>ARTICLES II</u>

Directors

Section 1. <u>Management of Corporation</u> . The business of the corporation shall be managed by its Board of Directors which may exercise all such powers of the corporation and do all such lawful acts and things as are not by statute or by the Articles of Incorporation or by these Bylaws directed or required to be exercised or done by the stockholders.

Section 2. <u>Number, Tenure, and Qualifications</u> . The number of directors which shall constitute the whole board shall be at least one. The number of directors may from time to time be increased or decreased to not less than one nor more than fifteen. The directors shall be elected at the annual meeting of the stockholders and except as provided in Section 2 of this Article, each director elected shall hold office until his successor is elected and

qualified. Directors need not be stockholders.

Section 3. <u>Vacancies</u>. Vacancies in the Board of Directors including those caused by an increase in the number of directors, may be filled by a majority of the remaining directors,

though less than a quorum, or by a sole remaining director, and each director so elected shall hold office until his successor is elected at an annual or a special meeting of the

stockholders. The holders of two-thirds of the outstanding shares of stock entitled to vote may at any time peremptorily terminate the term of office of all or any of the directors by vote at a meeting called for such purpose or by a written statement filed with the secretary or, in his absence, with any other officer. Such removal shall be effective immediately, even if successors are not elected simultaneously.

A vacancy or vacancies in the Board of Directors shall be deemed to exist in case of the death, resignation or removal of any directors, or if the authorized number of directors be increased, or if the stockholders fail at any annual or special meeting of stockholders at which any director or directors are elected the full authorized number of directors to be voted for at that meeting.

If the Board of Directors accepts the resignation of a director tendered to take effect at a future time, the Board or the stockholders shall have power to elect a successor to take office when the resignation is to become effective.

No reduction of the authorized number of directors shall have the effect of removing any director prior to the expiration of his term of office.

Section 4. <u>Annual and Regular Meetings</u>. Regular meetings of the Board of Directors shall be held at any place within or without the State which has been designated from time to time by resolution of the Board or by written consent of all members of the Board. In the absence of such designation regular meetings shall be held at the registered office of the

corporation. Special meetings of the Board may be held either at a place so designated or at the registered office.

Regular meetings of the Board of Directors may be held without call or notice at such time and at such place as shall from time to time be fixed and determined by the Board of Directors.

Section 5. <u>First Meeting</u>. The first meeting of each newly elected Board of Directors shall be held immediately following the adjournment of the meeting of stockholders and at the place thereof. No notice of such meeting shall be necessary to the directors in order legally to continue the meeting, provided a quorum be present. In the event such meeting is not so held, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the Board of Directors.

Section 6. <u>Special Meetings</u>. Special meetings of the Board of Directors may be called by the Chairman or the President or by any Vice-President or by any two directors.

Written notice of the time and place of special meetings shall be delivered personally to each director or sent to each director by mail or by other form of written communication, charges prepaid, addressed to him at his address as it is shown upon the records or if such address is not readily ascertainable, at the place in which the meetings of the directors are regularly held. In case such notice is mailed or telegraphed, it shall be deposited in the United States mail or delivered to the telegraph company at least three (3) days prior to the time of the holding of the

meeting. In case such notice is hand delivered as above provided, it shall be so delivered at least twenty-four (24) hours prior to the time of the holding of the meeting. Such mailing, telegraphing or delivery as above provided shall be due, legal, and personal notice to such director.

Section 7. <u>Business of Meetings</u>. The transactions of any meeting of the Board of Directors, however called and noticed or wherever held, shall be as valid as though had at a meeting duly held after regular call and notice, if a quorum be present, and if, either before or after the meeting, each of the directors not present signs a written waiver of notice, or a consent to holding such meeting, or any approval of the minutes thereof. All such waivers, consents or approvals shall be filed with the corporate records or made a part of the minutes of the meeting.

Section 8. <u>Quorum; Voting; Adjourned Meetings</u>. A majority of the authorized number of directors shall be necessary to constitute a quorum for the transaction of business, except to adjourn as hereinafter provided. At each meeting of the Board of Directors at which a quorum is present, all questions and business shall be determined by the affirmative vote of a majority of the directors present, with one vote per director, unless a different vote is required by law or the Articles of Incorporation. Any action of a majority, although not at a regularly called meeting, and the record thereof, if assented to in writing by all the other members of the Board shall be as valid and effective in all respects as if passed by the Board in regular meeting.

A quorum of the directors may adjourn any directors meeting to meet again at a stated day and hour; provided, however, that in the absence of a quorum, a majority of the directors present at any directors meeting, either regular or special, may adjourn from time to time until the time fixed for the next regular meeting of the Board.

Notice of the time and place of holding an adjourned meeting need not be given to the absent directors if the time and place be fixed at the meeting adjourned.

Section 9. <u>Committees</u>. The Board of Directors may, by resolution adopted by a majority of the whole Board, designate one or more committees of the Board of Directors, each committee to consist of at least one or more of the directors of the corporation which, to the extent provided in the resolution, shall have and may exercise the power of the Board of Directors in the management of the business and affairs of the corporation and may have power to authorize the seal of the corporation to be affixed to all papers which may require it. Such committees shall have such name or names as may be determined from time to time by the Board of

Directors. The members of any such committee present at any meeting and not disqualified from voting may, whether or not they constitute a quorum, unanimously appoint another member of the Board of Directors to act at the meeting in the place of any absent or disqualified

member. At meetings of such committees, a majority of the members or alternate member shall constitute a quorum for the transaction of business, and the act of a majority of the members or alternate members at any meeting at which there is a quorum shall be the act of the committee.

The committees shall keep regular minutes of their proceedings and report the same to the Board of Directors.

Section 10. <u>Action Without Meeting</u>. Any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting if a written consent thereto is signed by all members of the Board of Directors or of such committee, as the case may be, and such written consent is filed with the minutes of proceedings of the Board or committee.

Section 11. <u>Special Compensation</u>. The directors may be paid their expenses of attendance at each meeting of the Board of Directors and may be paid a fixed sum for attendance at each meeting of the Board of Directors or a stated salary as director. No such payment shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed like reimbursement and compensation for attending committee meetings.

<u>ARTICLE III</u>

Notices

Section 1. <u>Notice of Meetings</u> . Notices of meetings shall be in writing and signed by the President or a Vice-President or the Secretary or an Assistant Secretary or by such other person or persons as the directors shall designate. Such notice shall state the purpose or purposes for which the meeting is called and the time and the place, which may be within or without this State, where it is to be held. A copy of such notice shall be either delivered personally to or shall be mailed, postage prepaid, to each stockholder of record entitled to vote at such meeting not less than ten (10) nor more than sixty (60) days before such meeting. If mailed, it shall be directed to a stockholder at his address as it appears upon the records of the corporation and upon such mailing of any such notice, the service thereof shall be complete and the time of the notice shall begin to run from the date upon which such notice is deposited in the mail for transmission to such stockholder. Personal delivery of any such notice to any officer of a corporation or association, or to any member of a partnership shall constitute delivery of such notice to such corporation, association or partnership. In the event of the transfer of stock after delivery of such notice of and prior to the holding of the meeting it shall not be necessary to deliver or mail notice of the meeting to the transferee.

Section 2. <u>Effect of Irregularly Called Meetings</u>. Whenever all parties entitled to vote at any meeting, whether of directors or stockholders, consent, either by a writing on the records of the meeting or filed with the secretary, or by presence at such meeting and oral consent entered on the minutes, or by taking part in the deliberations at such meeting without objection, the doings of such meeting shall be as valid as if had at a meeting regularly called and noticed, and at such meeting shall be as valid as if had at a meeting regularly called and noticed, and at such meeting any business may be transacted which is not excepted from the written consent or to the consideration of which no objection for want of notice is made at the time, and if any meeting be irregular for want of notice or of such consent, provided a quorum was present at such meeting, the proceedings of said meeting may be ratified and approved and rendered likewise valid and the regularity or defect therein waived by a writing signed by all parties having the right to vote at such meeting; and such consent or approval of stockholders may be by proxy or attorney, but all such proxies and powers of attorney must be in writing.

Section 3. <u>Waiver of Notice</u>. Whenever any notice whatever is required to be given under the provisions of the statutes of the Articles of Incorporation or of these Bylaws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time state therein, shall be deemed equivalent thereto.

<u>ARTICLE IV</u>

Officers

Section 1. <u>Election</u>. The officers of the corporation shall be chosen by the Board of Directors and shall be a Chief Executive Officer, President, a Secretary and a Treasurer, none of whom need be directors. Any person may hold two or more offices. The Board of Directors may appoint a Chairman of the Board, Vice-Chairman of the Board, Chief Executive Officer, one or more vice presidents, assistant treasurers and assistant secretaries and other Executive and Non- Executive Directors as deemed fit.

Section 2. <u>Chairman of the Board</u>. The Chairman of the Board shall preside at meetings of the stockholders and the Board of Directors and shall see that all orders and resolutions of the Board of Directors are carried into effect.

Section 3. <u>Vice-Chairman of the Board</u>. The Vice-Chairman shall, in the absence or disability of the Chairman of the Board, perform the duties and exercise the powers of the Chairman of the Board and shall perform such other duties as the Board of Directors may from time to time prescribe.

Section 4. Chief Executive Officer. The Chief Executive Officer shall be the Chief Executive Officer of the corporation and shall have active management of the business of the

corporation. The Chief Executive Officer shall execute on behalf of the corporation all instruments requiring such execution except to the extent the signing and execution thereof shall be expressly designated by the Board of Directors to some other officer or agent of the corporation.

Section 5. <u>President</u> . The President shall act under the direction of the Chief Executive Officer and in the absence or disability of the Chief Executive Officer shall perform the duties and exercise the powers of the Chief Executive Officer. They shall perform such other duties and have such other powers as the Chief Executive Officer or the Board of Directors may from time to time prescribe. The Board of Directors may designate one or more Executive Presidents or may otherwise specify the order of seniority of the Presidents. The duties and the powers of the President shall descend to the Vice-President in such specified order of seniority.

Section 6. <u>Secretary</u> . The Secretary shall act under the direction of the Chief Executive Officer. Subject to the direction of the Chief Executive Officer, the Secretary shall attend all meetings of the Board of Directors and all meetings of the stockholders and record the proceedings. The Secretary shall perform like duties for the standing committees when required. The Secretary shall give, or cause to be given, notice of all meetings of the

stockholders and special meetings of the Board of Directors, and shall perform such other duties as may be prescribed by the Chief Executive Officer or the Board of Directors.

Section 7. <u>Assistant Secretaries</u> . The Assistant Secretaries shall act under the direction of the Chief Executive Officer. In order of their seniority, unless otherwise determined by the Chief Executive Officer or the Board of Directors, they shall, in the absence or disability of the Secretary, perform the duties and exercise the powers of the Secretary. They shall perform such other duties and have such other powers as the Chief Executive Officer or the Board of Directors may from time to time prescribe.

Section 8. <u>Treasurer</u> . The Treasurer shall act under the direction of the Chief Executive Officer. Subject to the direction of the Chief Executive Officer he shall have custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation and shall deposit all monies and other valuable effects in the name and to the credit of the corporation in cash depositories as may be designated by the Board of Directors. The Treasurer shall disburse the funds of the corporation as may be ordered by the Chief Executive Officer or the Board of Directors, taking proper vouchers for such disbursements, and shall render to the Chief Executive Officer and the Board of Directors, at its regular meetings, or when the Board of Directors so requires, an account of all his transactions as Treasurer and of the financial condition of the corporation.

If required by the Board of Directors, the Treasurer shall give the corporation a bond in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of his office and for the restoration to the corporation, in case of his death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under his control belonging to the corporation.

Section 9. <u>Assistant Treasurers</u> . The Assistant Treasurers in the order of their seniority, unless otherwise determined by the Chief Executive Officer or the Board of Directors, shall, in the absence or disability of the Treasurer, perform the duties and exercise the powers of the Treasurer. They shall perform such other duties and have such other powers as the Chief Executive Officer or the Board of Directors from time to time prescribe.

Section 10. <u>Compensation</u>. The salaries and compensation of all officers of the corporation shall be fixed by the Board of Directors.

Section 11. <u>Removal; Resignation</u> . The officers of the corporation shall hold office at the pleasure of the Board of Directors. Any officer elected or appointed by the Board of Directors may be removed at any time by the Board of Directors. Any vacancy occurring in any office of the corporation by death, resignation, removal or otherwise shall be filled by the Board of Directors.

<u>ARTICLE V</u>

Capital Stock

Section 1. <u>Certificates</u>. Every stockholder shall be entitled to have a certificate signed by the Chief Executive Officer or President or a Vice-President or the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary of the corporation, certifying the number of shares owned by him in the corporation. If the corporation shall be authorized to issue more than one class of stock or more than one series of any class, the designations, preferences and relative, participating, optional or other special rights of the various classes of stock or series thereof and the qualifications, limitations or restrictions of such rights, shall be set forth in full or summarized on the face or back of the certificate, which the corporation shall issue to represent such stock.

If a certificate is signed (1) by a transfer agent other than the corporation or its employees or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) by a registrar other than the corporation or its employees, the signatures of the officers of the corporation may be facsimiles. In case any officer who has signed or whose facsimile signature has been placed upon a certificate shall cease to be such officer before such certificate is issued, such certificate may be issued with the same effect as though the person had not ceased to be such officer. The seal of the corporation, or a facsimile thereof, may, but need not be, affixed to certificates of stock.

Section 2. <u>Surrendered; Lost or Destroyed Certificates</u>. The Board of Directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the corporation alleged to have been lost or destroyed upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost or destroyed. When authorizing such issue of a new certificate or certificates, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost or destroyed certificate or certificates, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost or destroyed certificate or certificates, or his legal representative, to advertise the same in such manner as it shall require and/or give the corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificate alleged to have been lost or destroyed.

Section 3. <u>Replacement Certificates</u>. Upon surrender to the corporation or the transfer agent of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, it shall be the duty of the corporation, if it is satisfied that all provisions of the laws and regulations applicable to the corporation regarding transfer and ownership of shares have been complied with, to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books.

Section 4. <u>Record Date</u>. The Board of Directors may fix in advance a date not exceeding sixty (60) days nor less than ten (10) days preceding the date of any meeting of stockholders, or the date for the payment of any distribution, or the date for the allotment of rights, or the date when any change or conversion or exchange of capital stock shall go into effect, or a date in connection with obtaining the consent of stockholders for any purpose, as a record date for the determination of the stockholders entitled to notice of and to vote at any such meeting, and any adjournment thereof, or entitled to receive payment of any such distribution, or to give such

consent, and in such case, such stockholders, and only such stockholders as shall be stockholders of record on the date so fixed, shall be entitled to notice of and to vote at such meeting, or any adjournment thereof, or to receive payment of such distribution, or to receive such allotment of rights, or to exercise such rights, or to give such consent, as the case may be, notwithstanding any transfer of any stock on the books of the corporation after any such record date fixed as aforesaid.

Section 5. <u>Registered Owner</u>. The corporation shall be entitled to recognize the person registered on its books as the owner of shares to be the exclusive owner for all purposes including voting and distribution, and the corporation shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Nevada.

<u>ARTICLE VI</u>

General Provisions

Section 1. <u>Registered Office</u>. The registered office of the corporation in the State of Nevada shall be at such place as the board shall resolve.

The corporation may also have offices at such other places both within and without the State of Nevada as the Board of Directors may from time to time determine or the business of the corporation may require.

Section 2. <u>Distributions</u>. Distributions upon the capital stock, of the corporation, subject to the provisions of the Articles of Incorporation, if any, may be declared by the Board of Directors at any regular or special meeting, pursuant to law. Distributions may be paid in cash, in property or in shares of the capital stock, subject to the provisions of the Articles of Incorporation.

Section 3. <u>Reserves</u>. Before payment of any distribution, there may be set aside out of any funds of the corporation available for distributions such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing distributions or for repairing or maintaining any property of the corporation or for such other purpose as the directors shall think conducive to the interest of the corporation, and the directors may modify or abolish any such reserve in the manner in which it was created.

Section 4. <u>Checks; Notes</u>. All checks or demands for money and notes of the corporation shall be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time designate.

Section 5. <u>Fiscal Year</u>. The fiscal year of the corporation shall be fixed by resolution of the Board of Directors.

Section 6. <u>Corporate Seal</u>. The corporation may or may not have a corporate seal, as may from time to time be determined by resolution of the Board of Directors. If a corporate seal is

adopted, it shall have inscribed thereon the name of the corporation and the words "Corporate Seal" and "Nevada". The seal may be used by causing it or a facsimile thereof to be impressed or affixed or in any manner reproduced.

<u>ARTICLE VII</u>

Indemnification

Section 1. <u>Indemnification of Officers and Directors, Employees and Other Persons</u>. Every person who was or is a party or is threatened to be made a party to or is involved in any action, suite or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he or a person of whom he is the legal representative is or was a director or officer of the corporation or is or was serving at the request of the corporation or for its benefit as a director officer of another corporation, or as its representative in a partnership, joint venture, trust or other enterprise, shall be indemnified and held harmless to the fullest extent legally permissible under the general corporation law of the State of Nevada from time to time against all expenses, liability and loss (including attorneys' fees, judgments, fines and amounts paid or to be paid in settlement) reasonably incurred or suffered by him in connection therewith. The expenses of officers and directors incurred in defending a civil or criminal action, suit or proceeding must be paid by the corporation as they are incurred and in advance of the final disposition of the action, suit or proceeding upon receipt of an undertaking by or on behalf of the director officer to repay the amount if it is ultimately determined by a court of competent jurisdiction that he is not entitled to be indemnified by the corporation. Such right of indemnification shall be a contract right which may be enforced in any manner desired by such person. Such right of indemnification shall not be exclusive of any other right which such directors, officers or representatives may have or hereafter acquire and, without limiting the generality of such statement, they shall be entitled to their respective rights of indemnification under any bylaw, agreement, vote of stockholders, provision of law or otherwise, as well as their rights under this Article.

Section 2. <u>Insurance</u>. The Board of Directors may cause the corporation to purchase and maintain insurance on behalf of any person who is or was a director or officer of the corporation, or is or was serving at the request of the corporation as a director or officer of another corporation, or as its representative in a partnership, joint venture, trust or other enterprise against any liability asserted against such person or incurred in any such capacity or arising out of such status, whether or not the corporation would have the power to indemnify such person.

Section 3. <u>Further Bylaws</u>. The Board of Directors may from time to time adopt further Bylaws with respect to indemnification and may amend these and such Bylaws to provide at all times the fullest indemnification permitted by the General Corporation Law of the State of Nevada.

<u>ARTICLE VII</u>

Amendments

Section 1. <u>Amendments by Stockholders</u>. The Bylaws may be amended by a majority vote of all the stock issued and outstanding and entitled to vote for the election of directors of the stockholders, provided notice of intention to amend shall have been contained in the notice of the meeting.

Section 2. <u>Amendments by Board of Directors</u>. The Board of Directors by a majority vote of the whole Board at any meeting may amend these Bylaws, including Bylaws adopted by the stockholders, but the stockholders may from time to time specify particular provisions of the Bylaws which shall not be amended by the Board of Directors.

APPROVED AND ADOPTED this 01<sup>st</sup> day of <u>February</u>, 2024.

<u>x</u> <u>Vincent Napolitano</u> 

Secretary

## Exhibit 3.3

**FRANCISCO V. AGUILAR**

**Secretary of State**

**202 North Carson Street**

**Carson City, Nevada 89701-4201**

**(775) 684-5708**

**Website: www.nvsos.gov**

Business Number

**C17151-1999** 

Filing Number

**20233253686**

Filed On

**06/08/2023 10:24:04 AM**

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| |
|:---|
| **Certificate, Amendment or Withdrawal of Designation** |
| **NRS 78.1955, 78.1955(6)**  |
| ☒ **Certificate of Designation** |
| ☐ **Certificate of Amendment to Designation - Before Issuance of Class or Series** |
| ☐ **Certificate of Amendment to Designation - After Issuance of Class or Series** |
| ☐ **Certificate of Withdrawal of Certificate of Designation** |

---

**TYPE OR PRINT** · **USE DARK INK ONLY** · **DO NOT HIGHLIGHT**

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| | | | |
|:---|:---|:---|:---|
| **1. Entity information:**<br> , | &nbsp;&nbsp;Name of entity: | &nbsp;&nbsp;Name of entity: | &nbsp;&nbsp;Name of entity: |
| **1. Entity information:**<br> , | **Favo Capital, Inc.**<br> I | **Favo Capital, Inc.**<br> I | **Favo Capital, Inc.**<br> I |
| **1. Entity information:**<br> , | &nbsp;&nbsp;Entity or Nevada Business Identification Number (NVID): **NV19991312642** | &nbsp;&nbsp;Entity or Nevada Business Identification Number (NVID): **NV19991312642** | &nbsp;&nbsp;Entity or Nevada Business Identification Number (NVID): **NV19991312642** |
| **2. Effective date and time:** | For Certificate of Designation or Date: Time:<br>Amendment to Designation Only <br>(Optional): (must not be later than 90 days after the certificate is filed) | For Certificate of Designation or Date: Time:<br>Amendment to Designation Only <br>(Optional): (must not be later than 90 days after the certificate is filed) | For Certificate of Designation or Date: Time:<br>Amendment to Designation Only <br>(Optional): (must not be later than 90 days after the certificate is filed) |
| **3. Class or series of**<br> **stock:** (Certificate of Designation only) | &nbsp;&nbsp;The class or series of stock being designated within this filing:<br> **Series A Preferred Stock**  | &nbsp;&nbsp;The class or series of stock being designated within this filing:<br> **Series A Preferred Stock**  | &nbsp;&nbsp;The class or series of stock being designated within this filing:<br> **Series A Preferred Stock**  |
| **4. Information for amendment of class or series of stock:** | &nbsp;&nbsp;The original class or series of stock being amended within this filing: | &nbsp;&nbsp;The original class or series of stock being amended within this filing: | &nbsp;&nbsp;The original class or series of stock being amended within this filing: |
| **5. Amendment of class or series of stock:** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;☐ Certificate of Amendment to Designation- Before Issuance of Class or Series<br> As of the date of this certificate no shares of the class or series of stock have been issued. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;☐ Certificate of Amendment to Designation- Before Issuance of Class or Series<br> As of the date of this certificate no shares of the class or series of stock have been issued. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;☐ Certificate of Amendment to Designation- Before Issuance of Class or Series<br> As of the date of this certificate no shares of the class or series of stock have been issued. |
| **5. Amendment of class or series of stock:** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;☐ Certificate of Amendment to Designation- After Issuance of Class or Series<br> The amendment has been approved by the vote of stockholders holding shares in the corporation entitling them to exercise a majority of the voting power, or such greater proportion of the voting power as may be required by the articles of incorporation or the certificate of designation. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;☐ Certificate of Amendment to Designation- After Issuance of Class or Series<br> The amendment has been approved by the vote of stockholders holding shares in the corporation entitling them to exercise a majority of the voting power, or such greater proportion of the voting power as may be required by the articles of incorporation or the certificate of designation. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;☐ Certificate of Amendment to Designation- After Issuance of Class or Series<br> The amendment has been approved by the vote of stockholders holding shares in the corporation entitling them to exercise a majority of the voting power, or such greater proportion of the voting power as may be required by the articles of incorporation or the certificate of designation. |
| **6. Resolution:** Certificate of Designation and Amendment to Designation only) | &nbsp;&nbsp;&nbsp;&nbsp;By resolution of the board of directors pursuant to a provision in the articles of incorporation this certificate establishes OR amends the following regarding the voting powers, designations, preferences , limitations, restrictions and relative rights of the following class or series of stock.\* Series A Preferred Stock<br> SEE BELOW  | &nbsp;&nbsp;&nbsp;&nbsp;By resolution of the board of directors pursuant to a provision in the articles of incorporation this certificate establishes OR amends the following regarding the voting powers, designations, preferences , limitations, restrictions and relative rights of the following class or series of stock.\* Series A Preferred Stock<br> SEE BELOW  | &nbsp;&nbsp;&nbsp;&nbsp;By resolution of the board of directors pursuant to a provision in the articles of incorporation this certificate establishes OR amends the following regarding the voting powers, designations, preferences , limitations, restrictions and relative rights of the following class or series of stock.\* Series A Preferred Stock<br> SEE BELOW  |
| 7. **Withdrawal:** | <br> Designation being Withdrawn: Date of Designation: <br> No shares of the class or series of stock being withdrawn are outstanding.<br> The resolution of the board of directors authorizing the withdrawal of the certificate of designation establishing the class or series of stock: \* | <br> Designation being Withdrawn: Date of Designation: <br> No shares of the class or series of stock being withdrawn are outstanding.<br> The resolution of the board of directors authorizing the withdrawal of the certificate of designation establishing the class or series of stock: \* | <br> Designation being Withdrawn: Date of Designation: <br> No shares of the class or series of stock being withdrawn are outstanding.<br> The resolution of the board of directors authorizing the withdrawal of the certificate of designation establishing the class or series of stock: \* |
| **8. Signature:** (Required) | **x** **/s/ Vincent Napolitano**<br>| &nbsp;&nbsp;<br> Date: | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br> 06/08/2023 |
| **8. Signature:** (Required) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Signature of Officer | &nbsp;&nbsp;<br> Date: | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br> 06/08/2023 |
| **8. Signature:** (Required) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Signature of Officer | &nbsp;&nbsp;<br> Date: |  |

---

This form must be accompanied by appropriate fees.

Page 1 of 1

Revised: 1/1/2019

**_______________________________**

**CERTIFICATE OF DESIGNATION**

**OF**

**FAVO CAPITAL, INC.**

**Pursuant to Section 78.1955 of the** 

**Nevada Revised Statutes** 

**_______________________________**

**SERIES A PREFERRED STOCK** 

On behalf of Favo Capital, Inc., a Nevada corporation (the "Company"), the undersigned hereby certifies that the following resolution has been duly adopted by the board of directors of the Company (the "Board"):

RESOLVED, that, pursuant to the authority granted to and vested in the Board by the provisions of the amended and restated articles of incorporation of the Company, as amended (the "Articles of Incorporation"), there hereby is created, out of the fifty million (50,000,000) shares of preferred stock, par value $0.0001 per share, of the Company authorized by Article III of the Articles of Incorporation ("Preferred Stock"), a series of Series A Preferred Stock, consisting of twenty million (20,000,000) shares, which series shall have the following powers, designations, preferences and relative participating, optional and other special rights, and the following qualifications, limitations and restrictions:

The specific powers, preferences, rights and limitations of the Series A Preferred Stock are as follows:

1. **Designation and Number of Shares**. There shall hereby be created and established a series of preferred stock of the Company designated as "Series A Preferred Stock" (the "Preferred Shares "). The authorized number of Preferred Shares shall be twenty million (20,000,000) shares. Each Preferred Share shall have a par value of $0.0001. Capitalized terms not defined herein shall have the meaning as set forth in Section 17 below.

2. **Ranking**. Upon the liquidation, dissolution and winding up of the Company and any future series of preferred stock of pari passu rank to the Preferred Shares in respect of the preferences as to dividends, distributions and payments upon the liquidation, dissolution and winding up of the Company (collectively, the "Parity Stock"), all shares of capital stock of the Company, including the Common Stock and Series C Preferred Stock, shall be junior in rank to all Preferred Shares with respect to the preferences as to dividends, distributions and payments upon the liquidation, dissolution and winding up of the Company (collectively, the "Junior Stock"). The rights of all such shares of capital stock of the Company shall be subject to the rights, powers, preferences and privileges of the Preferred Shares. In the event of the merger or consolidation of the Company with or into another corporation, the Preferred Shares shall maintain their relative rights, powers, designations, privileges and preferences provided for herein and no such merger or consolidation shall result inconsistent therewith. For the avoidance of doubt, in no circumstance will a Preferred Share have any rights subordinate or otherwise inferior to the rights of shares of Parity Stock or Common Stock (as defined below).

3. **Conversion**. Each Preferred Share shall be convertible into validly issued, fully paid and non-assessable shares of Common Stock on the terms and conditions set forth in this Section 3.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) ***Holder's Conversion Right***. Subject to the provisions of Section 3(e), no sooner than twenty four (24) months or after the Initial Issuance Date, each holder of a Preferred Share (each, a "Holder " and collectively, the "Holders") shall be entitled to convert any whole number of Preferred Shares into validly issued, fully paid and non-assessable shares of Common Stock in accordance with Section 3(c) at the Conversion Rate (as defined below).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) ***Conversion Rate***. The number of validly issued, fully paid and non-assessable shares of Common Stock issuable upon conversion of each Preferred Share pursuant to Section 3(a) shall be determined according to the following formula (the "Conversion Rate "):

<u>Conversion Amount</u>

Conversion Price

No fractional shares of Common Stock are to be issued upon the conversion of any Preferred Shares. If the issuance would result in the issuance of a fraction of a share of Common Stock, the Company shall round such fraction of a share of Common Stock up to the nearest whole share.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) ***Mechanics of Conversion***. The conversion of each Preferred Share shall be conducted in the following manner:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) *Holder's Conversion*. To convert a Preferred Share into validly issued, fully paid and non-assessable shares of Common Stock on any date (a "Conversion Date "), a Holder shall deliver (whether via electronic mail, facsimile or otherwise), for receipt on or prior to 11:59 p.m., New York time, on such date, a copy of an executed notice of conversion of the share(s) of Preferred Shares subject to such conversion in the form attached hereto as **Exhibit I** (the "Conversion Notice") to the Company. If required by Section 3(c)(vi), within five (5) Trading Days following a conversion of any such Preferred Shares as aforesaid, such Holder shall surrender to a nationally recognized overnight delivery service for delivery to the Company the original certificates representing the share(s) of Preferred Shares (the "Preferred Share Certificates") so converted as aforesaid.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) *Company's Response*. On or before the first (1st) Trading Day following the date of receipt of a Conversion Notice, the Company shall transmit by electronic mail or facsimile an acknowledgment of confirmation, in the form attached hereto as **Exhibit II**, of receipt of such Conversion Notice to such Holder and the Company's transfer agent (the "Transfer Agent"), which confirmation shall constitute an instruction to the Transfer Agent to process such Conversion Notice in accordance with the terms herein. On or before the second (2nd) Trading Day following the date of receipt by the Company of such Conversion Notice, the Company shall (1) provided that (x) the Transfer Agent is participating in the Depository Trust Company ("DTC") Fast Automated Securities Transfer Program and (y) Common Stock shares to be so issued are otherwise eligible for resale pursuant to Rule 144 promulgated under the Securities Act of 1933, as amended, credit such aggregate number of shares of Common Stock to which such Holder shall be entitled to such Holder's or its designee's balance account with DTC through its Deposit/Withdrawal at Custodian system, or (2) if either of the immediately preceding clauses (x) or (y) are not satisfied, issue and deliver (via reputable overnight courier) to the address as specified in such Conversion Notice, a certificate, registered in the name of such Holder or its designee, for the number of shares of Common Stock to which such Holder shall be entitled. If the number of Preferred Shares represented by the Preferred Share Certificate(s) submitted for conversion pursuant to Section 3(c)(vi) is greater than the number of Preferred Shares being converted, then the Company shall if requested by such Holder, as soon as practicable and in no event later than three (3) Trading Days after receipt of the Preferred Share Certificate(s) and at its own expense, issue and deliver to such Holder (or its designee) a new Preferred Share Certificate representing the number of Preferred Shares not converted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) *Record Holder*. The Person or Persons entitled to receive the shares of Common Stock issuable upon a conversion of Preferred Shares shall be treated for all purposes as the record holder or holders of such shares of Common Stock on the Conversion Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) *Company's Failure to Timely Convert*. If the Company shall fail, for any reason or for no reason, to issue to a Holder within three (3) Trading Days after the Company's receipt of a Conversion Notice (whether via electronic mail, facsimile or otherwise) (the "Share Delivery Deadline "), a certificate for the number of shares of Common Stock to which such Holder is entitled and register such shares of Common Stock on the Company's share register or to credit such Holder's or its designee's balance account with DTC for such number of shares of Common Stock to which such Holder is entitled upon such Holder's conversion of any Preferred Shares (as the case may be) (a "Conversion Failure"), then, in addition to all other remedies available to such Holder, such Holder, upon written notice to the Company, may void its Conversion Notice with respect to, and retain or have returned (as the case may be) any Preferred Shares that have not been converted pursuant to such Holder's Conversion Notice, provided that the voiding of a Conversion Notice shall not affect the Company's obligations to make any payments which have accrued prior to the date of such notice pursuant to the terms of this Certificate of Designations or otherwise. In addition to the foregoing, if within three (3) Trading Days after the Company's receipt of a Conversion Notice (whether via electronic mail, facsimile or otherwise), the Company shall fail to issue and deliver a certificate to such Holder and register such shares of Common Stock on the Company's share register or credit such Holder's or its designee's balance account with DTC for the number of shares of Common Stock to which such Holder is entitled upon such Holder's conversion hereunder (as the case may be), and if on or after such third (3rd) Trading Day such Holder (or any other Person in respect, or on behalf, of such Holder) purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by such Holder of all or any portion of the number of shares of Common Stock, or a sale of a number of shares of Common Stock equal to all or any portion of the number of shares of Common Stock, issuable upon such conversion that such Holder so anticipated receiving from the Company, then, in addition to all other remedies available to such Holder, the Company shall, within three (3) Business Days after such Holder's request, which request shall include reasonable documentation of all broker fees, costs and expenses and in such Holder's discretion, either (i) pay cash to such Holder in an amount equal to such Holder's total purchase price (including brokerage commissions and other reasonable out of pocket expenses related to the Buy-In, if any) for the shares of Common Stock so purchased (including, without limitation, by any other Person in respect, or on behalf, of such Holder) (the "Buy-In Price"), at which point the Company's obligation to so issue and deliver such certificate or credit such Holder's balance account with DTC for the number of shares of Common Stock to which such Holder is entitled upon such Holder's conversion hereunder (as the case may be) (and to issue such shares of Common Stock) shall terminate, or (ii) promptly honor its obligation to so issue and deliver to such Holder a certificate or certificates representing such shares of Common Stock or credit such Holder's balance account with DTC for the number of shares of Common Stock to which such Holder is entitled upon such Holder's conversion hereunder (as the case may be) and pay cash to such Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of shares of Common Stock multiplied by (B) the sale price of the Common Stock at which the sell order giving rise to such purchase obligation was executed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) *Pro Rata Conversion*. In the event the Company receives a Conversion Notice from more than one Holder for the same Conversion Date and the Company can convert some, but not all, of such Preferred Shares submitted for conversion, the Company shall convert from each Holder electing to have Preferred Shares converted on such date a pro rata amount of such Holder's Preferred Shares submitted for conversion on such date based on the number of Preferred Shares submitted for conversion on such date by such Holder relative to the aggregate number of Preferred Shares submitted for conversion on such date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) *Book-Entry*. Notwithstanding anything to the contrary set forth in this Section 3, upon conversion of any Preferred Shares in accordance with the terms hereof, no Holder thereof shall be required to physically surrender the certificate representing the Preferred Shares to the Company following conversion thereof unless (A) the full or remaining number of Preferred Shares represented by the certificate are being converted (in which event such certificate(s) shall be delivered to the Company as contemplated by this Section 3(c)(vi) or (B) such Holder has provided the Company with prior written notice (which notice may be included in a Conversion Notice) requesting reissuance of Preferred Shares upon physical surrender of any Preferred Shares. Each Holder and the Company shall maintain records showing the number of Preferred Shares so converted by such Holder and the dates of such conversions or shall use such other method, reasonably satisfactory to such Holder and the Company, so as not to require physical surrender of the certificate representing the Preferred Shares upon each such conversion. In the event of any dispute or discrepancy, such records of such Holder establishing the number of Preferred Shares to which the record holder is entitled shall be controlling and determinative in the absence of manifest error. A Holder and any transferee or assignee, by acceptance of a certificate, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of any Preferred Shares, the number of Preferred Shares represented by such certificate may be less than the number of Preferred Shares stated on the face thereof. Each certificate for Preferred Shares shall bear the following legend:

ANY TRANSFEREE OR ASSIGNEE OF THIS CERTIFICATE SHOULD CAREFULLY REVIEW THE TERMS OF THE CORPORATION'S CERTIFICATE OF DESIGNATIONS RELATING TO THE SHARES OF SERIES A PREFERRED STOCK REPRESENTED BY THIS CERTIFICATE, INCLUDING SECTION 3(c)(vi) THEREOF. THE NUMBER OF SHARES OF SERIES A PREFERRED STOCK REPRESENTED BY THIS CERTIFICATE MAY BE LESS THAN THE NUMBER OF SHARES OF SERIES A PREFERRED STOCK STATED ON THE FACE HEREOF PURSUANT TO SECTION 3(c)(vi) OF THE CERTIFICATE OF DESIGNATIONS RELATING TO THE SHARES OF SERIES A PREFERRED STOCK REPRESENTED BY THIS CERTIFICATE.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) ***Taxes***. The Company shall pay any and all documentary, stamp, transfer (but only in respect of the registered holder thereof), issuance and other similar taxes that may be payable with respect to the issuance and delivery of shares of Common Stock upon the conversion of Preferred Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) ***Limitation on Beneficial Ownership***. Notwithstanding anything to the contrary contained in this Certificate of Designations, the Preferred Shares held by a Holder shall not be convertible by such Holder, and the Company shall not effect any conversion of any Preferred Shares held by such Holder, to the extent (but only to the extent) that such Holder or any of its affiliates would beneficially own in excess of 9.99% (the "Maximum Percentage ") of the Common Stock. To the extent the above limitation applies, the determination of whether the Preferred Shares held by such Holder shall be convertible (vis-à-vis other convertible, exercisable or exchangeable securities owned by such Holder or any of its affiliates) and of which such securities shall be convertible, exercisable or exchangeable (as among all such securities owned by such Holder and its affiliates) shall, subject to such Maximum Percentage limitation, be determined on the basis of the first submission to the Company for conversion, exercise or exchange (as the case may be). No prior inability of a Holder to convert Preferred Shares, or of the Company to issue shares of Common Stock to such Holder, pursuant to this Section

3(e) shall have any effect on the applicability of the provisions of this Section 3(e) with respect to any subsequent determination of convertibility or issuance (as the case may be). For purposes of this Section 3(e), beneficial ownership and all determinations and calculations (including, without limitation, with respect to calculations of percentage ownership) shall be determined in accordance with Section 13(d) of the 1934 Act and the rules and regulations promulgated thereunder. The provisions of this Section 3(e) shall be implemented in a manner otherwise than in strict conformity with the terms of this Section 3(e) to correct this Section 3(e) (or any portion hereof) which may be defective or inconsistent with the intended Maximum Percentage beneficial ownership limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such Maximum Percentage limitation. The limitations contained in this Section 3(e) shall apply to a successor holder of Preferred Shares. The Company may not waive this Section 3(e) without the consent of holders of a majority of its Common Stock. For any reason at any time, upon the written or oral request of a Holder, the Company shall within one (1) Business Day confirm orally and in writing to such Holder the number of shares of Common Stock then outstanding, including by virtue of any prior conversion or exercise of convertible or exercisable securities into Common Stock, including, without limitation, pursuant to this Certificate of Designation. By written notice to the Company, any Holder may increase or decrease the Maximum Percentage to any other percentage; provided that (i) any such increase will not be effective until the 61st day after such notice is delivered to the Company, and (ii) any such increase or decrease will apply only to such Holder sending such notice and not to any other Holder.

4. **Adjustment of Conversion Price.** Without limiting any provision of Section 9, if the Company at any time on or after the Initial Issuance Date subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares of Common Stock into a greater number of shares, the Conversion Price in effect immediately prior to such subdivision will be proportionately reduced. Without limiting any provision of Section 9, if the Company at any time on or after the Initial Issuance Date combines (by combination, reverse stock split or otherwise) one or more classes of its outstanding shares of Common Stock into a smaller number of shares, the Conversion Price in effect immediately prior to such combination will be proportionately increased. Any adjustment pursuant to this Section 4 shall become effective immediately after the effective date of such subdivision or combination. If any event requiring an adjustment under this Section 4 occurs during the period that a Conversion Price is calculated hereunder, then the calculation of such Conversion Price shall be adjusted appropriately to reflect such event.

5. **Authorized Shares**. The Company shall at all times when any Preferred Shares shall be outstanding, reserve and keep available out of its authorized but unissued Common Stock, such number of shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding Preferred Shares. If at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the redemption of all outstanding shares of the Preferred Shares, the Company will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized by unissued shares of Common Stock to such number of shares as shall be sufficient for such purpose.

6. **Voting Rights**. On any matter presented to the stockholders of the Company for their action or consideration at any meeting of stockholders of the Company (or by written consent of stockholders in lieu of a meeting), each Holder, in its capacity as such, shall be entitled to cast the number of votes equal to the number of whole shares of Common Stock into which the Preferred Shares beneficially owned by such Holder are convertible as of the record date for determining stockholders entitled to vote on or consent to such matter (taking into account all Preferred Shares beneficially owned by such Holder). Except as otherwise required by law or by the other provisions of the Certificate of Incorporation, the Holders, in their capacity as such, shall vote together with the holders of Common Stock and any other class or series of stock entitled to vote thereon as a single class. Notwithstanding anything to the contrary contained in this Certificate of Designation, no Holder shall be permitted to vote the Preferred Shares beneficially owned by such Holder in excess of the Maximum Percentage.

To the extent the above limitation applies to a Holder, the total votes entitled to be cast by such Holder, in its capacity as such, shall be proportionately decreased among the Preferred Shares beneficially owned by such Holder. No prior inability of a Holder to vote Preferred Shares pursuant to this Section 6 shall have any effect on the applicability of the provisions of this Section 6 with respect to any subsequent determination of voting. For purposes of this Section 6, beneficial ownership and all determinations and calculations (including, without limitation, with respect to calculations of percentage ownership) shall be determined in accordance with Section 13(d) of the 1934 Act and the rules and regulations promulgated thereunder. The limitations contained in this Section 6 shall apply to a successor holder of Preferred Shares. For any reason at any time, upon the written or oral request of a Holder, the Company shall within one (1) Business Day confirm orally and in writing to such Holder the number of shares of Common Stock then outstanding, including by virtue of any prior conversion or exercise of convertible or exercisable securities into Common Stock, including, without limitation, pursuant to this Certificate of Designation.

7. **Dividends**. Each Holder shall be entitled to receive an annual dividend of six percent (6%) of the Stated Value times the number of Preferred Shares held by such Holder. Dividends on the Preferred Shares shall be payable on a quarterly basis beginning at the end of the Company's fiscal quarter following the original issue date ("Issuance Date"). Dividends on the Preferred Shares are payable, at the Company's option, in (a) cash or (b) shares of the Company's Common Stock or a combination thereof.

8. **Liquidation, Dissolution, Winding-Up**. In the event of a Liquidation Event, the Holders shall be entitled to receive in cash out of the assets of the Company, whether from capital or from earnings available for distribution to its stockholders (the "Liquidation Funds"), before any amount shall be paid to the holders of any of shares of Junior Stock, an amount per Preferred Share equal to the amount per share such Holder would receive if such Holder converted such Preferred Shares into Common Stock immediately prior to the date of such payment, provided that if the Liquidation Funds are insufficient to pay the full amount due to the Holders and holders of shares of Parity Stock, then each Holder and each holder of Parity Stock shall receive a percentage of the Liquidation Funds equal to the full amount of Liquidation Funds payable to such Holder and such holder of Parity Stock as a liquidation preference, in accordance with their respective certificate of designations (or equivalent), as a percentage of the full amount of Liquidation Funds payable to all holders of Preferred Shares and all holders of shares of Parity Stock. All the preferential amounts to be paid to the Holders under this Section 8 shall be paid or set apart for payment before the payment or setting apart for payment of any amount for, or the distribution of any Liquidation Funds of the Company to the holders of shares of Junior Stock in connection with a Liquidation Event as to which this Section 8 applies.

9. **Participation**. In addition to any adjustments pursuant to Section 4, the Holders shall, as holders of Preferred Shares, be entitled to receive such dividends paid and distributions made to the holders of shares of Common Stock to the same extent as if such Holders had converted each Preferred Share held by each of them into shares of Common Stock (without regard to any limitations on conversion herein or elsewhere) and had held such shares of Common Stock on the record date for such dividends and distributions. Payments under the preceding sentence shall be made concurrently with the dividend or distribution to the holders of shares of Common Stock (provided, however, to the extent that a Holder's right to participate in any such dividend or distribution would result in such Holder exceeding the Maximum Percentage, then such Holder shall not be entitled to participate in such dividend or distribution to such extent (or the beneficial ownership of any such shares of Common Stock as a result of such dividend or distribution to such extent) and such dividend or distribution to such extent shall be held in abeyance for the benefit of such Holder until such time, if ever, as its right thereto would not result in such Holder exceeding the Maximum Percentage).

10. **Redemption**. The Company may, in its sole discretion, elect to redeem all or a portion of the outstanding Preferred Shares at the Redemption Amount ("Voluntary Redemption"), upon ten (10) days' prior written notice (such effective date of redemption, the "Voluntary Redemption Date"). The Company shall provide written notice to the Holders ten (10) days prior to the Voluntary Redemption Date specifying the Voluntary Redemption Date (the "Redemption Notice"). A Redemption Notice shall also include a provision to allow the Holders to elect to convert the Preferred Shares into Common Stock rather than accept the Redemption Amount. The Redemption Amount shall be delivered to the Holders within ten (10) business days of the Voluntary Redemption Date. As used herein, the term "Redemption Amount" shall equal the Stated Value. If the Company does not redeem all of the outstanding Preferred Shares, but instead opts for a partial redemption, it must be done in at least $250,000 increments and for every $250,000 redeemed the Company will issue to the Holder a warrant to purchase 1,000,000 shares of the Company's Common Stock at an exercise price of $0.25 share.

11. **Vote to Change the Terms of or Issue Preferred Shares**. In addition to any other rights provided by law, except where the vote or written consent of the holders of a greater number of shares is required by law or by another provision of the Certificate of Incorporation, without first obtaining the affirmative vote at a meeting duly called for such purpose or the written consent without a meeting of the Required Holders, voting together as a single class, the Company shall not: (a) amend or repeal any provision of, or add any provision to, its Certificate of Incorporation or bylaws, or file any certificate of designations or certificate of amendment, if such action would adversely alter or change in any respect the preferences, rights, privileges or powers, or restrictions provided for the benefit, of the Preferred Shares, regardless of whether any such action shall be by means of amendment to the Certificate of Incorporation or by merger, consolidation or otherwise; provided, however, the Company shall be entitled, without the consent of the Required Holders unless such consent is otherwise required by Nevada law, to amend the Certificate of Incorporation to effectuate one or more reverse stock splits of its issued and outstanding Common Stock for purposes of maintaining compliance with the rules and regulations of the Principal Market; or (b) whether or not prohibited by the terms of the Preferred Shares, circumvent a right of the Preferred Shares.

12. **Lost or Stolen Certificates**. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of any certificates representing Preferred Shares (as to which a written certification and the indemnification contemplated below shall suffice as such evidence), and, in the case of loss, theft or destruction, of an indemnification undertaking by the applicable Holder to the Company in customary and reasonable form and, in the case of mutilation, upon surrender and cancellation of the certificate(s), the Company shall execute and deliver new certificate(s) of like tenor and date.

13. **Failure or Indulgence Not Waiver**. No failure or delay on the part of a Holder in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege. No waiver shall be effective unless it is in writing and signed by an authorized representative of the waiving party. This Certificate of Designations shall be deemed to be jointly drafted by the Company and all Holders and shall not be construed against any Person as the drafter hereof.

14. **Notices**. The Company shall provide each Holder of Preferred Shares with prompt written notice of all actions taken pursuant to the terms of this Certificate of Designation, including in reasonable detail a description of such action and the reason therefor. Whenever notice is required to be given under this Certificate of Designation, unless otherwise provided herein, such notice must be in writing and shall be given in accordance with information provided by Holder..

15. **Preferred Shares Register**. The Company shall maintain at its principal executive offices (or such other office or agency of the Company as it may designate by notice to the Holders), a register for the Preferred Shares, in which the Company shall record the name, address, E-mail address and facsimile number of the Persons in whose name the Preferred Shares have been issued, as well as the name and address of each transferee. The Company may treat the Person in whose name any Preferred Shares is registered on the register as the owner and holder thereof for all purposes, notwithstanding any notice to the contrary, but in all events recognizing any properly made transfers.

16. **Stockholder Matters; Amendment**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) ***Stockholder Matters***. Any stockholder action, approval or consent required, desired or otherwise sought by the Company pursuant to Nevada Law, the Articles of Incorporation, this Certificate of Designation or otherwise with respect to the issuance of Preferred Shares may be effected by written consent of the Company's stockholders or at a duly called meeting of the Company's stockholders, all in accordance with the applicable rules and regulations of Nevada law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) **Amendment**. This Certificate of Designation or any provision hereof may be amended by obtaining the affirmative vote at a meeting duly called for such purpose, or written consent without a meeting in accordance with Nevada law, of the Required Holders, voting separate as a single class, and with such other stockholder approval, if any, as may then be required pursuant to Nevada law and the Articles of Incorporation.

17. **Certain Defined Terms**. For purposes of this Certificate of Designation, the following terms shall have the following meanings:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) "**1934 Act**" means the Securities Exchange Act of 1934, as amended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) "**Business Day**" means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law to remain closed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) "**Common Stock**" means (i) the Company's shares of common stock, $0.0001 par value per share, and (ii) any capital stock into which such common stock shall have been changed or any share capital resulting from a reclassification of such common stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) "**Conversion Amount**" means, with respect to each Preferred Share, as of any Conversion Date or other applicable date of determination, the Stated Value.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) "**Conversion Price**" means, with respect to each Preferred Share, as of any Conversion Date or other applicable date of determination, $0.25, subject to adjustment as provided herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) "**Convertible Securities**" means any stock or other security (other than Options) that is at any time and under any circumstances, directly or indirectly, convertible into, exercisable or exchangeable for, or which otherwise entitles the holder thereof to acquire, any shares of Common Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) "**Initial Issuance Date**" means June 5, 2023.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) "**Liquidation Event**" means, whether in a single transaction or series of transactions, the voluntary or involuntary liquidation, dissolution or winding up of the Company or such Subsidiaries the assets of which constitute all or substantially all of the assets of the business of the Company and its Subsidiaries, taken as a whole.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) "**Options**" means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) "**Person**" means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity or a government or any department or agency thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) "**Principal Market**" means the Pink tier of the OTC Markets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r) "**Required Holders**" means the holders of at least 2/3rds of the outstanding Preferred Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(u) "**Stated Value**" shall mean $0.25 per share, subject to adjustment for stock splits, stock dividends, recapitalizations, reorganizations, reclassifications, combinations, subdivisions or other similar events occurring after the Initial Issuance Date with respect to the Preferred Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) "**Subsidiary**" means any Person in which the Company, directly or indirectly, (i) owns a majority of the outstanding capital stock or holds a majority of equity or similar interest of such Person or (ii) controls or operates all or any part of the business, operations or administration of such Person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(w) "**Trading Day**" means any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the Common Stock is then traded, provided that "Trading Day" shall not include any day on which the Common Stock is scheduled to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock is suspended from trading during the final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing time of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York time) unless such day is otherwise designated as a Trading Day in writing by the Required Holders.

[*signature page follows*]

IN WITNESS WHEREOF, the Company has caused this Certificate of Designations of Series A Preferred Stock of Favo Capital, Inc. to be signed by its Chief Executive Officer on this 5th day of June, 2023.

---

| | | |
|:---|:---|:---|
| **FAVO CAPITAL, INC.** | **FAVO CAPITAL, INC.** | **FAVO CAPITAL, INC.** |
| By: | /s/ Vincent Napolitano | /s/ Vincent Napolitano |
|  | Name: | Vincent Napolitano |
|  | Title: | Chief Executive Officer |

---

[*Signature Page to Certificate of Designation of Series A Preferred Stock*]

## Exhibit 3.4

**BARBARA K. CEGAVSKE**

**Secretary of State**

**202 North Carson Street**

**Carson City, Nevada 89701-4201**

**(775) 684-5708**

**Website: www.nvsos.gov** 

Document Number

 **20180523890-38**

Filing Date and Time

**12/05/2018 10:24 AM**

Entity Number

**C17151-1999**

**Certificate of Designation**<br> (PURSUANT TO NRS 78.1955)<br>

**USE BLACK INK ONLY - DO NOT HIGHLIGHT**

**ABOVE SPACE IS FOR OFFICE USE ONLY**

**<u>Certificate of Designation For</u>**

**<u>Nevada Profit Corporations</u>**

**(Pursuant to NRS 78.1955)**

&nbsp;&nbsp;&nbsp;&nbsp;**1.** **Name of corporation:**

BEESTON ENTERPRISES LTD.

&nbsp;&nbsp;&nbsp;&nbsp;**2.** **By resolution of the board of directors pursuant to a provision in the articles of incorporation this certificate establishes the following regarding the voting powers, designations, preferences, limitations, restrictions and relative rights of the following class or series of stock.**

RESOLVED, that, pursuant to the authority granted to and vested in the Board by the provisions of the articles of incorporation of the Corporation (the "Articles of Incorporation"), there hereby is created, out of the Twenty-five Million (25,000,000) shares of preferred stock, par value $0.001 per share, of the Corporation authorized by the Corporation's Articles of Incorporation ("Preferred Stock"), Series C Preferred Stock, consisting of Twenty-five Million (25,000,000) shares, which series shall have the following powers, designations, preferences and relative participating, optional and other special rights, and the following qualifications, limitations and restrictions:

The specific powers, preferences, rights and limitations of the Series C Preferred Stock are as follows:

&nbsp;&nbsp;&nbsp;&nbsp;1. Dividend Provisions. Subject to the rights of any existing series of Preferred Stock or to the rights of any series of Preferred Stock which may from time to time hereafter come into existance ... (SEE ATTACHED)

&nbsp;&nbsp;&nbsp;&nbsp;3. Effective date of filing: (optional)

&nbsp;&nbsp;&nbsp;&nbsp;4. Signature: (required)

(must not be later than 90 days after the certificate is filed)

**<u>/s/ David Lazar</u>**

**Signature of Officer**

**Filing Fee: $175.00**

**IMPORTANT:** Failure to include any of the above information and submit with the proper fees may cause this filing to be rejected.

Revised: 1-5-15<br>

This form must be accompanied by appropriate fees. Nevada Secretary of State Stock Designation

**CERTIFICATE OF DESIGNATION OF**

**BEESTON** **ENTERPRISES LTD.**

**Pursuant** **to Section 78.1955 of the Nevada Revised Statutes**

**SERIES C PREFERRED STOCK**

On behalf of BEESTON ENTERPRISES LTD., a Nevada corporation (the <u>"Corporation")</u>, the undersigned hereby certifies that the following resolution has been duly adopted by the board of directors of the Corporation (the <u>"Board"):</u>

RESOLVED, that, pursuant to the authority granted to and vested in the Board by the provisions of the articles of incorporation of the Corporation (the <u>"Articles</u> <u>of Incorporation")</u>, there hereby is created, out of the Twenty-five Million (25,000,000) shares of preferred stock, par value $0.001 per share, of the Corporation authorized by the Corporation's Articles of Incorporation <u>("Preferred</u> <u>Stock")</u>, Series C Preferred Stock, consisting of Twenty-five Million (25,000,000) shares, which series shall have the following powers, designations, preferences and relative participating, optional and other special rights, and the following qualifications, limitations and restrictions:

The specific powers, preferences, rights and limitations of the Series C Preferred Stock are as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;l. **<u>Dividend Provisions.</u>** Subject to the rights of any existing series of Preferred Stock or to the rights of any series of Preferred Stock which may from time to time hereafter come into existence, the holders of shares of Series C Preferred Stock shall be entitled to receive dividends, out of any assets legally available therefor, upon any payment of any dividend (payable other than in Common Stock or other securities and rights convertible into or entitling the holder thereof to receive, directly or indirectly, additional shares of Common Stock of the Corporation) on the Common Stock of the Corporation, as and if declared by the Board of Directors, as if the Series C Preferred Stock had been converted into Common Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.  **<u>Liquidation Preference.</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) In the event of any liquidation, dissolution or winding up of the Corporation, either voluntary or involuntary, subject to the rights of any existing series of Preferred Stock or to the rights of any series of Preferred Stock which may from time to time hereafter come into existence, the holders of the Series C 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 Common Stock by reason of their ownership thereof, an amount per share equal to the price per share actually paid to the Corporation upon the initial issuance of the Series C Preferred Stock (each, the "the Original Issue Price") for each share of Series C Preferred Stock then held by them, plus declared but unpaid dividends. Unless the Corporation can establish a different

Original Issue Price in connection with a particular sale of Series C Preferred Stock, the Original issue price shall be $0.00 I per share for the Series C Preferred Stock. If, upon the occurrence of any liquidation, dissolution or winding up of the Corporation, the assets and funds thus distributed among the holders of the Series C Preferred Stock shall be insufficient to permit the payment to such holders of the full aforesaid preferential amounts, then, subject to the rights of any existing series of Preferred Stock or to the rights of any series of Preferred Stock which may from time to time hereafter come into existence, the entire assets and funds of the corporation legally available for distribution shall be distributed ratably among the holders of the each series of Preferred Stock in proportion to the preferential amount each such holder is otherwise entitled to receive.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Upon the completion of the distribution required by Section 2(a) above and any other distribution that may be required with respect to the rights of any existing series of Preferred Stock or to the rights of any series of Preferred Stock which may from time to time hereafter come into existence, if assets remain in the Corporation, the remaining assets shall be distributed to the holders of the Common Stock until such time as the holders of the Common stock shall have received a return of the capital originally contributed thereby. Thereafter, if assets remain in the Corporation, all remaining assets shall be distributed to all holders of Common Stock and to each series of Preferred Stock, *pro rata* based on the number of shares of Common Stock held by each (assuming conversion of all such Preferred Stock into Common Stock).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) For purposes of this Section 2, 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 (including, without limitation, any reorganization, merger or consolidation, but excluding any merger effected exclusively for the purpose of changing the domicile of the Corporation); or (ii) a sale of all or substantially all of the assets of the Corporation, <u>unless</u> the Corporation's stockholders of record as constituted immediately prior to such acquisition or sale will, immediately after such acquisition or sale (by virtue of securities issued as consideration for the Corporation's acquisition or sale or otherwise) hold at least fifty percent (50%) of the voting power of the surviving or acquiring entity in approximately the same relative percentages after such acquisition or sale as before such acquisition or sale.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) In any of the events specified in (c) above, if the consideration received by the corporation is other than cash, its value will be deemed its fair market value. Any securities shall be valued as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Securities not subject to investment letter or other similar restrictions on free marketability:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) If traded on a securities exchange, the value shall be deemed to be the average of the closing prices of the securities on such exchange over the· thirty-day period ending three (3) days prior to the closing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) If actively traded over-the-counter, the value shall be deemed to be the average of the closing bid or sale prices (whichever is applicable) over the thirty-day period ending three (3) days prior to the closing; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) If there is no active public market, the value shall be the fair market value thereof, as determined in good faith by the Board of Directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) The method of valuation of securities subject to investment letter or other restrictions on free marketability (other than restrictions arising solely by virtue of a stockholder's status as an affiliate or former affiliate) shall be to make an appropriate discount from the market value determined as above in (i) (A), (B) or (C) to reflect the approximate fair market value thereof, as mutually detennined by the Corporation and the holders of at least a majority of the voting power of all then outstanding shares of Preferred Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) In the event the requirements of Section 2(c) are not complied with, the Corporation shall forthwith either:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) cause such closing to be postponed until such time as the requirements of this Section 2 have been complied with; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) cancel such transaction, in which event the rights, preferences and privileges of the holders of the Series C Preferred Stock shall revert to and be the same as such rights, preferences and privileges existing immediately prior to the date of the first notice referred to in Section 2(c)(iv) hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) The Corporation shall give each holder of record of Series C Preferred Stock written notice of such impending transaction not later than twenty (20) days prior to the stockholders' meeting called to approve such transaction, or twenty (20) days prior to the closing of such transaction, whichever is earlier, and shall also notify such holders in writing of the final approval of such transaction. The first of such notices shall describe the material terms and conditions of the impending transaction and the provisions of this Section 2, and the corporation shall thereafter give such holders prompt notice of any material changes. The transaction shall in no event take place sooner than twenty (20) days after the corporation has given the first notice provided for herein or sooner than ten (I0) days after the corporation has given notice of any material changes provided for herein; provided, however, that time periods set forth in this paragraph may be shortened upon the written consent of the holders of Series C Preferred Stock that are entitled to such notice rights or similar notice rights and that represent at least a majority of the voting power of all then outstanding shares of such Series C Preferred Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. **<u>Redemption.</u>** The Series C Preferred Stock shares are non• redeemable other than upon the mutual agreement of the Company and the holder of shares to be redeemed, and even in such case only to the extent pennitted by this Certificate of Designation, the Corporation's Articles of Incorporation and applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. **<u>Conversion.</u>** The holders of the Series C Preferred Stock, shall have conversion rights as follows (the <u>"Conversion</u> <u>Rights")</u>:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) **<u>Right</u>** **<u>to Convert.</u>** Subject to Section 4(c), each share of Series C 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 such stock, into four (4) fully paid and nonassessable shares of Common Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) **<u>Automatic Conversion.</u>** Each share of Series C Preferred Stock shall automatically be converted into four (4) shares of Common Stock upon the earlier of (i) except as provided below in Section 4(c), the Corporation's sale of its Common Stock in a public offering pursuant to a registration statement under the Securities Act of 1933, as amended; (ii) a liquidation, dissolution or winding up of the Corporation as defined in section 2(c) above but subject to any liquidation preference required by section 2(a) above; or (iii) the date specified by written consent or agreement of the holders of a majority of the then outstanding shares of Series C Preferred Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) **<u>Mechanics of</u>** **<u>Conversion.</u>** Before any holder of Series C Preferred Stock shall be entitled to convert the same into shares of Common Stock, such holder shall surrender the certificate or certificates therefor, duly endorsed, at the office of the Corporation or of any transfer agent for the Series C Preferred Stock, and shall give written notice to the Corporation at its principal corporate office, of the election to convert the same and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder of Series C Preferred Stock, or to the nominee or nominees of such holder, a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled as aforesaid. 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 Series C 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 as of such date. If the conversion is in connection with an underwritten offering of securities registered pursuant to the Securities Act of 1933, the conversion may, at the option of any holder tendering Series C Preferred Stock for conversion, be conditioned upon the closing with the underwriters of the sale of securities pursuant to such offering, in which event the person(s) entitled to receive Common Stock upon conversion of such Series C Preferred Stock shall not be deemed to have converted such Series C Preferred Stock until immediately prior to the closing of such sale of securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) **<u>Fixed Conversion Ratio.</u>** The conversion ratio of the Series C Preferred Stock set forth in section 2(a) or section 2(b), above, shat I not be subject to adjustment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) **<u>Other Distributions.</u>** In the event the Corporation shall declare a distribution payable in securities of other persons, evidences of indebtedness issued by the Corporation or other persons, assets (excluding cash dividends) or options or rights not referred to herein, then, in each such case for the purpose of this Section 4(e), the holders of Series C Preferred Stock shall be entitled to a proportionate share of any such distribution as though they were the holders of the number of shares of Common Stock of the corporation into which their shares of Series C Preferred Stock are convertible as of the record date fixed for the determination of the holders of Common Stock of the corporation entitled to receive such distribution.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t) **<u>Recapitalizations</u>.** If at any time or from time to time there shall be a recapitalization of the Common Stock (other than a subdivision, combination or merger

or sale of assets transaction provided for elsewhere in this Section 4 or Section 2) provision shall be made so that the holders of the Series C Preferred Stock shall thereafter be entitled to receive upon conversion of the Series C Preferred Stock the number of shares of stock or other securities or property of the Company or otherwise, to which a holder of Common Stock deliverable upon conversion would have been entitled on such recapitalization. In any such case, appropriate adjustment shall be made in the application of the provisions of this Section 4 with respect to the rights of the holders of the Series C Preferred Stock after the recapitalization to the end that the provisions of this Section 4 shall be applicable after that event and be as nearly equivalent as practicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) **<u>No Impairment.</u>** The Corporation will not, by amendment of its Articles of Incorporation or through any reorganization, recapitalization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Corporation, but will at all times in good faith assist in the carrying out of all the provisions of this Section 4 and in the taking of all such action as may be necessary or appropriate in order to protect the Conversion Rights of the holders of the Series C Preferred Stock against impairment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) **<u>No Fractional Shares and Certificate as to</u>** **<u>Adjustments.</u>** No fractional shares shall be issued upon the conversion of any share or shares of the Series C Preferred Stock, and the number of shares of Common Stock to be issued shall be rounded to the nearest whole share. Whether or not fractional shares are issuable upon such conversion shall be determined on the basis of the total number of shares of Series C Preferred Stock the holder is at the time converting into Common Stock and the number of shares of Common Stock issuable upon such aggregate conversion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) **<u>Notices of</u>**  **<u>Record Date.</u>** In the event of any taking by the Corporation of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend (other than a cash dividend) or other distribution, any right to subscribe for, purchase or otherwise acquire any shares of stock of any class or any other securities or property, or to receive any other right, the Corporation shall mail to each holder of Series C Preferred Stock, at least 20 days prior to the date specified therein, a notice specifying the date on which any such record is to be taken for the purpose of such dividend, distribution or right, and the amount and character of such dividend, distribution or right.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) **<u>Reservation</u>** **<u>of Stock Issuable</u> <u>Upon Conversion.</u>** 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 Series C Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series C 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 Series C Preferred Stock , in addition to such other remedies as shall be available to the holder of such Series C 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 purposes, including, without limitation, engaging in best efforts to obtain the requisite stockholder approval of any necessary amendment to this Certificate of Incorporation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) **<u>Notices.</u>** Any notice required by the provisions of this Section 4 to be given to the holders of shares of Series C Preferred Stock shall be deemed given if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his address appearing on the books of the Corporation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. **<u>Voting Rights.</u>** The holder of each share of Series C Preferred Stock shall have the right to twenty-five (25) votes for each share of Series C Preferred Stock, and with respect to each vote of such votes, such holder shall have full voting rights and powers equal to the voting rights and powers of the holders of Common Stock, and shall be entitled to notice of any stockholders' meeting in accordance with the bylaws of the Corporation, and shall be entitled to vote, together with holders of Common Stock, with respect to any question upon which holders of Common Stock have the right to vote. Fractional votes shall not, however, be permitted and any fractional voting rights shall be rounded to the nearest whole number (with one-half being rounded upward).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. **<u>Protective Provisions.</u>** Subject to the rights of a series of Preferred Stock which may from time to time come into existence, so long as at least an aggregate of 2,000,000 shares of Series C Preferred Stock are outstanding, the Corporation shall not without first obtaining the approval (by vote or written consent, as provided by law) of the holders of at least a majority of the then outstanding shares of Series C Preferred Stock:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) amend or repeal any provision of the Company's Articles of Incorporation or bylaws if such action would materially and adversely change the rights, preferences or privileges of the Series C Preferred Stock;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) increase or decrease (other than by redemption or conversion) the total number of authorized shares of Series C Preferred Stock; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) redeem shares of Common Stock (other than shares repurchased upon termination of an officer, employee or director pursuant to a restricted stock purchase agreement).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. **<u>Status of Converted Stock.</u>** In the event any shares of Series C Preferred Stock shall be converted pursuant to Section 4 hereof, the shares so converted shall be canceled and shall not be re-issuable by the corporation.

IN WITNESS WHEREOF, the undersigned has duly signed this Designation as of this_ day of December, 2018.

---

| | |
|:---|:---|
| **BEESTON** **ENTERPRISES LTD.** | **BEESTON** **ENTERPRISES LTD.** |
| By: | /s/ David Lazar |
| Name: | David Lazar |
| Title: | President |

---

## Exhibit 3.5

**FRANCISCO V. AGUILAR**

**Secretary of State**

**202 North Carson Street**

**Carson City, Nevada 89701-4201**

**(775) 684-5708**

**Website: www.nvsos.gov**

Business Number

**C17151-1999** 

Filing Number

**20233253687**

Filed On

**06/08/2023 10:24:14 AM**

---

| |
|:---|
| **Certificate, Amendment or Withdrawal of Designation** |
| **NRS 78.1955, 78.1955(6)**  |
| ☐ **Certificate of Designation** |
| ☐ **Certificate of Amendment to Designation - Before Issuance of Class or Series** |
| ☒ **Certificate of Amendment to Designation - After Issuance of Class or Series** |
| ☐ **Certificate of Withdrawal of Certificate of Designation** |

---

**TYPE OR PRINT** · **USE DARK INK ONLY** · **DO NOT HIGHLIGHT**

---

| | | | |
|:---|:---|:---|:---|
| **1. Entity information:**<br> , | &nbsp;&nbsp;Name of entity: | &nbsp;&nbsp;Name of entity: | &nbsp;&nbsp;Name of entity: |
| **1. Entity information:**<br> , | **Favo Capital, Inc.**<br> I | **Favo Capital, Inc.**<br> I | **Favo Capital, Inc.**<br> I |
| **1. Entity information:**<br> , | &nbsp;&nbsp;Entity or Nevada Business Identification Number (NVID): **NV19991312642** | &nbsp;&nbsp;Entity or Nevada Business Identification Number (NVID): **NV19991312642** | &nbsp;&nbsp;Entity or Nevada Business Identification Number (NVID): **NV19991312642** |
| **2. Effective date and time:** | For Certificate of Designation or Date: Time:<br>Amendment to Designation Only <br>(Optional): (must not be later than 90 days after the certificate is filed) | For Certificate of Designation or Date: Time:<br>Amendment to Designation Only <br>(Optional): (must not be later than 90 days after the certificate is filed) | For Certificate of Designation or Date: Time:<br>Amendment to Designation Only <br>(Optional): (must not be later than 90 days after the certificate is filed) |
| **3. Class or series of**<br> **stock:** (Certificate of Designation only) | &nbsp;&nbsp;The class or series of stock being designated within this filing:<br> **Series C Preferred Stock**  | &nbsp;&nbsp;The class or series of stock being designated within this filing:<br> **Series C Preferred Stock**  | &nbsp;&nbsp;The class or series of stock being designated within this filing:<br> **Series C Preferred Stock**  |
| **4. Information for amendment of class or series of stock:** | &nbsp;&nbsp;The original class or series of stock being amended within this filing: | &nbsp;&nbsp;The original class or series of stock being amended within this filing: | &nbsp;&nbsp;The original class or series of stock being amended within this filing: |
| **5. Amendment of class or series of stock:** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;☐ Certificate of Amendment to Designation- Before Issuance of Class or Series<br> As of the date of this certificate no shares of the class or series of stock have been issued. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;☐ Certificate of Amendment to Designation- Before Issuance of Class or Series<br> As of the date of this certificate no shares of the class or series of stock have been issued. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;☐ Certificate of Amendment to Designation- Before Issuance of Class or Series<br> As of the date of this certificate no shares of the class or series of stock have been issued. |
| **5. Amendment of class or series of stock:** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;☒ Certificate of Amendment to Designation- After Issuance of Class or Series<br> The amendment has been approved by the vote of stockholders holding shares in the corporation entitling them to exercise a majority of the voting power, or such greater proportion of the voting power as may be required by the articles of incorporation or the certificate of designation. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;☒ Certificate of Amendment to Designation- After Issuance of Class or Series<br> The amendment has been approved by the vote of stockholders holding shares in the corporation entitling them to exercise a majority of the voting power, or such greater proportion of the voting power as may be required by the articles of incorporation or the certificate of designation. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;☒ Certificate of Amendment to Designation- After Issuance of Class or Series<br> The amendment has been approved by the vote of stockholders holding shares in the corporation entitling them to exercise a majority of the voting power, or such greater proportion of the voting power as may be required by the articles of incorporation or the certificate of designation. |
| **6. Resolution:** Certificate of Designation and Amendment to Designation only) | &nbsp;&nbsp;&nbsp;&nbsp;By resolution of the board of directors pursuant to a provision in the articles of incorporation this certificate establishes OR amends the following regarding the voting powers, designations, preferences , limitations, restrictions and relative rights of the following class or series of stock.\* Series A Preferred Stock<br> SEE BELOW  | &nbsp;&nbsp;&nbsp;&nbsp;By resolution of the board of directors pursuant to a provision in the articles of incorporation this certificate establishes OR amends the following regarding the voting powers, designations, preferences , limitations, restrictions and relative rights of the following class or series of stock.\* Series A Preferred Stock<br> SEE BELOW  | &nbsp;&nbsp;&nbsp;&nbsp;By resolution of the board of directors pursuant to a provision in the articles of incorporation this certificate establishes OR amends the following regarding the voting powers, designations, preferences , limitations, restrictions and relative rights of the following class or series of stock.\* Series A Preferred Stock<br> SEE BELOW  |
| 7. **Withdrawal:** | <br> Designation being Withdrawn: Date of Designation: <br> No shares of the class or series of stock being withdrawn are outstanding.<br> The resolution of the board of directors authorizing the withdrawal of the certificate of designation establishing the class or series of stock: \* | <br> Designation being Withdrawn: Date of Designation: <br> No shares of the class or series of stock being withdrawn are outstanding.<br> The resolution of the board of directors authorizing the withdrawal of the certificate of designation establishing the class or series of stock: \* | <br> Designation being Withdrawn: Date of Designation: <br> No shares of the class or series of stock being withdrawn are outstanding.<br> The resolution of the board of directors authorizing the withdrawal of the certificate of designation establishing the class or series of stock: \* |
| **8. Signature:** (Required) | **x** **/s/ Vincent Napolitano**<br>| &nbsp;&nbsp;<br> Date: | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br> 06/08/2023 |
| **8. Signature:** (Required) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Signature of Officer | &nbsp;&nbsp;<br> Date: | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br> 06/08/2023 |
| **8. Signature:** (Required) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Signature of Officer | &nbsp;&nbsp;<br> Date: |  |

---

This form must be accompanied by appropriate fees.

Page 1 of 1

Revised: 1/1/2019

**FIRST AMENDED AND RESTATED CERTIFICATE OF DESIGNATION OF**

**FAVO CAPITAL, INC.**

**Pursuant to Section 78.1955 of the Nevada Revised Statutes**

**SERIES C PREFERRED STOCK**

On behalf of **FAVO CAPITAL, INC**., a Nevada corporation (the "<u>Corporation</u>"), the undersigned hereby certifies that the following resolution has been duly adopted by the board of directors of the Corporation (the "<u>Board</u>"):

RESOLVED, that, pursuant to the authority granted to and vested in the Board by the provisions of the articles of incorporation of the Corporation (the "<u>Articles of Incorporation</u>"), there has been created, out of the Fifty Million (50,000,000) shares of preferred stock, par value $0.0001 per share, of the Corporation authorized by the Corporation's Articles of Incorporation ("<u>Preferred Stock</u>"), Series C Preferred Stock, consisting of Twenty-five Million (25,000,000) shares, which series shall have the following powers, designations, preferences and relative participating, optional and other special rights, and the following qualifications, limitations and restrictions:

The specific powers, preferences, rights and limitations of the Series C Preferred Stock are as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. **<u>Dividend Provisions</u>.** Subject to the rights of any existing series of Preferred Stock or to the rights of any series of Preferred Stock which may from time to time hereafter come into existence, the holders of shares of Series C Preferred Stock shall be entitled to receive dividends, out of any assets legally available therefor, upon any payment of any dividend (payable other than in Common Stock or other securities and rights convertible into or entitling the holder thereof to receive, directly or indirectly, additional shares of Common Stock of the Corporation) on the Common Stock of the Corporation, as and if declared by the Board of Directors, as if the Series C Preferred Stock had been converted into Common Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.  **<u>Liquidation Preference.</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) In the event of any liquidation, dissolution or winding up of the Corporation, either voluntary or involuntary, subject to the rights of any existing series of Preferred Stock or to the rights of any series of Preferred Stock which may from time to time hereafter come into existence, the holders of the Series C 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 Common Stock by reason of their ownership thereof, an amount per share equal to the price per share actually paid to the Corporation upon the initial issuance of the Series C Preferred Stock (each, the "the Original Issue Price") for each share of Series C Preferred Stock then held by them, plus declared but unpaid dividends. Unless the Corporation can establish a different

Original Issue Price in connection with a particular sale of Series C Preferred Stock, the Original issue price shall be $0.001 per share for the Series C Preferred Stock. If, upon the occurrence of any liquidation, dissolution or winding up of the Corporation, the assets and funds thus distributed among the holders of the Series C Preferred Stock shall be insufficient to permit the payment to such holders of the full aforesaid preferential amounts, then, subject to the rights of the Series A Preferred Stock and the rights of any series of Preferred Stock which may from time to time hereafter come into existence, the entire assets and funds of the corporation legally available for distribution shall be distributed ratably among the holders of the each series of Preferred Stock in proportion to the preferential amount each such holder is otherwise entitled to receive.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Upon the completion of the distribution required by Section 2(a) above and any other distribution that may be required with respect to the rights of the Series A Preferred Stock or to the rights of any series of Preferred Stock which may from time to time hereafter come into existence, if assets remain in the Corporation, the remaining assets shall be distributed to the holders of the Common Stock until such time as the holders of the Common stock shall have received a return of the capital originally contributed thereby. Thereafter, if assets remain in the Corporation, all remaining assets shall be distributed to all holders of Common Stock and to each series of Preferred Stock, *pro rata* based on the number of shares of Common Stock held by each (assuming conversion of all such Preferred Stock into Common Stock).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) For purposes of this Section 2, 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 (including, without limitation, any reorganization, merger or consolidation, but excluding any merger effected exclusively for the purpose of changing the domicile of the Corporation); or (ii) a sale of all or substantially all of the assets of the Corporation, <u>unless</u> the Corporation's stockholders of record as constituted immediately prior to such acquisition or sale will, immediately after such acquisition or sale (by virtue of securities issued as consideration for the Corporation's acquisition or sale or otherwise) hold at least fifty percent (50%) of the voting power of the surviving or acquiring entity in approximately the same relative percentages after such acquisition or sale as before such acquisition or sale.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) In any of the events specified in (c) above, if the consideration received by the corporation is other than cash, its value will be deemed its fair market value. Any securities shall be valued as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Securities not subject to investment letter or other similar restrictions on free marketability:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) If traded on a securities exchange, the value shall be deemed to be the average of the closing prices of the securities on such exchange over the thirty-day period ending three (3) days prior to the closing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) If actively traded over-the-counter, the value shall be deemed to be the average of the closing bid or sale prices (whichever is applicable) over the thirty-day period ending three (3) days prior to the closing; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) If there is no active public market, the value shall be the fair market value thereof, as determined in good faith by the Board of Directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) The method of valuation of securities subject to investment letter or other restrictions on free marketability (other than restrictions arising solely by virtue of a stockholder's status as an affiliate or former affiliate) shall be to make an appropriate discount from the market value determined as above in (i) (A), (B) or (C) to reflect the approximate fair market value thereof, as mutually determined by the Corporation and the holders of at least a majority of the voting power of all then outstanding shares of Preferred Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) In the event the requirements of Section 2(c) are not complied with, the Corporation shall forthwith either:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) cause such closing to be postponed until such time as the requirements of this Section 2 have been complied with; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) cancel such transaction, in which event the rights, preferences and privileges of the holders of the Series C Preferred Stock shall revert to and be the same as such rights, preferences and privileges existing immediately prior to the date of the first notice referred to in Section 2(c)(iv) hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) The Corporation shall give each holder of record of Series C Preferred Stock written notice of such impending transaction not later than twenty (20) days prior to the stockholders' meeting called to approve such transaction, or twenty (20) days prior to the closing of such transaction, whichever is earlier, and shall also notify such holders in writing of the final approval of such transaction. The first of such notices shall describe the material terms and conditions of the impending transaction and the provisions of this Section 2, and the corporation shall thereafter give such holders prompt notice of any material changes. The transaction shall in no event take place sooner than twenty (20) days after the corporation has given the first notice provided for herein or sooner than ten (10) days after the corporation has given notice of any material changes provided for herein; provided, however, that time periods set forth in this paragraph may be shortened upon the written consent of the holders of Series C Preferred Stock that are entitled to such notice rights or similar notice rights and that represent at least a majority of the voting power of all then outstanding shares of such Series C Preferred Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. **<u>Redemption</u>**. The Series C Preferred Stock shares are non- redeemable other than upon the mutual agreement of the Company and the holder of shares to be redeemed, and even in such case only to the extent permitted by this Certificate of Designation, the Corporation's Articles of Incorporation and applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. **<u>Conversion</u>.** The holders of the Series C Preferred Stock, shall have conversion rights as follows (the "<u>Conversion Rights</u>"):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) **<u>Right to Convert</u>.** Subject to Section 4(c), each share of Series C Preferred Stock shall be convertible, at the option of the holder thereof, at any time after June 30, 2023, at the office of the Corporation or any transfer agent for such stock, into one (1) fully paid and nonassessable share of Common Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) **<u>Automatic Conversion</u>.** Each share of Series C Preferred Stock shall automatically be converted into one (1) share of Common Stock upon the earlier of (i) except as provided below in Section 4(c), the Corporation's sale of its Common Stock in a public offering pursuant to a

registration statement under the Securities Act of 1933, as amended; (ii) a liquidation, dissolution or winding up of the Corporation as defined in section 2(c) above but subject to any liquidation preference required by section 2(a) above; or (iii) the date specified by written consent or agreement of the holders of a majority of the then outstanding shares of Series C Preferred Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) **<u>Mechanics of Conversion</u>.** Before any holder of Series C Preferred Stock shall be entitled to convert the same into shares of Common Stock, such holder shall surrender the certificate or certificates therefor, duly endorsed, at the office of the Corporation or of any transfer agent for the Series C Preferred Stock, and shall give written notice to the Corporation at its principal corporate office, of the election to convert the same and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder of Series C Preferred Stock, or to the nominee or nominees of such holder, a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled as aforesaid. 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 Series C 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 as of such date. If the conversion is in connection with an underwritten offering of securities registered pursuant to the Securities Act of 1933, the conversion may, at the option of any holder tendering Series C Preferred Stock for conversion, be conditioned upon the closing with the underwriters of the sale of securities pursuant to such offering, in which event the person(s) entitled to receive Common Stock upon conversion of such Series C Preferred Stock shall not be deemed to have converted such Series C Preferred Stock until immediately prior to the closing of such sale of securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) **<u>Fixed Conversion Ratio</u>.** The conversion ratio of the Series C Preferred Stock set forth in section 2(a) or section 2(b), above, shall not be subject to adjustment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) **<u>Other Distributions</u>.** In the event the Corporation shall declare a distribution payable in securities of other persons, evidences of indebtedness issued by the Corporation or other persons, assets (excluding cash dividends) or options or rights not referred to herein, then, in each such case for the purpose of this Section 4(e), the holders of Series C Preferred Stock shall be entitled to a proportionate share of any such distribution as though they were the holders of the number of shares of Common Stock of the corporation into which their shares of Series C Preferred Stock are convertible as of the record date fixed for the determination of the holders of Common Stock of the corporation entitled to receive such distribution.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) **<u>Recapitalizations</u>.** If at any time or from time to time there shall be a recapitalization of the Common Stock (other than a subdivision, combination or merger

or sale of assets transaction provided for elsewhere in this Section 4 or Section 2) provision shall be made so that the holders of the Series C Preferred Stock shall thereafter be entitled to receive upon conversion of the Series C Preferred Stock the number of shares of stock or other securities or property of the Company or otherwise, to which a holder of Common Stock deliverable upon conversion would have been entitled on such recapitalization. In any such case, appropriate adjustment shall be made in the application of the provisions of this Section 4 with respect to the rights of the holders of the Series C Preferred Stock after the recapitalization to the end that the provisions of this Section 4 shall be applicable after that event and be as nearly equivalent as practicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) **<u>No Impairment</u>.** The Corporation will not, by amendment of its Articles of Incorporation or through any reorganization, recapitalization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Corporation, but will at all times in good faith assist in the carrying out of all the provisions of this Section 4 and in the taking of all such action as may be necessary or appropriate in order to protect the Conversion Rights of the holders of the Series C Preferred Stock against impairment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) **<u>No Fractional Shares and Certificate as to Adjustments</u>.** No fractional shares shall be issued upon the conversion of any share or shares of the Series C Preferred Stock, and the number of shares of Common Stock to be issued shall be rounded to the nearest whole share. Whether or not fractional shares are issuable upon such conversion shall be determined on the basis of the total number of shares of Series C Preferred Stock the holder is at the time converting into Common Stock and the number of shares of Common Stock issuable upon such aggregate conversion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) **<u>Notices of Record Date</u>.** In the event of any taking by the Corporation of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend (other than a cash dividend) or other distribution, any right to subscribe for, purchase or otherwise acquire any shares of stock of any class or any other securities or property, or to receive any other right, the Corporation shall mail to each holder of Series C Preferred Stock, at least 20 days prior to the date specified therein, a notice specifying the date on which any such record is to be taken for the purpose of such dividend, distribution or right, and the amount and character of such dividend, distribution or right.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) **<u>Reservation of Stock Issuable Upon Conversion</u>.** 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 Series C Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series C 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 Series C Preferred Stock , in addition to such other remedies as shall be available to the holder of such Series C 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 purposes, including, without limitation, engaging in best efforts to obtain the requisite stockholder approval of any necessary amendment to this Certificate of Incorporation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) **<u>Notices</u>.** Any notice required by the provisions of this Section 4 to be given to the holders of shares of Series C Preferred Stock shall be deemed given if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his address appearing on the books of the Corporation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. **<u>Voting Rights</u>.** The holder of each share of Series C Preferred Stock shall have the right to twenty-five (25) votes for each share of Series C Preferred Stock, and with respect to each vote of such votes, such holder shall have full voting rights and powers equal to the voting rights and powers of the holders of Common Stock, and shall be entitled to notice of any stockholders' meeting in accordance with the bylaws of the Corporation, and shall be entitled to vote, together with holders of Common Stock, with respect to any question upon which holders of Common Stock have the right to vote. Fractional votes shall not, however, be permitted and any fractional voting rights shall be rounded to the nearest whole number (with one-half being rounded upward).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. **<u>Protective Provisions</u>.** Subject to the rights of a series of Preferred Stock which may from time to time come into existence, so long as at least an aggregate of 2,000,000 shares of Series C Preferred Stock are outstanding, the Corporation shall not without first obtaining the approval (by vote or written consent, as provided by law) of the holders of at least a majority of the then outstanding shares of Series C Preferred Stock:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) amend or repeal any provision of the Company's Articles of Incorporation or bylaws if such action would materially and adversely change the rights, preferences or privileges of the Series C Preferred Stock;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) increase or decrease (other than by redemption or conversion) the total number of authorized shares of Series C Preferred Stock; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) redeem shares of Common Stock (other than shares repurchased upon termination of an officer, employee or director pursuant to a restricted stock purchase agreement).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. **<u>Status of Converted Stock</u>.** In the event any shares of Series C Preferred Stock shall be converted pursuant to Section 4 hereof, the shares so converted shall be canceled and shall not be re-issuable by the corporation.

IN WITNESS WHEREOF, the undersigned has duly signed this Designation as of this 5<sup>th</sup> day of June, 2023.

---

| | |
|:---|:---|
| **FAVO CAPITAL, INC.** | **FAVO CAPITAL, INC.** |
| By: | /s/ Vincent Napolitano |
| Name: | Vincent Napolitano |
| Title: | Chief Executive Officer |

---

## Exhibit 3.6

**FRANCISCO V. AGUILAR**

**Secretary of State**

**202 North Carson Street**

**Carson City, Nevada 89701-4201**

**(775) 684-5708**

**Website: www.nvsos.gov**

Business Number

**C17151-1999** 

Filing Number

**20233661115**

Filed On

**11/29/2023 14:21:28 PM**

---

| |
|:---|
| **Certificate, Amendment or Withdrawal of Designation** |
| **NRS 78.1955, 78.1955(6)**  |
| ☐ **Certificate of Designation** |
| ☐ **Certificate of Amendment to Designation - Before Issuance of Class or Series** |
| ☒ **Certificate of Amendment to Designation - After Issuance of Class or Series** |
| ☐ **Certificate of Withdrawal of Certificate of Designation** |

---

**TYPE OR PRINT** · **USE DARK INK ONLY** · **DO NOT HIGHLIGHT**

---

| | | | |
|:---|:---|:---|:---|
| **1. Entity information:**<br> , | &nbsp;&nbsp;Name of entity: | &nbsp;&nbsp;Name of entity: | &nbsp;&nbsp;Name of entity: |
| **1. Entity information:**<br> , | **Favo Capital, Inc.**<br> I | **Favo Capital, Inc.**<br> I | **Favo Capital, Inc.**<br> I |
| **1. Entity information:**<br> , | &nbsp;&nbsp;Entity or Nevada Business Identification Number (NVID): **NV19991312642** | &nbsp;&nbsp;Entity or Nevada Business Identification Number (NVID): **NV19991312642** | &nbsp;&nbsp;Entity or Nevada Business Identification Number (NVID): **NV19991312642** |
| **2. Effective date and time:** | For Certificate of Designation or Date: Time: **11/29/2023**<br>Amendment to Designation Only <br>(Optional): (must not be later than 90 days after the certificate is filed) | For Certificate of Designation or Date: Time: **11/29/2023**<br>Amendment to Designation Only <br>(Optional): (must not be later than 90 days after the certificate is filed) | For Certificate of Designation or Date: Time: **11/29/2023**<br>Amendment to Designation Only <br>(Optional): (must not be later than 90 days after the certificate is filed) |
| **3. Class or series of**<br> **stock:** (Certificate of Designation only) | &nbsp;&nbsp;The class or series of stock being designated within this filing:<br> **Series C Preferred Stock**  | &nbsp;&nbsp;The class or series of stock being designated within this filing:<br> **Series C Preferred Stock**  | &nbsp;&nbsp;The class or series of stock being designated within this filing:<br> **Series C Preferred Stock**  |
| **4. Information for amendment of class or series of stock:** | &nbsp;&nbsp;The original class or series of stock being amended within this filing: | &nbsp;&nbsp;The original class or series of stock being amended within this filing: | &nbsp;&nbsp;The original class or series of stock being amended within this filing: |
| **5. Amendment of class or series of stock:** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;☐ Certificate of Amendment to Designation- Before Issuance of Class or Series<br> As of the date of this certificate no shares of the class or series of stock have been issued. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;☐ Certificate of Amendment to Designation- Before Issuance of Class or Series<br> As of the date of this certificate no shares of the class or series of stock have been issued. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;☐ Certificate of Amendment to Designation- Before Issuance of Class or Series<br> As of the date of this certificate no shares of the class or series of stock have been issued. |
| **5. Amendment of class or series of stock:** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;☒ Certificate of Amendment to Designation- After Issuance of Class or Series<br> The amendment has been approved by the vote of stockholders holding shares in the corporation entitling them to exercise a majority of the voting power, or such greater proportion of the voting power as may be required by the articles of incorporation or the certificate of designation. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;☒ Certificate of Amendment to Designation- After Issuance of Class or Series<br> The amendment has been approved by the vote of stockholders holding shares in the corporation entitling them to exercise a majority of the voting power, or such greater proportion of the voting power as may be required by the articles of incorporation or the certificate of designation. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;☒ Certificate of Amendment to Designation- After Issuance of Class or Series<br> The amendment has been approved by the vote of stockholders holding shares in the corporation entitling them to exercise a majority of the voting power, or such greater proportion of the voting power as may be required by the articles of incorporation or the certificate of designation. |
| **6. Resolution:** Certificate of Designation and Amendment to Designation only) | &nbsp;&nbsp;&nbsp;&nbsp;By resolution of the board of directors pursuant to a provision in the articles of incorporation this certificate establishes OR amends the following regarding the voting powers, designations, preferences , limitations, restrictions and relative rights of the following class or series of stock.\* Series A Preferred Stock<br> SEE BELOW  | &nbsp;&nbsp;&nbsp;&nbsp;By resolution of the board of directors pursuant to a provision in the articles of incorporation this certificate establishes OR amends the following regarding the voting powers, designations, preferences , limitations, restrictions and relative rights of the following class or series of stock.\* Series A Preferred Stock<br> SEE BELOW  | &nbsp;&nbsp;&nbsp;&nbsp;By resolution of the board of directors pursuant to a provision in the articles of incorporation this certificate establishes OR amends the following regarding the voting powers, designations, preferences , limitations, restrictions and relative rights of the following class or series of stock.\* Series A Preferred Stock<br> SEE BELOW  |
| 7. **Withdrawal:** | <br> Designation being Withdrawn: Date of Designation: <br> No shares of the class or series of stock being withdrawn are outstanding.<br> The resolution of the board of directors authorizing the withdrawal of the certificate of designation establishing the class or series of stock: \* | <br> Designation being Withdrawn: Date of Designation: <br> No shares of the class or series of stock being withdrawn are outstanding.<br> The resolution of the board of directors authorizing the withdrawal of the certificate of designation establishing the class or series of stock: \* | <br> Designation being Withdrawn: Date of Designation: <br> No shares of the class or series of stock being withdrawn are outstanding.<br> The resolution of the board of directors authorizing the withdrawal of the certificate of designation establishing the class or series of stock: \* |
| **8. Signature:** (Required) | **x** **/s/ Vincent Napolitano**<br>| &nbsp;&nbsp;<br> Date: | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br> 11/29/2023 |
| **8. Signature:** (Required) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Signature of Officer | &nbsp;&nbsp;<br> Date: | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br> 11/29/2023 |
| **8. Signature:** (Required) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Signature of Officer | &nbsp;&nbsp;<br> Date: |  |

---

This form must be accompanied by appropriate fees.

Page 1 of 1

Revised: 1/1/2019

**AMENDED TO CERTIFICATE OF**

**DESIGNATION OF**

**FAVO CAPITAL, INC.**

**Pursuant to Section 78.1955 of the**

**Nevada Revised Statutes**

**SERIES C PREFERRED STOCK**

On behalf of **FAVO CAPITAL, INC**., a Nevada corporation (the "Corporation"), the undersigned hereby certifies that the following resolution has been duly adopted by the board of directors of the Corporation (the "Board") and the holders of a majority of shares of Series C Preferred Stock in the Corporation:

RESOLVED, that, pursuant to the authority granted to and vested in the Board by the provisions of the articles of incorporation of the Corporation and by the consent of the holders of a majority of shares of Series C Preferred Stock, the number of authorized shares of the Corporation's preferred stock, $0.0001 par value per share, designated as "Series C Preferred Stock" (the "Series C Preferred Stock") pursuant to that certain Certificate of Designation filed by the Corporation with the Nevada Secretary of State on June 8, 2023 (the "Certificate of Designation") is hereby decreased from 25,000,000 shares to 18,750,000 shares; and

FURTHER RESOLVED, that, the voting and other powers, preferences and relative, participating, optional or other rights, and the qualifications, limitations and restrictions thereof, of the shares of Series C Preferred Stock set forth in the Certificate of Designation shall remain as set forth in the Certificate of Designation, subject only to the decrease in the authorized number of shares of Series C Preferred Stock as set forth above.

IN WITNESS WHEREOF, the undersigned has duly signed this Amendment to the Certificate of Designation as of this 22<sup>nd</sup> day of November, 2023.

---

| | |
|:---|:---|
| **FAVO CAPITAL, INC.** | **FAVO CAPITAL, INC.** |
| By: | /s/ Vincent Napolitano |
| Name: | Vincent Napolitano |
| Title: | CEO |

---

## Exhibit 3.7

**FRANCISCO V. AGUILAR**

**Secretary of State**

**202 North Carson Street**

**Carson City, Nevada 89701-4201**

**(775) 684-5708**

**Website: www.nvsos.gov**

Business Number

**C17151-1999** 

Filing Number

**20233661156**

Filed On

**11/29/2023 14:25:15 PM**

---

| |
|:---|
| **Certificate, Amendment or Withdrawal of Designation** |
| **NRS 78.1955, 78.1955(6)**  |
| ☐ **Certificate of Designation** |
| ☐ **Certificate of Amendment to Designation - Before Issuance of Class or Series** |
| ☒ **Certificate of Amendment to Designation - After Issuance of Class or Series** |
| ☐ **Certificate of Withdrawal of Certificate of Designation** |

---

**TYPE OR PRINT** · **USE DARK INK ONLY** · **DO NOT HIGHLIGHT**

---

| | | | |
|:---|:---|:---|:---|
| **1. Entity information:**<br> , | &nbsp;&nbsp;Name of entity: | &nbsp;&nbsp;Name of entity: | &nbsp;&nbsp;Name of entity: |
| **1. Entity information:**<br> , | **Favo Capital, Inc.**<br> I | **Favo Capital, Inc.**<br> I | **Favo Capital, Inc.**<br> I |
| **1. Entity information:**<br> , | &nbsp;&nbsp;Entity or Nevada Business Identification Number (NVID): **NV19991312642** | &nbsp;&nbsp;Entity or Nevada Business Identification Number (NVID): **NV19991312642** | &nbsp;&nbsp;Entity or Nevada Business Identification Number (NVID): **NV19991312642** |
| **2. Effective date and time:** | For Certificate of Designation or Date: Time: **11/29/2023**<br>Amendment to Designation Only <br>(Optional): (must not be later than 90 days after the certificate is filed) | For Certificate of Designation or Date: Time: **11/29/2023**<br>Amendment to Designation Only <br>(Optional): (must not be later than 90 days after the certificate is filed) | For Certificate of Designation or Date: Time: **11/29/2023**<br>Amendment to Designation Only <br>(Optional): (must not be later than 90 days after the certificate is filed) |
| **3. Class or series of**<br> **stock:** (Certificate of Designation only) | &nbsp;&nbsp;The class or series of stock being designated within this filing:<br> **Series A Preferred Stock**  | &nbsp;&nbsp;The class or series of stock being designated within this filing:<br> **Series A Preferred Stock**  | &nbsp;&nbsp;The class or series of stock being designated within this filing:<br> **Series A Preferred Stock**  |
| **4. Information for amendment of class or series of stock:** | &nbsp;&nbsp;The original class or series of stock being amended within this filing: | &nbsp;&nbsp;The original class or series of stock being amended within this filing: | &nbsp;&nbsp;The original class or series of stock being amended within this filing: |
| **5. Amendment of class or series of stock:** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;☐ Certificate of Amendment to Designation- Before Issuance of Class or Series<br> As of the date of this certificate no shares of the class or series of stock have been issued. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;☐ Certificate of Amendment to Designation- Before Issuance of Class or Series<br> As of the date of this certificate no shares of the class or series of stock have been issued. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;☐ Certificate of Amendment to Designation- Before Issuance of Class or Series<br> As of the date of this certificate no shares of the class or series of stock have been issued. |
| **5. Amendment of class or series of stock:** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;☒ Certificate of Amendment to Designation- After Issuance of Class or Series<br> The amendment has been approved by the vote of stockholders holding shares in the corporation entitling them to exercise a majority of the voting power, or such greater proportion of the voting power as may be required by the articles of incorporation or the certificate of designation. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;☒ Certificate of Amendment to Designation- After Issuance of Class or Series<br> The amendment has been approved by the vote of stockholders holding shares in the corporation entitling them to exercise a majority of the voting power, or such greater proportion of the voting power as may be required by the articles of incorporation or the certificate of designation. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;☒ Certificate of Amendment to Designation- After Issuance of Class or Series<br> The amendment has been approved by the vote of stockholders holding shares in the corporation entitling them to exercise a majority of the voting power, or such greater proportion of the voting power as may be required by the articles of incorporation or the certificate of designation. |
| **6. Resolution:** Certificate of Designation and Amendment to Designation only) | &nbsp;&nbsp;&nbsp;&nbsp;By resolution of the board of directors pursuant to a provision in the articles of incorporation this certificate establishes OR amends the following regarding the voting powers, designations, preferences , limitations, restrictions and relative rights of the following class or series of stock.\* Series A Preferred Stock<br> SEE BELOW  | &nbsp;&nbsp;&nbsp;&nbsp;By resolution of the board of directors pursuant to a provision in the articles of incorporation this certificate establishes OR amends the following regarding the voting powers, designations, preferences , limitations, restrictions and relative rights of the following class or series of stock.\* Series A Preferred Stock<br> SEE BELOW  | &nbsp;&nbsp;&nbsp;&nbsp;By resolution of the board of directors pursuant to a provision in the articles of incorporation this certificate establishes OR amends the following regarding the voting powers, designations, preferences , limitations, restrictions and relative rights of the following class or series of stock.\* Series A Preferred Stock<br> SEE BELOW  |
| 7. **Withdrawal:** | <br> Designation being Withdrawn: Date of Designation: <br> No shares of the class or series of stock being withdrawn are outstanding.<br> The resolution of the board of directors authorizing the withdrawal of the certificate of designation establishing the class or series of stock: \* | <br> Designation being Withdrawn: Date of Designation: <br> No shares of the class or series of stock being withdrawn are outstanding.<br> The resolution of the board of directors authorizing the withdrawal of the certificate of designation establishing the class or series of stock: \* | <br> Designation being Withdrawn: Date of Designation: <br> No shares of the class or series of stock being withdrawn are outstanding.<br> The resolution of the board of directors authorizing the withdrawal of the certificate of designation establishing the class or series of stock: \* |
| **8. Signature:** (Required) | **x** **/s/ Vincent Napolitano**<br>| &nbsp;&nbsp;<br> Date: | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br> 11/29/2023 |
| **8. Signature:** (Required) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Signature of Officer | &nbsp;&nbsp;<br> Date: | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br> 11/29/2023 |
| **8. Signature:** (Required) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Signature of Officer | &nbsp;&nbsp;<br> Date: |  |

---

This form must be accompanied by appropriate fees.

Page 1 of 1

Revised: 1/1/2019

**AMENDED TO CERTIFICATE OF**

**DESIGNATION OF**

**FAVO CAPITAL, INC.**

**Pursuant to Section 78.1955 of the Nevada Revised Statutes**

**SERIES A PREFERRED STOCK**

On behalf of **FAVO CAPITAL, INC**., a Nevada corporation (the "Corporation"), the undersigned hereby certifies that the following resolution has been duly adopted by the board of directors of the Corporation (the "Board") and the holders of a majority of shares of Series A Preferred Stock in the Corporation:

RESOLVED, that, pursuant to the authority granted to and vested in the Board by the provisions of the articles of incorporation of the Corporation and by the consent of the holders of a majority of shares of Series A Preferred Stock, the number of authorized shares of the Corporation's preferred stock, $0.0001 par value per share, designated as "Series A Preferred Stock" (the "Series A Preferred Stock") pursuant to Section 1 of that certain Certificate of Designation filed by the Corporation with the Nevada Secretary of State on June 7, 2023 (the "Certificate of Designation") is hereby increased from 20,000,000 shares to 81,250,000 shares; and

FURTHER RESOLVED, that, the voting and other powers, preferences and relative, participating, optional or other rights, and the qualifications, limitations and restrictions thereof, of the shares of Series A Preferred Stock set forth in the Certificate of Designation shall remain as set forth in the Certificate of Designation, subject only to the increase in the authorized number of shares of Series A Preferred Stock as set forth above.

IN WITNESS WHEREOF, the undersigned has duly signed this Amendment to the Certificate of Designation as of this 22<sup>nd</sup> day of November, 2023.

---

| | |
|:---|:---|
| **FAVO CAPITAL, INC.** | **FAVO CAPITAL, INC.** |
| By: | /s/ Vincent Napolitano |
| Name: | Vincent Napolitano |
| Title: | CEO |

---

## Exhibit 3.8

**FRANCISCO V. AGUILAR**

**Secretary of State**

**202 North Carson Street**

**Carson City, Nevada 89701-4201**

**(775) 684-5708**

**Website: www.nvsos.gov**

Business Number

**C17151-1999** 

Filing Number

**20255159873**

Filed On

**09/08/2025 12:35:35 PM**

---

| |
|:---|
| **Certificate, Amendment or Withdrawal of Designation** |
| **NRS 78.1955, 78.1955(6)**  |
| ☐ **Certificate of Designation** |
| ☐ **Certificate of Amendment to Designation - Before Issuance of Class or Series** |
| ☐ **Certificate of Amendment to Designation - After Issuance of Class or Series** |
| ☒ **Certificate of Withdrawal of Certificate of Designation** |

---

**TYPE OR PRINT** · **USE DARK INK ONLY** · **DO NOT HIGHLIGHT**

---

| | | | |
|:---|:---|:---|:---|
| **1. Entity information:**<br> , | &nbsp;&nbsp;Name of entity: | &nbsp;&nbsp;Name of entity: | &nbsp;&nbsp;Name of entity: |
| **1. Entity information:**<br> , | **Favo Capital, Inc.**<br> I | **Favo Capital, Inc.**<br> I | **Favo Capital, Inc.**<br> I |
| **1. Entity information:**<br> , | &nbsp;&nbsp;Entity or Nevada Business Identification Number (NVID): **NV19991312642** | &nbsp;&nbsp;Entity or Nevada Business Identification Number (NVID): **NV19991312642** | &nbsp;&nbsp;Entity or Nevada Business Identification Number (NVID): **NV19991312642** |
| **2. Effective date and time:** | For Certificate of Designation or Date: Time: <br>Amendment to Designation Only <br>(Optional): (must not be later than 90 days after the certificate is filed) | For Certificate of Designation or Date: Time: <br>Amendment to Designation Only <br>(Optional): (must not be later than 90 days after the certificate is filed) | For Certificate of Designation or Date: Time: <br>Amendment to Designation Only <br>(Optional): (must not be later than 90 days after the certificate is filed) |
| **3. Class or series of**<br> **stock:** (Certificate of Designation only) | &nbsp;&nbsp;The class or series of stock being designated within this filing: | &nbsp;&nbsp;The class or series of stock being designated within this filing: | &nbsp;&nbsp;The class or series of stock being designated within this filing: |
| **4. Information for amendment of class or series of stock:** | &nbsp;&nbsp;The original class or series of stock being amended within this filing: | &nbsp;&nbsp;The original class or series of stock being amended within this filing: | &nbsp;&nbsp;The original class or series of stock being amended within this filing: |
| **5. Amendment of class or series of stock:** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;☐ Certificate of Amendment to Designation- Before Issuance of Class or Series<br> As of the date of this certificate no shares of the class or series of stock have been issued. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;☐ Certificate of Amendment to Designation- Before Issuance of Class or Series<br> As of the date of this certificate no shares of the class or series of stock have been issued. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;☐ Certificate of Amendment to Designation- Before Issuance of Class or Series<br> As of the date of this certificate no shares of the class or series of stock have been issued. |
| **5. Amendment of class or series of stock:** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;☒ Certificate of Amendment to Designation- After Issuance of Class or Series<br> The amendment has been approved by the vote of stockholders holding shares in the corporation entitling them to exercise a majority of the voting power, or such greater proportion of the voting power as may be required by the articles of incorporation or the certificate of designation. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;☒ Certificate of Amendment to Designation- After Issuance of Class or Series<br> The amendment has been approved by the vote of stockholders holding shares in the corporation entitling them to exercise a majority of the voting power, or such greater proportion of the voting power as may be required by the articles of incorporation or the certificate of designation. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;☒ Certificate of Amendment to Designation- After Issuance of Class or Series<br> The amendment has been approved by the vote of stockholders holding shares in the corporation entitling them to exercise a majority of the voting power, or such greater proportion of the voting power as may be required by the articles of incorporation or the certificate of designation. |
| **6. Resolution:** Certificate of Designation and Amendment to Designation only) | &nbsp;&nbsp;&nbsp;&nbsp;By resolution of the board of directors pursuant to a provision in the articles of incorporation this certificate establishes OR amends the following regarding the voting powers, designations, preferences , limitations, restrictions and relative rights of the following class or series of stock.\* Series A Preferred Stock<br> SEE BELOW  | &nbsp;&nbsp;&nbsp;&nbsp;By resolution of the board of directors pursuant to a provision in the articles of incorporation this certificate establishes OR amends the following regarding the voting powers, designations, preferences , limitations, restrictions and relative rights of the following class or series of stock.\* Series A Preferred Stock<br> SEE BELOW  | &nbsp;&nbsp;&nbsp;&nbsp;By resolution of the board of directors pursuant to a provision in the articles of incorporation this certificate establishes OR amends the following regarding the voting powers, designations, preferences , limitations, restrictions and relative rights of the following class or series of stock.\* Series A Preferred Stock<br> SEE BELOW  |
| 7. **Withdrawal:** | <br> Designation being Withdrawn: Series C Preferred Stock, as amended Date of Designation: 11/29/2023<br> No shares of the class or series of stock being withdrawn are outstanding.<br> The resolution of the board of directors authorizing the withdrawal of the certificate of designation establishing the class or series of stock: \*<br> The Board of Directors of the Corporation hereby withdraws....<br> SEE ATTACHED  | <br> Designation being Withdrawn: Series C Preferred Stock, as amended Date of Designation: 11/29/2023<br> No shares of the class or series of stock being withdrawn are outstanding.<br> The resolution of the board of directors authorizing the withdrawal of the certificate of designation establishing the class or series of stock: \*<br> The Board of Directors of the Corporation hereby withdraws....<br> SEE ATTACHED  | <br> Designation being Withdrawn: Series C Preferred Stock, as amended Date of Designation: 11/29/2023<br> No shares of the class or series of stock being withdrawn are outstanding.<br> The resolution of the board of directors authorizing the withdrawal of the certificate of designation establishing the class or series of stock: \*<br> The Board of Directors of the Corporation hereby withdraws....<br> SEE ATTACHED  |
| **8. Signature:** (Required) | **x** **/s/ Shaun Quin**<br>| &nbsp;&nbsp;<br> Date: | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br> 08/25/2025 |
| **8. Signature:** (Required) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Signature of Officer | &nbsp;&nbsp;<br> Date: | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br> 08/25/2025 |
| **8. Signature:** (Required) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Signature of Officer | &nbsp;&nbsp;<br> Date: |  |

---

This form must be accompanied by appropriate fees.

Page 1 of 1

Revised: 1/1/2019

The Board of Directors of the Corporation hereby withdraws the Certificate of Designation, as amended, for the Corporation's Series C Preferred Stock (filing number 20180523890-38)

## Exhibit 3.9

**FRANCISCO V. AGUILAR**

**Secretary of State**

**202 North Carson Street**

**Carson City, Nevada 89701-4201**

**(775) 684-5708**

**Website: www.nvsos.gov**

Business Number

**C17151-1999** 

Filing Number

**20255160463**

Filed On

**09/08/2025 15:03:25 PM**

---

| |
|:---|
| **Certificate, Amendment or Withdrawal of Designation** |
| **NRS 78.1955, 78.1955(6)**  |
| ☒ **Certificate of Designation** |
| ☐ **Certificate of Amendment to Designation - Before Issuance of Class or Series** |
| ☐ **Certificate of Amendment to Designation - After Issuance of Class or Series** |
| ☐ **Certificate of Withdrawal of Certificate of Designation** |

---

**TYPE OR PRINT** · **USE DARK INK ONLY** · **DO NOT HIGHLIGHT**

---

| | | | |
|:---|:---|:---|:---|
| **1. Entity information:**<br> , | &nbsp;&nbsp;Name of entity: | &nbsp;&nbsp;Name of entity: | &nbsp;&nbsp;Name of entity: |
| **1. Entity information:**<br> , | **Favo Capital, Inc.**<br> I | **Favo Capital, Inc.**<br> I | **Favo Capital, Inc.**<br> I |
| **1. Entity information:**<br> , | &nbsp;&nbsp;Entity or Nevada Business Identification Number (NVID): **NV19991312642** | &nbsp;&nbsp;Entity or Nevada Business Identification Number (NVID): **NV19991312642** | &nbsp;&nbsp;Entity or Nevada Business Identification Number (NVID): **NV19991312642** |
| **2. Effective date and time:** | For Certificate of Designation or Date: Time:<br>Amendment to Designation Only <br>(Optional): (must not be later than 90 days after the certificate is filed) | For Certificate of Designation or Date: Time:<br>Amendment to Designation Only <br>(Optional): (must not be later than 90 days after the certificate is filed) | For Certificate of Designation or Date: Time:<br>Amendment to Designation Only <br>(Optional): (must not be later than 90 days after the certificate is filed) |
| **3. Class or series of**<br> **stock:** (Certificate of Designation only) | &nbsp;&nbsp;The class or series of stock being designated within this filing:<br> **Series B Preferred Stock**  | &nbsp;&nbsp;The class or series of stock being designated within this filing:<br> **Series B Preferred Stock**  | &nbsp;&nbsp;The class or series of stock being designated within this filing:<br> **Series B Preferred Stock**  |
| **4. Information for amendment of class or series of stock:** | &nbsp;&nbsp;The original class or series of stock being amended within this filing: | &nbsp;&nbsp;The original class or series of stock being amended within this filing: | &nbsp;&nbsp;The original class or series of stock being amended within this filing: |
| **5. Amendment of class or series of stock:** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;☐ Certificate of Amendment to Designation- Before Issuance of Class or Series<br> As of the date of this certificate no shares of the class or series of stock have been issued. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;☐ Certificate of Amendment to Designation- Before Issuance of Class or Series<br> As of the date of this certificate no shares of the class or series of stock have been issued. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;☐ Certificate of Amendment to Designation- Before Issuance of Class or Series<br> As of the date of this certificate no shares of the class or series of stock have been issued. |
| **5. Amendment of class or series of stock:** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;☐ Certificate of Amendment to Designation- After Issuance of Class or Series<br> The amendment has been approved by the vote of stockholders holding shares in the corporation entitling them to exercise a majority of the voting power, or such greater proportion of the voting power as may be required by the articles of incorporation or the certificate of designation. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;☐ Certificate of Amendment to Designation- After Issuance of Class or Series<br> The amendment has been approved by the vote of stockholders holding shares in the corporation entitling them to exercise a majority of the voting power, or such greater proportion of the voting power as may be required by the articles of incorporation or the certificate of designation. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;☐ Certificate of Amendment to Designation- After Issuance of Class or Series<br> The amendment has been approved by the vote of stockholders holding shares in the corporation entitling them to exercise a majority of the voting power, or such greater proportion of the voting power as may be required by the articles of incorporation or the certificate of designation. |
| **6. Resolution:** Certificate of Designation and Amendment to Designation only) | &nbsp;&nbsp;&nbsp;&nbsp;By resolution of the board of directors pursuant to a provision in the articles of incorporation this certificate establishes OR amends the following regarding the voting powers, designations, preferences , limitations, restrictions and relative rights of the following class or series of stock.\* Series A Preferred Stock<br> SEE BELOW  | &nbsp;&nbsp;&nbsp;&nbsp;By resolution of the board of directors pursuant to a provision in the articles of incorporation this certificate establishes OR amends the following regarding the voting powers, designations, preferences , limitations, restrictions and relative rights of the following class or series of stock.\* Series A Preferred Stock<br> SEE BELOW  | &nbsp;&nbsp;&nbsp;&nbsp;By resolution of the board of directors pursuant to a provision in the articles of incorporation this certificate establishes OR amends the following regarding the voting powers, designations, preferences , limitations, restrictions and relative rights of the following class or series of stock.\* Series A Preferred Stock<br> SEE BELOW  |
| 7. **Withdrawal:** | <br> Designation being Withdrawn: Date of Designation: <br> No shares of the class or series of stock being withdrawn are outstanding.<br> The resolution of the board of directors authorizing the withdrawal of the certificate of designation establishing the class or series of stock: \* | <br> Designation being Withdrawn: Date of Designation: <br> No shares of the class or series of stock being withdrawn are outstanding.<br> The resolution of the board of directors authorizing the withdrawal of the certificate of designation establishing the class or series of stock: \* | <br> Designation being Withdrawn: Date of Designation: <br> No shares of the class or series of stock being withdrawn are outstanding.<br> The resolution of the board of directors authorizing the withdrawal of the certificate of designation establishing the class or series of stock: \* |
| **8. Signature:** (Required) | **x** **/s/ Shaun Quin**<br>| &nbsp;&nbsp;<br> Date: | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br> 09/04/2025 |
| **8. Signature:** (Required) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Signature of Officer | &nbsp;&nbsp;<br> Date: | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br> 09/04/2025 |
| **8. Signature:** (Required) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Signature of Officer | &nbsp;&nbsp;<br> Date: |  |

---

This form must be accompanied by appropriate fees.

Page 1 of 1

Revised: 1/1/2019

**CERTIFICATE OF DESIGNATIONS,** 

**PREFERENCES AND RIGHTS**

**of**

**SERIES B PREFERRED STOCK**

**of**

**FAVO CAPITAL, INC.**

On behalf of Favo Capital, Inc., a Delaware corporation (the "<u>Corporation</u>"), the undersigned hereby certifies that the following resolution has been duly adopted by the board of directors of the Corporation (the "<u>Board</u>"):

RESOLVED, that, pursuant to the authority granted to and vested in the Board by the provisions of the certificate of incorporation of the Corporation (the "<u>Certificate of Incorporation</u>"), there hereby is created, out of the one hundred million (100,000,000) shares of preferred stock, par value $0.0001 per share, of the Corporation ("<u>Preferred Stock</u>"), a series of Preferred Stock, known as, "<u>Series B Preferred Stock</u>," consisting of ten million (10,000,000) shares, which series shall have the following powers, designations, preferences and relative participating, optional and other special rights, and the following qualifications, limitations and restrictions.

The specific powers, preferences, rights and limitations of the Series B Preferred Stock are as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Designation; Number of Shares</u>. The designation of said series of Preferred Stock shall be Series B Preferred Stock, par value $0.001 per share (the "Series B Preferred Stock").The number of shares of Series B Preferred Stock authorized shall be ten million (10,000,000) shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Rights of Series B Preferred Stock</u>. The Series B Preferred Stock shall have no value in the event of the liquidation of the Corporation or any rights to distributions declared by the Corporation. After five years, the Series B Preferred Stock is convertible into shares of Common Stock of the Corporation on a 1 for 1 basis, and the Series B Preferred Stock have the voting rights as specified in Paragraph 3 below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. <u>Voting Rights</u>. The holders of Series B Preferred Stock shall be entitled to vote together with the holders of Common Stock and Series A Preferred Stock (and any other class or series that may be entitled to vote with the holders of Common Stock and Series A Preferred Stock) on all matters submitted to a vote of the stockholders of the Corporation. Each share of Series B Preferred Stock shall entitle the holder thereof to fifty (50) votes per share on all such matters. The voting rights of the Series B Preferred Stock shall not be subject to adjustment or reduction upon the conversion of shares of Series A Preferred Stock to Common Stock or any other event, unless otherwise determined by the Board, agreed to by the majority of Holders of Series B Preferred Stock, and reflected in an amendment to this Certificate. For clarity, the voting ratio of fifty (50) votes per share shall remain fixed and shall not change.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. <u>Optional Conversion of Series B Preferred Stock</u>. The Holders of Series B Preferred Stock shall have conversion rights as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Conversion Right</u>. Each share of Series B Preferred Stock shall be convertible at the option of the Holder thereof and without the payment of additional consideration by

the Holder thereof, after five years from issuance, into shares of Common Stock on the Optional Conversion Date (as hereinafter defined) at a conversion rate of one (1) share of Common Stock (the "Conversion Rate") for every one (1) share of Series B Preferred Stock, subject to adjustment as provided in this Section 4 of this Designation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Mechanics of Optional Conversion</u>. To effect the optional conversion of shares of Series B Preferred Stock in accordance with Section 4(a) of this Designation, any Holder of record shall make a written demand for such conversion (for purposes of this Designation, a "Conversion Demand") upon the Corporation at its principal executive offices setting forth therein (i) the certificate or certificates representing such shares, and (ii) the proposed date of such conversion, which shall be a business day not less than fifteen (15) nor more than thirty (30) days after the date of such Conversion Demand (for purposes of this Designation, the "Optional Conversion Date"). Within five days of receipt of the Conversion Demand, the Corporation shall give written notice (for purposes of this Designation, a "Conversion Notice") to the Holder setting forth therein (i) the address of the place or places at which the certificate or certificates representing any shares not yet tendered are to be converted are to be surrendered; and (ii) whether the certificate or certificates to be surrendered are required to be endorsed for transfer or accompanied by a duly executed stock power or other appropriate instrument of assignment and, if so, the form of such endorsement or power or other instrument of assignment. The Conversion Notice shall be sent by first class mail, postage prepaid, to such Holder at such Holder's address as may be set forth in the Conversion Demand or, if not set forth therein, as it appears on the records of the stock transfer agent for the Series B Preferred Stock, if any, or, if none, of the Corporation. On or before the Optional Conversion Date, each Holder of the Series B Preferred Stock so to be converted shall surrender the certificate or certificates representing such shares, duly endorsed for transfer or accompanied by a duly executed stock power or other instrument of assignment, if the Conversion Notice so provides, to the Corporation at any place set forth in such notice or, if no such place is so set forth, at the principal executive offices of the Corporation. As soon as practicable after the Optional Conversion Date and the surrender of the certificate or certificates representing such shares, the Corporation shall issue and deliver to such Holder, or its nominee, at such Holder's address as it appears on the records of the stock transfer agent for the Series B Preferred Stock, if any, or, if none, of the Corporation, a certificate or certificates for the number of whole shares of Common Stock issuable upon such conversion in accordance with the provisions hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>No Fractional Shares</u>. No fractional shares of Common Stock or scrip shall be issued upon conversion of shares of Series B Preferred Stock. In lieu of any fractional share to which the Holder would be entitled but for the provisions of this Section 4(c) based on the number of shares of Series B Preferred Stock held by such Holder, the Corporation shall issue a number of shares to such Holder rounded up to the nearest whole number of shares of Common Stock. No cash shall be paid to any Holder of Series B Preferred Stock by the Corporation upon conversion of Series B Preferred Convertible Stock by such Holder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Reservation of Stock</u>. The Corporation shall at all times when any shares of Series B Preferred Convertible Stock shall be outstanding, reserve and keep available out of its authorized but unissued Common Stock, such number of shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock. If at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all outstanding shares of the Series

B 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Stock Dividends, Splits, Combinations and Reclassifications</u>. If the Corporation at any time on or after the date of this Certificate of Designation subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares of Common Stock into a greater number of shares, the applicable Conversion Rate and other share based metrics in effect immediately prior to such subdivision will be proportionately reduced and the number of shares of Common Stock issuable will be proportionately increased. If the Corporation at any time on or after the date of this Certificate of Designation combines (by combination, reverse stock split or otherwise) one or more classes of its outstanding shares of Common Stock into a smaller number of shares, the applicable Conversion Rate and other share based metrics in effect immediately prior to such combination will be proportionately increased and the number of shares of Common Stock will be proportionately decreased. Any adjustment under this Section will become effective at the close of business on the date the subdivision or combination becomes effective.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Certificate as to Adjustments</u>. Upon the occurrence of each adjustment or readjustment of the Conversion Rate pursuant to Section 4 of this Designation, the Corporation at its expense shall promptly compute such adjustment or readjustment in accordance with the terms hereof and cause its principal financial officer to verify such computation and prepare and furnish to each Holder of Series B Preferred Stock a certificate setting forth such adjustment or readjustment and setting forth in reasonable 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 Series B Preferred Stock, furnish or cause to be furnished to such Holder a like certificate setting forth: (i) such adjustments and readjustments; (ii) the Conversion Rate in effect at such time for the Series B Preferred Stock; and (iii) the number of shares of Common Stock and the amount, if any, of other property that at such time would be received upon the conversion of the Series B Preferred Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>Issue Taxes</u>. The converting Holder shall pay any and all issue and other non- income taxes that may be payable in respect of any issue or delivery of shares of Common Stock on conversion of shares of Series B Preferred Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. <u>Protection Provisions</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Corporation shall not amend, alter, change or repeal the preferences, privileges, special rights or other powers of the Series B Preferred Stock to adversely affect the Series B Preferred Stock, without the written consent of the majority of Holders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) So long as shares of Series B Preferred Stock are outstanding, the Corporation shall not, without first obtaining the approval (by vote or written consent, as provided by law) of the majority of Holders, which consent may be withheld in the Holder's sole and absolute discretion: (i) dissolve the Corporation or effectuate a liquidation; or (ii) alter, amend, or repeal the Certificate of Incorporation of the Corporation in a manner that adversely affects the Series B Preferred Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) In case Series B Preferred Stock shall be redeemed or otherwise cancelled or reacquired by the Corporation, the shares so redeemed, repurchased, or reacquired shall resume the status of authorized but unissued shares of Preferred Stock, and shall no longer be designated as Series B Preferred Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. <u>Severability</u>. If any right, preference or limitation of the Series B Preferred Stock set forth herein is invalid, unlawful or incapable of being enforced by reason of any rule, law or public policy, all other rights, preferences and limitations set forth herein that can be given effect without the invalid, unlawful or unenforceable right, preference or limitation shall nevertheless remain in full force and effect, and no right, preference or limitation herein shall be deemed dependent upon any other such right, preference or limitation unless so expressed herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. <u>Amendment</u>. This Certificate of Designation shall not be amended, either directly or indirectly or through merger or consolidation with another entity, in any manner that would alter or change the powers, preferences or special rights of the Series B Preferred Stock to affect them materially and adversely without the consent of the majority of Holders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. <u>Replacement</u>. Upon receipt of evidence reasonably satisfactory to the Corporation (an affidavit of the registered holder shall be satisfactory) of the ownership and the loss, theft, destruction, or mutilation of any certificate evidencing shares of Series B Preferred Stock, and in the case of any such loss, theft or destruction upon receipt of indemnity reasonably satisfactory to the Corporation or in the case of any such mutilation upon surrender of such certificate, the Corporation, at its expense, shall execute and deliver in lieu of such certificate a new certificate of like kind representing the number of shares of such Series represented by such lost, stolen, destroyed or mutilated certificate and dated the date of such lost, stolen, destroyed or mutilated certificate.

IN WITNESS WHEREOF, the Corporation has caused this Certificate of Designation to be executed by the Chief Executive Officer of the Corporation, this 25th day of August, 2025.

<u>By: /s/ Vincent Napolitano</u> Vincent Napolitano

Chief Executive Officer

## Exhibit 4.1

***Final Form***

 ****

 

**COMMON STOCK PURCHASE WARRANT**

**FAVO CAPITAL, INC.**

Warrant Shares:<u> </u>

Issue Date: September 16, 2024

THIS COMMON STOCK PURCHASE WARRANT (this "<u>Warrant</u>") certifies that, for value received, [ ] or its assigns (the "<u>Holder</u>") is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the date hereof (the "<u>Initial Exercise Date</u>") and on or prior to 5:00 p.m. (New York City time) on the fifth anniversary of the Initial Exercise Date, which such date is September 16, 2029 (the "<u>Termination Date</u>") but not thereafter, to subscribe for and purchase from Favo Capital, Inc., a Nevada corporation (the "<u>Company</u>"), up to<u> </u> shares (as subject to adjustment hereunder, the "<u>Warrant Shares</u>") of Common Stock (as defined below). The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).

<u>Section 1</u>. <u>Definitions</u>. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities Purchase Agreement (the "<u>Purchase Agreement</u>"), dated September 16, 2024, among the Company and the purchasers signatory thereto.

<u>Section 2</u>. <u>Exercise</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) <u>Exercise of Warrant</u>. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise in the form annexed hereto (the "<u>Notice of Exercise</u>"). Within the earlier of (i) two

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver to the Company the aggregate Exercise Price for the Warrant Shares specified in the applicable Notice of Exercise by wire transfer or cashier's check drawn on a United States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required by the Company. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver to the Holder any objection to any Notice of Exercise within one (1) Business Day of receipt of such notice. **The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) <u>Exercise Price</u>. The exercise price per share of Common Stock under this Warrant shall be **$**0.40, subject to adjustment hereunder (the "<u>Exercise Price</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) <u>Cashless Exercise</u>. If at the time of exercise hereof there is no effective registration statement registering, or the prospectus contained therein is not available for the resale of the Warrant Shares by the Holder, and the Company has given its written approval, which approval may be withheld by the Company in its absolute discretion, then this Warrant may also be exercised, in whole or in part, at such time by means of a "cashless exercise" in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:

---

| | |
|:---|:---|
| (A) = | as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of "regular trading hours" (as defined in Rule 600(b)(68) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on the principal Trading Market as reported by Bloomberg L.P. ("<u>Bloomberg</u>") as of the time of the Holder's execution of the applicable Notice of Exercise if such Notice of Exercise is executed during "regular trading hours" on a Trading Day and is delivered within two (2) hours thereafter (including until two (2) hours after the close of "regular trading hours" on a Trading Day) pursuant to Section 2(a) hereof or (iii) the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered pursuant to Section 2(a) hereof after the close of "regular trading hours" on such Trading Day; |
| (B) = | the Exercise Price of this Warrant, as adjusted hereunder; and |
| (X) = | the number of Warrant Shares that would be issuable upon exercise of this Warrant in<br> accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise. |

---

If Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act, the holding period of the Warrant Shares being issued may be tacked on to the holding period of this Warrant. The Company agrees not to take any position contrary to this Section 2(c).

"<u>Bid Price</u>" means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock are then listed or quoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date) on the Trading Market on which the Common Stock are then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock are not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of one share of Common Stock as determined by an independent appraiser selected in good faith by the Purchasers Holders of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.

"<u>VWAP</u>" means, for any date, the price determined by the first of the following clauses that applies:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) if the Common Stock are then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market on which the Common Stock are then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if the OTCQB Venture Market ("OTCQB") or the OTCQX Best Market ("OTCQX") is a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock are not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on the Pink Open Market ("Pink Market") operated by the OTC Markets, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Purchasers Holders of a majority in interest of the Common Stock then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d) <u>Mechanics of Exercise</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. <u>Delivery of Warrant Shares Upon Exercise</u>. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Transfer Agent to the Holder by crediting the account of the Holder's or its designee's balance account with The Depository Trust Company through its Deposit or Withdrawal at Custodian system ("<u>DWAC</u>") if the Company is then a participant in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by the Holder or (B) the Warrant Shares are eligible for resale by the Holder without volume or manner-of-sale limitations pursuant to Rule 144 (assuming cashless exercise of the Warrants), and otherwise by physical delivery of a certificate, registered in the Company's share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the earliest of (i) two (2) Trading Days after the delivery to the Company of the Notice of Exercise, provided that payment of the aggregate Exercise Price (other than in the instance of a cashless exercise) is received by and (ii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Company of the Notice of Exercise, provided that payment of the aggregate Exercise Price (other than in the instance of a cashless exercise) is received by the Company two (2) Trading Days prior to such number of Trading Days comprising the Standard Settlement Period after the delivery, (such date, the "<u>Warrant Share Delivery Date</u>"). Upon delivery of the Notice of Exercise, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received within the earlier of (i) two (2) Trading Day and (ii) the number of Trading Days comprising the Standard Settlement Period following delivery of the Notice of Exercise. If the Company fails for any reason (other than failure of the Holder to timely deliver the aggregate Exercise Price, unless the Warrant is validly exercised by means of a cashless exercise) to deliver or cause the delivery to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP of the Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the third Trading Day after the Warrant Share Delivery Date) for each Trading Day after such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent that is a participant in the FAST program so long as this Warrant remains outstanding and exercisable. As used herein, "Standard Settlement Period" means the standard settlement period, expressed in a number of Trading Days, on the Company's primary Trading Market with respect to the Common Stock as in effect on the date of delivery of the Notice of Exercise

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. <u>Delivery of New Warrants Upon Exercise</u>. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii. <u>Rescission Rights</u>. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iv. <u>Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise</u>. In addition to any other rights available to the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date (other than any such failure that is solely due to any action or inaction by the Holder with respect to such exercise), and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder's brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a "<u>Buy-In</u>"), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder's total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of this Warrant to purchase shares of Common Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder's right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company's failure to timely deliver shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;v. <u>No Fractional Shares or Scrip</u>. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or round up to the next whole share.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;vi. <u>Charges, Taxes and Expenses</u>. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; <u>provided</u>, <u>however</u>, that, in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Warrant Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;vii. <u>Closing of Books</u>. The Company will not close its shareholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e) <u>Holder's Exercise Limitations</u>. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. For purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder's determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination and a submission of a Notice of Exercise shall be deemed a representation and warranty by the Holder of the foregoing determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(e), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company's most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of Common Stock outstanding. Upon the written or oral request of a Holder, the Company shall within one Trading Day confirm orally and in writing to the Holder the number of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number of outstanding shares of Common Stock was reported. The "<u>Beneficial Ownership Limitation</u>" shall be 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of Common Stock outstanding immediately after giving effect to the issuance of Common Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.

<u>Section 3</u>. <u>Certain Adjustments</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) <u>Stock Dividends and Splits</u>. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in Common Stock (which, for avoidance of doubt, shall not include any Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides

outstanding Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding Common Stock into a smaller number of shares, or (iv) issues by reclassification of Common Stock or any other shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of Common Stock outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of shareholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) <u>[Intentionally Omitted.]</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) <u>Subsequent Rights Offerings</u>. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to all of the record holders of any class of Common Stock (the "<u>Purchase Rights</u>"), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (<u>provided</u>, <u>however</u>, that, to the extent that the Holder's right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d) <u>Pro Rata Distributions</u>. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to shareholders, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a "<u>Distribution</u>"), at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of Common Stock are to be determined for the participation in such Distribution (<u>provided</u>, <u>however</u>, that, to the extent that the Holder's right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any Common Stock as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e) <u>Fundamental Transaction</u>. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person, after giving effect to such transaction, the shareholders of the Company immediately prior to such transaction own less than 50% of the aggregate voting power of the Company or the successor entity of such transaction, (ii) the Company (all of its Subsidiaries, taken as a whole) directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to

which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Stock or 50% or more of the voting power of the equity of the Company, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock are effectively converted into or exchanged for other securities, cash or property, after giving effect to such transaction, the shareholders of the Company immediately prior to such transaction own less than 50% of the aggregate voting power of the Company or the successor entity of such transaction, or (v) the Company, directly or indirectly, in one or more related transactions consummates a share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off, merger or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires more than 50% of the outstanding Common Stock (not including any Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination) (each a "<u>Fundamental Transaction</u>"), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the "<u>Alternate Consideration</u>") receivable as a result of such Fundamental Transaction by a holder of the number of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash, or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. Notwithstanding anything to the contrary, in the event of a Fundamental Transaction, the Company or any Successor Entity (as defined below) shall, at the Holder's option, exercisable at any time concurrently with, or within 30 days after, the consummation of the Fundamental Transaction (or, if later, the date of the public announcement of the applicable Fundamental Transaction), purchase this Warrant from the Holder by paying to the Holder an amount of cash equal to the Black Scholes Value (as defined below) of the remaining unexercised portion of this Warrant on the date of the consummation of such Fundamental Transaction; <u>provided</u>, <u>however</u>, that, if the Fundamental Transaction is not within the Company's control, including not approved by the Company's Board of Directors, the Holder shall only be entitled to receive from the Company or any Successor Entity, as of the date of consummation of such Fundamental Transaction, the same type or form of consideration (and in the same proportion), at the Black Scholes Value of the unexercised portion of this Warrant, that is being offered and paid to the holders of Common Stock of the Company in connection with the Fundamental Transaction, whether that consideration be in the form of cash, stock or any combination thereof, or whether the holders of Common Stock are given the choice to receive from among alternative forms of consideration in connection with the Fundamental Transaction; <u>provided</u>, <u>further</u>, that if holders of Common Stock of the Company are not offered or paid any consideration in such Fundamental Transaction, such holders of Common Stock will be deemed to have received the equivalent equity of the Successor Entity (which Entity may be the Company following such Fundamental Transaction) in such Fundamental Transaction. "<u>Black Scholes Value</u>" means the value of this Warrant based on the Black- Scholes Option Pricing Model obtained from the "OV" function on Bloomberg determined as of the day of consummation of the applicable Fundamental Transaction for pricing purposes and reflecting (A) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the time between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date, (B) an expected volatility equal to the greater of (1) the 30 day volatility, (2) the 100 day volatility or (3) the 365 day volatility, each of clauses (1)-(3) as obtained from the HVT function on Bloomberg (determined utilizing a 365 day annualization factor) as of the Trading Day immediately following the public announcement of the applicable contemplated Fundamental Transaction, (C) the underlying price per share used in such calculation shall be the highest VWAP during the period beginning on the Trading Day

immediately preceding the public announcement of the applicable contemplated Fundamental Transaction (or the consummation of the applicable Fundamental Transaction, if earlier) and ending on the Trading Day of the Holder's request pursuant to this Section 3(e) and (D) a remaining option time equal to the time between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date and (E) a zero cost of borrow. The payment of the Black Scholes Value will be made by wire transfer of immediately available funds (or such other consideration) within the later of (i) five Business Days of the Holder's election and (ii) the date of consummation of the Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the "<u>Successor Entity</u>") to assume in writing all of the obligations of the Company under this Warrant in accordance with the provisions of this Section 3(e) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant referring to the "Company" shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant with the same effect as if such Successor Entity had been named as the Company herein. For the avoidance of doubt, the Holder shall be entitled to the benefits of the provisions of this Section 3(e) regardless of whether the Company has sufficient authorized Common Stock for the issuance of Warrant Shares.

For the avoidance of doubt and notwithstanding anything to the contrary, the offering and other transactions contemplated by the Securities Purchase Agreement shall not be deemed to constitute a Fundamental Transaction for purposes hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f) <u>Calculations</u>. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 3, the number of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of Common Stock (excluding treasury shares, if any) issued and outstanding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g) Notice to Holder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly deliver to the Holder by email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. <u>Notice to Allow Exercise by Holder</u>. If (A) the Company shall declare a Distribution on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any shareholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company (and of its Subsidiaries, taken as a whole) is a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock

are converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by email to the Holder at its latest email address as it shall appear upon the Warrant Register of the Company, at least 20 Business Days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Report of Foreign Private Issuer on Form 6-K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.

<u>Section 4</u>. <u>Transfer of Warrant</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) <u>Transferability</u>. This Warrant and all rights hereunder are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of the date on which the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) <u>New Warrants</u>. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the initial issuance date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) <u>Warrant Register</u>. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the "<u>Warrant Register</u>"), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d) <u>[Intentionally Omitted]</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e) <u>Representation by the Holder</u>. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon any exercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for distributing or reselling such Warrant Shares or any part thereof in violation of the Securities Act or any applicable state securities law, except pursuant to sales registered or exempted under the Securities Act.

<u>Section 5</u>. <u>Miscellaneous</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) <u>No Rights as Shareholder Until Exercise; No Settlement in Cash</u>. This Warrant does not entitle the Holder to any voting rights, dividends or other rights as a shareholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section 3. Without limiting any rights of a Holder to receive Warrant Shares on a "cashless exercise" upon Company approval pursuant to Section 2(c) or to receive cash payments pursuant to Section 2(d)(i) and Section 2(d)(iv) herein, in no event shall the Company be required to net cash settle an exercise of this Warrant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) <u>Loss, Theft, Destruction or Mutilation of Warrant</u>. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) <u>Saturdays, Sundays, Holidays, etc</u>. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e) <u>Jurisdiction</u>. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined in accordance with the provisions of the Securities Purchase Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f) <u>[Intentionally Omitted.]</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g) <u>Nonwaiver and Expenses</u>. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice the Holder's rights, powers or remedies. Without limiting any other provision of this Warrant or the Underwriting Agreement, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys' fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;h) <u>Notices</u>. Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered in accordance with the notice provisions of the Underwriting Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i) <u>Limitation of Liability</u>. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price of any Common Stock or as a shareholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;j) <u>Remedies</u>. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;k) <u>Successors and Assigns</u>. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;l) <u>Amendment</u>. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company, on the one hand, and the Holder or the beneficial owner of this Warrant, on the other hand.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;m) <u>Severability</u>. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;n) <u>Headings</u>. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.

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*(Signature Page Follows)*

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.

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| **FAVO CAPITAL, INC.** | **FAVO CAPITAL, INC.** |
| By: |  |
| Name: | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Vincent Napolitano |
| Title: | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Chief Executive Officer |

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## Exhibit 4.2

***Final Form***

 ****

**[FORM OF PRE-FUNDED WARRANT]**

**NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933**, **AS AMENDED**, **OR APPLICABLE STATE SECURITIES LAWS**. **THE SECURITIES MAY** **NOT BE OFFERED FOR SALE**, **SOLD**, **TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933**, **AS AMENDED**, **OR (B) AN OPINION OF COUNSEL SELECTED BY THE HOLDER**, **IN A GENERALLY ACCEPTABLE FORM**, **THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT**. **NOTWITHSTANDING THE FOREGOING**, **THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES**.

**FAVO CAPITAL**, **INC**.

**Pre-Funded Warrant To Purchase Common Shares**

Warrant No.:<u> </u> Number of Common Shares:<u> </u>

Date of Issuance: September 16, 2024 ("**Issuance Date**")

Favo Capital, Inc., a Nevada corporation (the "**Company**"), hereby certifies that, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, [HOLDER], the registered holder hereof or its permitted assigns (the "**Holder**"), is entitled, subject to the terms set forth below, to purchase from the Company, at the Exercise Price (as defined below) then in effect, at any time or times during the Exercise Period until the earlier of such time as (i) this Warrant is exercised in full<u> </u> ()<sup>1</sup> fully paid and nonassessable Common Shares, subject to adjustment as provided herein (the "**Warrant Shares**") and (ii) the Common Stock of the Company shall have been uplisted (the "**Uplisting**"), but not thereafter (the "**Termination Date**"). Except as otherwise defined herein, capitalized terms in this Warrant to Purchase Common Shares (including any Warrants to Purchase Common Shares issued in exchange, transfer or replacement hereof, this "**Warrant**"), shall have the meanings set forth in Section 17. This Warrant is one of the Pre-funded Warrants (the "**SPA Warrants**") issued pursuant to Section 1 of that certain Securities Purchase Agreement, dated as of September 16, 2024 (the "**Subscription Date**"), by and among the Company and the investors (the "**Buyers**") party thereto (the "**Securities Purchase Agreement**"). Capitalized terms used herein and not otherwise defined shall have the definitions ascribed to such terms in the Securities Purchase Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>EXERCISE OF WARRANT</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Mechanics of Exercise</u>. Subject to the terms and conditions hereof (including, without limitation, the limitations set forth in Section 1(f)), one-sixth (1/6<sup>th</sup>) of the

Warrant Shares issuable hereunder may be exercised by the Holder at any time or times on or after the date that is six months from the Issuance Date and one-sixth (1/6th) of the Warrant Shares issuable hereunder may be exercised each month thereafter (the "**Exercise Period**") until the Termination Date, in whole or in part, by (i) delivery of a written notice, in the form attached hereto as <u>Exhibit A</u> (the "**Exercise Notice**"), of the Holder's election to exercise this Warrant and (ii) (A) payment to the Company of an amount equal to the applicable Exercise Price multiplied by the number of Warrant Shares as to which this Warrant is being exercised (the "**Aggregate Exercise Price**") in cash by wire transfer of immediately available funds or (B) by notifying the Company that this Warrant is being exercised pursuant to a Cashless Exercise (as defined in Section 1(d)). The Holder shall not be required to deliver the original Warrant in order to effect an exercise hereunder. Execution and delivery of the Exercise Notice with respect to less than all of the Warrant Shares shall have the same effect as cancellation of the original Warrant and issuance of a new Warrant evidencing the right to purchase the remaining number of Warrant Shares. On or before the first (1st) Trading Day following the date on which the Company has received the Exercise Notice, the Company shall transmit by electronic mail an acknowledgment of confirmation of receipt of the Exercise Notice to the Holder and the Company's transfer agent (the "**Transfer Agent**"). On or before the earlier of (i) the second (2<sup>nd</sup>) Trading Day and (ii) the number of Trading Days comprising the Standard Settlement Period, in each case, following the date on which the Holder delivers the Exercise Notice to the Company, so long as the Holder delivers the Aggregate Exercise Price (or notice of a Cashless Exercise) on or prior to the Trading Day following the date on which the Company has received the Exercise Notice (the "**Share Delivery Date**") (provided that if the Aggregate Exercise Price has not been delivered by such date, the Share Delivery Date shall be one (1) Trading Day after the Aggregate Exercise Price (or notice of a Cashless Exercise) is delivered), the Company shall (X) provided that the Transfer Agent is participating in The Depository Trust Company ("**DTC**") Fast Automated Securities Transfer Program and (A) the Warrant Shares are subject to an effective resale registration statement in favor of the Holder or (B) if exercised via Cashless Exercise, at a time when Rule 144 would be available for resale of the Warrant Shares by the Holder, credit such aggregate number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the Holder's or its designee's balance account with DTC through its Deposit / Withdrawal At Custodian system, or (Y) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program or (A) the Warrant Shares are not subject to an effective resale registration statement in favor of the Holder and (B) if exercised via Cashless Exercise, at a time when Rule 144 would not be available for resale of the Warrant Shares by the Holder, deliver to the Holder book entry statements evidencing the Warrant Shares registered in the Company's share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise. The Company shall be responsible for all fees and expenses of the Transfer Agent and all fees and expenses with respect to the issuance of Warrant Shares via DTC, if any. Upon delivery of the Exercise Notice, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date such Warrant Shares are credited to the Holder's DTC account or the date of delivery of the book entry statements evidencing such Warrant Shares, as the case may be. If this Warrant is submitted in connection with any exercise pursuant to this Section 1(a) and the number of Warrant Shares represented by this Warrant submitted for exercise is greater than the number of Warrant Shares being acquired upon an exercise, then the Company shall as soon as practicable and in no event later than three (3) Trading Days after any exercise and at its own expense, issue a new Warrant

(in accordance with Section 7(d)) representing the right to purchase the number of Warrant Shares issuable immediately prior to such exercise under this Warrant, less the number of Warrant Shares with respect to which this Warrant is exercised. No fractional Warrant Shares are to be issued upon the exercise of this Warrant, but rather the number of Warrant Shares to be issued shall be rounded up to the nearest whole number. The Company shall pay any and all taxes which may be payable with respect to the issuance and delivery of Warrant Shares upon exercise of this Warrant. The Company's obligations to issue and deliver Warrant Shares in accordance with the terms and subject to the conditions hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Exercise Price</u>. The aggregate exercise price of this Warrant, except for a nominal exercise price of $0.0001 per Warrant Share, was pre-funded to the Company on or prior to the Issuance Date and, consequently, no additional consideration (other than the nominal exercise price of $0.0001 per Warrant Share) shall be required to be paid by the Holder to any Person to effect any exercise of this Warrant. The Holder shall not be entitled to the return or refund of all, or any portion, of such pre-paid aggregate exercise price under any circumstance or for any reason whatsoever, including in the event this Warrant shall not have been exercised. The remaining unpaid exercise price per Ordinary Share under this Warrant shall be $0.0001, subject to adjustment hereunder (the "**Exercise Price**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Company's Failure to Timely Deliver Securities</u>. If the Company shall fail to cause its transfer agent to transmit to the Holder on or prior to the Share Delivery Date, Warrant Shares pursuant to an exercise notice delivered by the Holder and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder's brokerage firm otherwise purchases, Common Shares to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a "**Buy-In**"), then the Company shall, within three (3) Trading Days after the Holder's request, (a) pay in cash to the Holder the amount, if any, by which (x) the Holder's total purchase price (including brokerage commissions, if any) for the Common Shares so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (b) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of Common Shares that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Common Shares having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of Common Shares with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (a) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and evidence of the amount of such loss. Nothing herein shall limit the Holder's right to pursue any other remedies available to it hereunder, at law or in equity, including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company's failure to timely deliver Common Shares upon the exercise of this Warrant as required pursuant to the terms hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Cashless Exercise</u>. If a registration statement is not available for the resale of such Warrant Shares, the Holder may, in its sole discretion, exercise this Warrant in whole or in part and, in lieu of making the cash payment otherwise contemplated to be made to the Company upon such exercise in payment of the Aggregate Exercise Price, elect instead to receive upon such exercise the "Net Number" of Common Shares determined according to the following formula (a "**Cashless Exercise**"):

Net Number = <u> <u>(A x B) - (A x C)</u> </u> <br> B

For purposes of the foregoing formula:

A = the total number of shares with respect to which this Warrant is then being exercised.

B = as applicable: (i) the Weighted Average Price of the Common Shares on the Trading Day immediately preceding the date of the applicable Exercise Notice if such Exercise Notice is (1) both executed and delivered pursuant to Section 1(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 1(a) hereof on a Trading Day prior to the opening of "regular trading hours" (as defined in Rule 600(b) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) the bid price of the Common Shares on the principal Trading Market as reported by Bloomberg as of the time of the Holder's execution of the applicable Exercise Notice, if such Exercise Notice is executed during "regular trading hours" on a Trading Day and is delivered within two (2) hours thereafter (including until two (2) hours after the close of "regular trading hours" on a Trading Day) pursuant to Section 1(a) hereof or (iii) the Weighted Average Price of the Common Shares on the date of the applicable Exercise Notice if the date of such Exercise Notice is a Trading Day and such Exercise Notice is both executed and delivered pursuant to Section 1(a) hereof after the close of "regular trading hours" on such Trading Day;

C = the Exercise Price then in effect for the applicable Warrant Shares at the time of such exercise.

If Common Shares are issued pursuant to this Section 1(d), the Company hereby acknowledges and agrees that the Warrant Shares issued in a Cashless Exercise shall be deemed to have been acquired by the Holder, and the holding period for the Warrant Shares shall be deemed to have commenced, on the date this Warrant was originally issued pursuant to the Securities Purchase Agreement. The Company agrees not to take any position contrary to this Section 1(d).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Disputes</u>. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares, the Company shall promptly issue to the Holder the number of Warrant Shares that are not disputed and resolve such dispute in accordance with Section 12.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Beneficial Ownership Limitations on Exercises</u>. Notwithstanding anything to the contrary contained herein, no exercise of any portion of this Warrant shall be effected, and the Holder shall not have the right to exercise any portion of this Warrant, pursuant to the terms and conditions of this Warrant and any such exercise shall be null and void and treated as if never made, to the extent that after giving effect to such exercise, the Holder together with the other Attribution Parties collectively would beneficially own in excess of 4.99% (the "**Maximum Percentage**") of the number of Common Shares outstanding immediately after giving effect to such exercise. For purposes of the foregoing sentence, the aggregate number of Common Shares beneficially owned by the Holder and the other Attribution Parties shall include the number of Common Shares held by the Holder and all other Attribution Parties plus the number of Common Shares issuable upon exercise of this Warrant with respect to which the determination of such sentence is being made, but shall exclude the number of Common Shares which would be issuable upon (A) exercise of the remaining, unexercised portion of this Warrant beneficially owned by the Holder or any of the other Attribution Parties and (B) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company (including, without limitation, any convertible notes or convertible preferred stock or warrants, including the Series A Warrants and the Series B Warrants (each as defined in the Securities Purchase Agreement)) and Pre-funded Warrants beneficially owned by the Holder or any other Attribution Party subject to a limitation on conversion or exercise analogous to the limitation contained in this Section 1(f). For purposes of this Section 1(f), beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the "**1934 Act**"). For purposes of this Warrant, in determining the number of outstanding Common Shares the Holder may acquire upon the exercise of this Warrant without exceeding the Maximum Percentage, the Holder may rely on the number of outstanding Common Shares as reflected in (x) the Company's most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or other public filing with the Securities and Exchange Commission (the "**SEC**") or equivalent reports published by the Company on otcmarkets.com operated by OTC Markets Group, Inc. ("OTC Markets"), as the case may be, (y) a more recent public announcement by the Company or (3) any other written notice by the Company or the Transfer Agent setting forth the number of Common Shares outstanding (the "**Reported Outstanding Share Number**"). If the Company receives an Exercise Notice from the Holder at a time when the actual number of outstanding Common Shares is less than the Reported Outstanding Share Number, the Company shall (i) notify the Holder in writing of the number of Common Shares then outstanding and, to the extent that such Exercise Notice would otherwise cause the Holder's beneficial ownership, as determined pursuant to this Section 1(f), to exceed the Maximum Percentage, the Holder must notify the Company of a reduced number of Warrant Shares to be purchased pursuant to such Exercise Notice (the number of shares by which such purchase is reduced, the "**Reduction Shares**") and (ii) as soon as reasonably practicable, the Company shall return to the Holder any exercise price paid by the Holder for the Reduction Shares. For any reason at any time, upon the written or oral request of the Holder, the Company shall within one (1) Trading Day confirm orally and in writing or by electronic mail to the Holder the number of Common Shares then outstanding. In any case, the number of outstanding Common Shares shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder and any other Attribution Party since the date as of which the Reported Outstanding Share Number was reported. In the event that the issuance of Common Shares to the Holder upon exercise of this Warrant results in the Holder and the other Attribution Parties being deemed to beneficially own, in the aggregate,

more than the Maximum Percentage of the number of outstanding Common Shares (as determined under Section 13(d) of the 1934 Act), the number of shares so issued by which the Holder's and the other Attribution Parties' aggregate beneficial ownership exceeds the Maximum Percentage (the "**Excess Shares**") shall be deemed null and void and shall be cancelled ab initio, and the Holder shall not have the power to vote or to transfer the Excess Shares. As soon as reasonably practicable after the issuance of the Excess Shares has been deemed null and void, the Company shall return to the Holder the exercise price paid by the Holder for the Excess Shares. For purposes of clarity, the Common Shares issuable pursuant to the terms of this Warrant in excess of the Maximum Percentage shall not be deemed to be beneficially owned by the Holder for any purpose including for purposes of Section 13(d) or Rule 16a-1(a)(1) of the 1934 Act. No prior inability to exercise this Warrant pursuant to this paragraph shall have any effect on the applicability of the provisions of this paragraph with respect to any subsequent determination of exercisability. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 1(f) to the extent necessary to correct this paragraph or any portion of this paragraph which may be defective or inconsistent with the intended beneficial ownership limitation contained in this Section 1(f) or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitation contained in this paragraph may not be waived and shall apply to a successor holder of this Warrant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>Insufficient Authorized Shares</u>. If at any time while this Warrant remains outstanding the Company does not have a sufficient number of authorized and unreserved Common Shares to satisfy its obligation to reserve for issuance upon exercise of this Warrant at least a number of Common Shares equal to 100% of the number of Common Shares as shall from time to time be necessary to effect the exercise of all of this Warrant then outstanding without regard to any limitation on exercise included herein (the "**Required Reserve Amount**" and the failure to have such sufficient number of authorized and unreserved Common Shares, an "**Authorized Share Failure**"), then the Company shall immediately take all action necessary to increase the Company's authorized Common Shares to an amount sufficient to allow the Company to reserve the Required Reserve Amount for this Warrant then outstanding. Without limiting the generality of the foregoing sentence, as soon as practicable after the date of the occurrence of an Authorized Share Failure, but in no event later than sixty (60) days after the occurrence of such Authorized Share Failure, the Company shall hold a meeting of its shareholders for the approval of an increase in the number of authorized Common Shares. In connection with such meeting, the Company shall provide each shareholder with a proxy statement and shall use its best efforts to solicit its shareholders' approval of such increase in authorized Common Shares and to cause its board of directors to recommend to the shareholders that they approve such proposal. Notwithstanding the foregoing, if any such time of an Authorized Share Failure, the Company is able to obtain the approval of holders of a majority of the shares voting at a general meeting to approve the increase in the number of authorized Common Shares, the Company may satisfy this obligation by obtaining such approval. In the event that upon any exercise of this Warrant, the Company does not have sufficient authorized shares to deliver in satisfaction of such exercise, then unless the Holder elects to void such attempted exercise, the Holder may require the Company to pay to the Holder within three (3) Trading Days of the applicable exercise, cash in an amount equal to the product of (i) the quotient determined by dividing (x) the number of Warrant Shares that the Company is unable to deliver pursuant to this Section 1(g), by (y) the total number of Warrant Shares issuable upon exercise of this Warrant (without regard to any limitations or restrictions on exercise of this Warrant) and (ii) the Black Scholes Value (as defined in the Series A Warrants);

provided, that (x) references to "the day immediately following the public announcement of the applicable Fundamental Transaction" in the definition of "Black Scholes Value" shall instead refer to "the date the Holder exercises this Warrant and the Company cannot deliver the required number of Warrant Shares because of an Authorized Share Failure" and (y) clause (iii) of the definition of "Black Scholes Value" shall instead refer to "the underlying price per share used in such calculation shall be the highest Weighted Average Price during the period beginning on the date of the applicable date of exercise and the date that the Company makes the applicable cash payment."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES</u>. If the Company at any time on or after the Subscription Date subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding Common Shares into a greater number of shares, the Exercise Price in effect immediately prior to such subdivision will be proportionately reduced and the number of Warrant Shares will be proportionately increased. If the Company at any time on or after the Subscription Date combines (by combination, reverse stock split or otherwise) one or more classes of its outstanding Common Shares into a smaller number of shares, the Exercise Price in effect immediately prior to such combination will be proportionately increased and the number of Warrant Shares will be proportionately decreased. Any adjustment under this Section 2 shall become effective at the close of business on the date the subdivision or combination becomes effective.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. <u>RIGHTS UPON DISTRIBUTION OF ASSETS</u>. If the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of Common Shares, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property, options, evidence of indebtedness or any other assets by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a "**Distribution**"), at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of Common Shares acquirable upon complete exercise of this Warrant (without regard to any limitations or restrictions on exercise of this Warrant, including without limitation, the Maximum Percentage) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of Common Shares are to be determined for the participation in such Distribution (<u>provided</u>, <u>however</u>, that to the extent that the Holder's right to participate in any such Distribution would result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such Distribution to such extent (and shall not be entitled to beneficial ownership of such Common Shares as a result of such Distribution (and beneficial ownership) to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time or times as its right thereto would not result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, at which time or times the Holder shall be granted such Distribution (and any Distributions declared or made on such initial Distribution or on any subsequent Distribution held similarly in abeyance) to the same extent as if there had been no such limitation).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. <u>PURCHASE RIGHTS; FUNDAMENTAL TRANSACTIONS</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Purchase Rights</u>. If at any time the Company grants, issues or sells any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of Common Shares (the "**Purchase Rights**"), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of Common Shares acquirable upon complete exercise of this Warrant (without regard to any limitations or restrictions on exercise of this Warrant, including without limitation, the Maximum Percentage) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of Common Shares are to be determined for the grant, issue or sale of such Purchase Rights (<u>provided</u>, <u>however</u>, that to the extent that the Holder's right to participate in any such Purchase Right would result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such Purchase Right to such extent (and shall not be entitled to beneficial ownership of such Common Shares as a result of such Purchase Right (and beneficial ownership) to such extent) and such Purchase Right to such extent shall be held in abeyance for the benefit of the Holder until such time or times as its right thereto would not result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, at which time or times the Holder shall be granted such right (and any Purchase Right granted, issued or sold on such initial Purchase Right or on any subsequent Purchase Right held similarly in abeyance) to the same extent as if there had been no such limitation).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Fundamental Transactions</u>. The Company shall not enter into a Fundamental Transaction unless the Successor Entity assumes in writing all of the obligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section 4(b) pursuant to written agreements in form and substance satisfactory to the Required Holders, including agreements, if so requested by the Holder, to deliver to each holder of the SPA Warrants in exchange for such SPA Warrants a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant, including, without limitation, an adjusted exercise price equal to the value for the Common Shares reflected by the terms of such Fundamental Transaction, and exercisable for a corresponding number of shares of capital stock equivalent to the Common Shares acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and satisfactory to the Required Holders, and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the Common Shares pursuant to such Fundamental Transaction and the value of such shares of capital stock, such adjustments to the number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the occurrence or consummation of such Fundamental Transaction). Any security issuable or potentially issuable to the Holder pursuant to the terms of this Warrant on the consummation of a Fundamental Transaction that was within the Company's control to enter into or to avoid shall be registered and freely tradable by the Holder without any restriction or limitation or the requirement to be subject to any holding period pursuant to any applicable securities laws. No later than (i) thirty (30) days prior to the occurrence or consummation of any Fundamental Transaction or (ii) if later, the first Trading Day following the date the Company first becomes aware of the occurrence or potential occurrence of a Fundamental Transaction, the Company shall deliver written notice thereof via facsimile or electronic mail and overnight courier to the Holder. Upon the occurrence or consummation of any Fundamental Transaction that was within the

Company's control to enter into or to avoid, it shall be a required condition to the occurrence or consummation of any such Fundamental Transaction that, the Company and the Successor Entity or Successor Entities, jointly and severally, shall succeed to, and the Company shall cause any Successor Entity or Successor Entities to jointly and severally succeed to, and be added to the term "Company" under this Warrant (so that from and after the date of such Fundamental Transaction, each and every provision of this Warrant referring to the "Company" shall refer instead to each of the Company and the Successor Entity or Successor Entities, jointly and severally), and the Company and the Successor Entity or Successor Entities, jointly and severally, may exercise every right and power of the Company prior thereto and shall assume all of the obligations of the Company prior thereto under this Warrant with the same effect as if the Company and such Successor Entity or Successor Entities, jointly and severally, had been named as the Company in this Warrant, and, solely at the request of the Holder, if the Successor Entity and/or Successor Entities is a publicly traded corporation whose common stock is quoted on or listed for trading on an Eligible Market, shall deliver (in addition to and without limiting any right under this Warrant) to the Holder in exchange for this Warrant a security of the Successor Entity and/or Successor Entities evidenced by a written instrument substantially similar in form and substance to this Warrant and exercisable for a corresponding number of shares of capital stock of the Successor Entity and/or Successor Entities (the "**Successor Capital Stock**") equivalent to the Common Shares acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction (such corresponding number of shares of Successor Capital Stock to be delivered to the Holder shall be equal to the greater of (A) the quotient of (i) the aggregate dollar value of all consideration (including cash consideration and any consideration other than cash ("**Non-Cash Consideration**"), in such Fundamental Transaction, as such values are set forth in any definitive agreement for the Fundamental Transaction that has been executed at the time of the first public announcement of the Fundamental Transaction or, if no such value is determinable from such definitive agreement, as determined in accordance with Section 12 with the term "**Non-Cash Consideration**" being substituted for the term "**Exercise Price**") that the Holder would have been entitled to receive upon the happening of such Fundamental Transaction or the record, eligibility or other determination date for the event resulting in such Fundamental Transaction, had this Warrant been exercised immediately prior to such Fundamental Transaction or the record, eligibility or other determination date for the event resulting in such Fundamental Transaction (without regard to any limitations on the exercise of this Warrant) (the "**Aggregate Consideration**") divided by (ii) the per share Closing Sale Price of such Successor Capital Stock on the Trading Day immediately prior to the consummation or occurrence of the Fundamental Transaction and (B) the product of (i) the quotient obtained by dividing (x) the Aggregate Consideration, by (y) the Closing Sale Price of the Common Shares on the Trading Day immediately prior to the consummation or occurrence of the Fundamental Transaction and (ii) the highest exchange ratio pursuant to which any shareholder of the Company may exchange Common Shares for Successor Capital Stock) (<u>provided</u>, <u>however</u>, to the extent that the Holder's right to receive any such shares of publicly traded common stock (or their equivalent) of the Successor Entity would result in the Holder and its other Attribution Parties exceeding the Maximum Percentage, if applicable, then the Holder shall not be entitled to receive such shares to such extent (and shall not be entitled to beneficial ownership of such shares of publicly traded common stock (or their equivalent) of the Successor Entity as a result of such consideration to such extent) and the portion of such shares shall be held in abeyance for the Holder until such time or times, as its right thereto would not result in the Holder and its other Attribution

Parties exceeding the Maximum Percentage, at which time or times the Holder shall be delivered such shares to the extent as if there had been no such limitation), and such security shall be satisfactory to the Holder, and with an identical exercise price to the Exercise Price hereunder (such adjustments to the number of shares of capital stock and such exercise price being for the purpose of protecting after the consummation or occurrence of such Fundamental Transaction the economic value of this Warrant that was in effect immediately prior to the consummation or occurrence of such Fundamental Transaction, as elected by the Holder solely at its option). Upon occurrence or consummation of the Fundamental Transaction that was within the Company's control to enter into or to avoid, and it shall be a required condition to the occurrence or consummation of such Fundamental Transaction that, the Company and the Successor Entity or Successor Entities shall deliver to the Holder confirmation that there shall be issued upon exercise of this Warrant at any time after the occurrence or consummation of the Fundamental Transaction, as elected by the Holder solely at its option, Common Shares, Successor Capital Stock or, in lieu of the Common Shares or Successor Capital Stock (or other securities, cash, assets or other property purchasable upon the exercise of this Warrant prior to such Fundamental Transaction), such shares of stock, securities, cash, assets or any other property whatsoever (including warrants or other purchase or subscription rights), which for purposes of clarification may continue to be Common Shares, if any, that the Holder would have been entitled to receive upon the happening of such Fundamental Transaction or the record, eligibility or other determination date for the event resulting in such Fundamental Transaction, had this Warrant been exercised immediately prior to such Fundamental Transaction or the record, eligibility or other determination date for the event resulting in such Fundamental Transaction (without regard to any limitations on the exercise of this Warrant), as adjusted in accordance with the provisions of this Warrant. In addition to and not in substitution for any other rights hereunder, prior to the occurrence or consummation of any Fundamental Transaction that was within the Company's control to enter into or to avoid, pursuant to which holders of Common Shares are entitled to receive securities, cash, assets or other property with respect to or in exchange for Common Shares (a "**Corporate Event**"), the Company shall make appropriate provision to ensure that, and any applicable Successor Entity or Successor Entities shall ensure that, and it shall be a required condition to the occurrence or consummation of such Corporate Event that, the Holder will thereafter have the right to receive upon exercise of this Warrant at any time after the occurrence or consummation of the Corporate Event, Common Shares or Successor Capital Stock or, if so elected by the Holder, in lieu of the Common Shares (or other securities, cash, assets or other property) purchasable upon the exercise of this Warrant prior to such Corporate Event (but not in lieu of such items still issuable under Sections 3 and 4(a), which shall continue to be receivable on the Common Shares or on the such shares of stock, securities, cash, assets or any other property otherwise receivable with respect to or in exchange for Common Shares), such shares of stock, securities, cash, assets or any other property whatsoever (including warrants or other purchase or subscription rights and any Common Shares) which the Holder would have been entitled to receive upon the occurrence or consummation of such Corporate Event or the record, eligibility or other determination date for the event resulting in such Corporate Event, had this Warrant been exercised immediately prior to such Corporate Event or the record, eligibility or other determination date for the event resulting in such Corporate Event (without regard to any limitations on exercise of this Warrant). Provision made pursuant to the preceding sentence shall be in a form and substance reasonably satisfactory to the Holder. The provisions of this Section 4(b) shall apply similarly and equally to successive Fundamental Transactions and Corporate Events.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. <u>NON-CIRCUMVENTION</u>. The Company hereby covenants and agrees that the Company will not, by amendment of its Amended and Restated Articles of Association or Bylaws, or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, and will at all times in good faith carry out all of the provisions of this Warrant and take all action as may be required to protect the rights of the Holder. Without limiting the generality of the foregoing, the Company (i) shall not increase the par value of any Common Shares receivable upon the exercise of this Warrant above the Exercise Price then in effect, (ii) shall take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Common Shares upon the exercise of this Warrant, and (iii) shall, so long as any of the SPA Warrants are outstanding, take all action necessary to reserve and keep available out of its authorized and unissued Common Shares, solely for the purpose of effecting the exercise of the SPA Warrants, 100% of the number of Common Shares as shall from time to time be necessary to effect the exercise of the SPA Warrants then outstanding (without regard to any limitations on exercise).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. <u>WARRANT HOLDER NOT DEEMED A SHAREHOLDER</u>. Except as otherwise

specifically provided herein, the Holder, solely in such Person's capacity as a holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of share capital of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, solely in such Person's capacity as the Holder of this Warrant, any of the rights of a shareholder of the Company or any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to the Holder of the Warrant Shares which such Person is then entitled to receive upon the due exercise of this Warrant. In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a shareholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company. Notwithstanding this Section 6, the Company shall provide the Holder with copies of the same notices and other information given to the shareholders of the Company generally, contemporaneously with the giving thereof to the shareholders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. <u>REISSUANCE OF WARRANTS</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Transfer of Warrant</u>. If this Warrant is to be transferred, the Holder shall surrender this Warrant to the Company, whereupon the Company will forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 7(d)), registered as the Holder may request, representing the right to purchase the number of Warrant Shares being transferred by the Holder and, if less than the total number of Warrant Shares then underlying this Warrant is being transferred, a new Warrant (in accordance with Section 7(d)) to the Holder representing the right to purchase the number of Warrant Shares not being transferred.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Lost</u>, <u>Stolen or Mutilated Warrant</u>. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant, and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the Company in customary form and, in the case of mutilation, upon surrender and

cancellation of this Warrant, the Company shall execute and deliver to the Holder a new Warrant (in accordance with Section 7(d)) representing the right to purchase the Warrant Shares then underlying this Warrant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Exchangeable for Multiple Warrants</u>. This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal office of the Company, for a new Warrant or Warrants (in accordance with Section 7(d)) representing in the aggregate the right to purchase the number of Warrant Shares then underlying this Warrant, and each such new Warrant will represent the right to purchase such portion of such Warrant Shares as is designated by the Holder at the time of such surrender; <u>provided</u>, <u>however</u>, that no SPA Warrants for fractional Warrant Shares shall be given.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Issuance of New Warrants</u>. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, such new Warrant (i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated on the face of such new Warrant, the right to purchase the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued pursuant to Section 7(a) or Section 7(c), the Warrant Shares designated by the Holder which, when added to the number of Common Shares underlying the other new Warrants issued in connection with such issuance, does not exceed the number of Warrant Shares then underlying this Warrant),

(iii) shall have an issuance date, as indicated on the face of such new Warrant which is the same as the Issuance Date, and (iv) shall have the same rights and conditions as this Warrant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. <u>NOTICES</u>. Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice shall be given in accordance with Section 5.4 of the Securities Purchase Agreement. The Company shall provide the Holder with prompt written notice of all actions taken pursuant to this Warrant, including in reasonable detail a description of such action and the reason therefor. Without limiting the generality of the foregoing, the Company will give written notice to the Holder (i) immediately upon any adjustment of the Exercise Price, setting forth in reasonable detail, and certifying, the calculation of such adjustment and (ii) at least fifteen

(15) days prior to the date on which the Company closes its books or takes a record (A) with respect to any dividend or distribution upon the Common Shares, (B) with respect to any grants, issuances or sales of any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property to holders of Common Shares or (C) for determining rights to vote with respect to any Fundamental Transaction, dissolution or liquidation; provided in each case that such information shall be made known to the public prior to or in conjunction with such notice being provided to the Holder. It is expressly understood and agreed that the time of exercise specified by the Holder in each Exercise Notice shall be definitive and may not be disputed or challenged by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. <u>AMENDMENT AND WAIVER</u>. Except as otherwise provided herein, the provisions of this Warrant may be amended or waived and the Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained the written consent of the Holder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. <u>GOVERNING LAW; JURISDICTION; JURY TRIAL</u>. This Warrant shall be

governed by and construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation and performance of this Warrant shall be governed by, the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. The Company hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. The Company hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to the Company at the address set forth in Section 9(f) of the Securities Purchase Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Nothing contained herein shall be deemed or operate to preclude the Holder from bringing suit or taking other legal action against the Company in any other jurisdiction to collect on the Company's obligations to the Holder, to realize on any collateral or any other security for such obligations, or to enforce a judgment or other court ruling in favor of the Holder. **THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND** **AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS WARRANT OR ANY TRANSACTION CONTEMPLATED HEREBY.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. <u>CONSTRUCTION; HEADINGS</u>. This Warrant shall be deemed to be jointly drafted by the Company and all the Buyers and shall not be construed against any Person as the drafter hereof. The headings of this Warrant are for convenience of reference and shall not form part of, or affect the interpretation of, this Warrant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. <u>DISPUTE RESOLUTION</u>. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares, the Company shall submit the disputed determinations or arithmetic calculations via facsimile or electronic mail within two (2) Business Days of receipt of the Exercise Notice giving rise to such dispute, as the case may be, to the Holder. If the Holder and the Company are unable to agree upon such determination or calculation of the Exercise Price or the Warrant Shares within three (3) Business Days of such disputed determination or arithmetic calculation being submitted to the Holder, then the Company shall, within two (2) Business Days submit via facsimile or electronic mail (a) the disputed determination of the Exercise Price to an independent, reputable investment bank selected by the Company and approved by the Holder or (b) the disputed arithmetic calculation of the Warrant Shares to the Company's independent, outside accountant. The Company shall cause at its expense the investment bank or the accountant, as the case may be, to perform the determinations or calculations and notify the Company and the Holder of the results no later than ten (10) Business Days from the time it receives the disputed determinations or calculations. Such investment bank's or accountant's determination or calculation, as the case may be, shall be binding upon all parties absent demonstrable error.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. <u>REMEDIES,</u> <u>OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE</u> 

<u>RELIEF</u>. The remedies provided in this Warrant shall be cumulative and in addition to all other remedies available under this Warrant and the other Transaction Documents, at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the right of the Holder to pursue actual damages for any failure by the Company to comply with the terms of this Warrant. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such breach or threatened breach, the holder of this Warrant shall be entitled, in addition to all other available remedies, to an injunction restraining any breach, without the necessity of showing economic loss and without any bond or other security being required.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14. <u>TRANSFER</u>. This Warrant and the Warrant Shares may be offered for sale, sold, transferred, pledged or assigned without the consent of the Company, except as may otherwise be required by Section 2(f) of the Securities Purchase Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15. <u>SEVERABILITY</u>. If any provision of this Warrant is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect the validity of the remaining provisions of this Warrant so long as this Warrant as so modified continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16. <u>DISCLOSURE</u>. Upon receipt or delivery by the Company of any notice in accordance with the terms of this Warrant, unless the Company has in good faith determined that the matters relating to such notice do not constitute material, nonpublic information relating to the Company or its Subsidiaries (as defined in the Securities Purchase Agreement), the Company shall contemporaneously with any such receipt or delivery publicly disclose such material, nonpublic information on Form 8-K, with OTC Markets or otherwise. In the event that the Company believes that a notice contains material, nonpublic information relating to the Company or its Subsidiaries, the Company so shall indicate to the Holder contemporaneously with delivery of such notice, and in the absence of any such indication, the Holder shall be allowed to presume that all matters relating to such notice do not constitute material, nonpublic information relating to the Company or its Subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17. <u>CERTAIN DEFINITIONS</u>. For purposes of this Warrant, the following terms shall have the following meanings:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) "**1933 Act**" means the Securities Act of 1933, as amended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) "**Affiliate**" shall have the meaning ascribed to such term
in Rule 405 of the 1933 Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) "**Attribution Parties**" means, collectively, the following Persons: (i) any investment vehicle, including, any funds, feeder funds or managed accounts, currently, or from time to time after the Issuance Date, directly or indirectly managed or advised by the Holder's investment manager or any of its Affiliates or principals, (ii) any direct or indirect Affiliates of the Holder or any of the foregoing, (iii) any Person acting or who could be deemed to be acting as a Group together with the Holder or any of the foregoing and (iv) any other Persons whose beneficial ownership of the Common Shares would or could be aggregated with the Holder's and the other Attribution Parties for purposes of Section 13(d) of the 1934 Act. For clarity, the purpose of the foregoing is to subject collectively the Holder and all other Attribution Parties to the Maximum Percentage.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) "**Bloomberg**" means Bloomberg Financial Markets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) "**Business Day**" means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law to remain closed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) "**Closing Bid Price**" and "**Closing Sale Price**" means, for any security as of any date, the last closing bid price and last closing trade price, respectively, for such security on the Principal Market, as reported by Bloomberg, or, if the Principal Market begins to operate on an extended hours basis and does not designate the closing bid price or the closing trade price, as the case may be, then the last bid price or the last trade price, respectively, of such security prior to 4:00:00 p.m., New York time, as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such security, the last closing bid price or last trade price, respectively, of such security on the principal securities exchange or trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing bid price or last trade price, respectively, of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg, or, if no closing bid price or last trade price, respectively, is reported for such security by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any market makers for such security as reported on the Pink Open Market. If the Closing Bid Price or the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Bid Price or the Closing Sale Price, as the case may be, of such security on such date shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute shall be resolved pursuant to Section 12. All such determinations to be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification or other similar transaction during the applicable calculation period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) "**Convertible Securities**" means any stock or securities (other than Options) directly or indirectly convertible into or exercisable or exchangeable for Common Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Intentionally omitted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) "**Eligible Market**" means the Principal Market, the NYSE American, The Nasdaq Global Select Market, The Nasdaq Global Market, The New York Stock Exchange, Inc., the OTC Pink, OTC QB or the OTC QX operated by OTC Markets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) "**Fundamental Transaction**" means (A) that the Company shall, directly or indirectly, including through Subsidiaries, Affiliates or otherwise, in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company is the surviving corporation) another Subject Entity, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of the Company or any of its "significant subsidiaries" (as defined in Rule 1-02 of Regulation S-X) to one or more Subject Entities, or (iii) make, or allow one or more Subject Entities to make, or allow the Company to be subject to or have its Common Shares be subject to or party to one or more Subject Entities making, a purchase, tender or exchange offer that is accepted by the holders of more than either (x) 50% of the outstanding Common Shares, (y) 50% of the outstanding Common Shares calculated as if any Common Shares held by all Subject Entities making or party to, or Affiliated with any Subject Entities making or party to, such purchase, tender or exchange offer were not outstanding; or (z) such number of Common Shares such that all Subject Entities making or party to, or Affiliated with any Subject Entity making or party to, such purchase, tender or exchange offer, become collectively the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of more than 50% of the outstanding Common Shares, or (iv) consummate a stock purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with one or more Subject Entities whereby all such Subject Entities, individually or in the aggregate, acquire, either (x) more than 50% of the outstanding Common Shares, (y) more than 50% of the outstanding Common Shares calculated as if any Common Shares held by all the Subject Entities making or party to, or Affiliated with any Subject Entity making or party to, such stock purchase agreement or other business combination were not outstanding; or (z) such number of Common Shares such that the Subject Entities become collectively the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of more than 50% of the outstanding Common Shares, or (v) reorganize, recapitalize or reclassify its Common Shares, (B) that the Company shall, directly or indirectly, including through Subsidiaries, Affiliates or otherwise, in one or more related transactions, allow any Subject Entity individually or the Subject Entities in the aggregate to be or become the "beneficial owner" (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, whether through acquisition, purchase, assignment, conveyance, tender, tender offer, exchange, reduction in outstanding Common Shares, merger, consolidation, business combination, reorganization, recapitalization, spin-off, scheme of arrangement, reorganization, recapitalization or reclassification or otherwise in any manner whatsoever, of either (x) more than 50% of the aggregate ordinary voting power represented by issued and outstanding Common Shares, (y) more than 50% of the aggregate ordinary voting power represented by issued and outstanding Common Shares not held by all such Subject Entities as of the Subscription Date calculated as if any Common Shares held by all such Subject Entities were not outstanding, or (z) a percentage of the aggregate ordinary voting power represented by issued and outstanding Common Shares or other equity securities of the Company sufficient to allow such Subject Entities to effect a statutory short form merger or other transaction requiring other shareholders of the Company to surrender their Common Shares without approval of the shareholders of the Company or (C) directly or indirectly, including through Subsidiaries, Affiliates or otherwise, in one or more related transactions, the issuance of or the entering into any other instrument or transaction structured in a manner to circumvent, or that circumvents, the intent of this definition in which case this definition shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this definition to the extent necessary to correct this definition or any portion of this definition which may be defective or inconsistent with the intended treatment of such instrument or transaction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) "**Group**" means a "group" as that term is used in Section 13(d) of the 1934 Act and as defined in Rule 13d-5 thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) "**Options**" means any rights, warrants or options to subscribe for or purchase Common Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) "**Common Shares**" means (i) the Company's Common
Shares, par value

$0.0001 per share, and (ii) any share capital into which such Common Shares shall have been changed or any share capital resulting from a reclassification, reorganization or reclassification of such Common Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) "**Parent Entity**" of a Person means an entity that, directly or indirectly, controls the applicable Person, including such entity whose common capital or equivalent equity security is quoted or listed on an Eligible Market (or, if so elected by the Required Holders, any other market, exchange or quotation system), or, if there is more than one such Person or such entity, the Person or such entity designated by the Required Holders or in the absence of such designation, such Person or entity with the largest public market capitalization as of the date of consummation of the Fundamental Transaction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) "**Person**" means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity and a government or any department or agency thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) "**Pre-funded Warrants**" shall have the meaning ascribed to such term in the Securities Purchase Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) "**Principal Market**" means The Nasdaq Capital Market.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r) "**Required Holders**" means the holders of the SPA Warrants representing at least a majority of the Common Shares underlying the SPA Warrants then outstanding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s) "**Standard Settlement Period**" means the standard settlement period, expressed in a number of Trading Days, on the Company's primary Eligible Market with respect to the Common Shares as in effect on the date of delivery of the applicable Exercise Notice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t) "**Subject Entity**" means any Person, Persons or Group or any Affiliate or associate of any such Person, Persons or Group.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(u) "**Successor Entity**" means one or more Person or Persons (or, if so elected by the Holder, the Company or Parent Entity) formed by, resulting from or surviving any Fundamental Transaction or one or more Person or Persons (or, if so elected by the Holder, the Company or the Parent Entity) with which such Fundamental Transaction shall have been entered into.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) "**Trading Day**" means any day on which the Common Shares are traded on the Principal Market, or, if the Principal Market is not the principal trading market for the Common Shares on such day, then on the principal securities exchange or securities market on which the Common Shares are then traded.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(w) "**Weighted Average Price**" means, for any security as of any date, the dollar volume-weighted average price for such security on the Principal Market during the period beginning at 9:30:01 a.m., New York time (or such other time as the Principal Market publicly announces is the official open of trading), and ending at 4:00:00 p.m., New York time (or such other time as the Principal Market publicly announces is the official close of trading), as reported by Bloomberg through its "Volume at Price" function or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic bulletin board for such security during the period beginning at 9:30:01 a.m., New York time (or such other time as such market publicly announces is the official open of trading), and ending at 4:00:00 p.m., New York time (or such other time as such market publicly announces is the official close of trading), as reported by Bloomberg, or, if no dollar volume-weighted average price is reported for such security by Bloomberg for such hours, the average of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as reported on the Pink Open Market. If the Weighted Average Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Weighted Average Price of such security on such date shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute shall be resolved pursuant to Section 12 with the term "Weighted Average Price" being substituted for the term "Exercise Price." All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification or other similar transaction during the applicable calculation period.

**[Signature Page Follows]**

**IN WITNESS WHEREOF**, the Company has caused this Warrant to Purchase Common Shares to be duly executed as of the Issuance Date set out above.

**FAVO CAPITAL, INC.**

By:

Name:

Title:

## Exhibit 4.3

**FAVO CAPITAL, INC.**

**a Nevada Corporation**

**14.0% ORIGINAL ISSUE SECURED NOTE**

&nbsp;&nbsp; THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE SECURITIES LAWS OF ANY STATE. THESE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE TRANSFERRED OR SOLD IN THE ABSENCE OF AN EFFECTIVE REGISTRATION OR OTHER COMPLIANCE UNDER THE ACT OR THE LAWS OF THE APPLICABLE STATE OR A "NO ACTION" OR INTERPRETIVE LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER, AND ITS COUNSEL, TO THE EFFECT THAT THE SALE OR<br> TRANSFER IS EXEMPT FROM REGISTRATION UNDER THE ACT AND SUCH STATE STATUTES.<br>

I

**Annual Interest:** 14.0%

**Payable:** Monthly (1.166667% per month)

**Debenture No.:008**

**USD** **Amount:** $3,000,000

**Issue** **bate:** June 9, 2021

**Maturity** **Date:** June 9, 2023

**(24** **months From Issue Date)**

**Debenture 008 will supersede Debentures 002, 003, 004, 005, 007 totaling $2,700,000 plus an additional investment of $300,000**

FAVO CAPITAL INC., a corporation duly organized and existing under the laws of the State of Nevada (the "Company"1), for value received, hereby promises to pay to LIRO HOLDINGS, LLC (the "Holder"), upon presentation and surrender of this Original Issue Secured Note (the "Note") at the principal office of the Company, the Principal Amount of this Note, in the lawful currency of the United States of America at the end of the twenty-four (24) month term. The Company shall pay the Holder of the Note annual interest of fourteen percent (14.0%) of the Face Amount (the "Face Amount"), paid monthly.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1. <u>General.</u>** This Note is designated as the Company's Original Issue Secured Note in the aggregate Face Amount set forth above and to be issued and dated on the date set forth above, and to be due and payable in a single installment on the date that is twenty-four (24) months from the date hereof (the "Maturity Date"). Initially, the Company will act as its own paying agent, registrar, and conversion agent with respect to the Notes. The Company may appoint a substitute paying agent, registrar, or redemption agent upon which notice of such will be provided to the Holder.

FAVO Capital, Inc. -14.0%Original Issue Secured Note

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.** **<u>Interest.</u>** Interest on Face Amount shall be simple annual interest at a rate of fourteen percent (14.0%), payable in equal monthly installments of one percent (1 .166667%), payable every 30 days from the date of this Note (the "Interest"). The Company shall remit the payment of the Interest directly to the Holder via corporate check, bank check, ACH or wire transfer to the account and address directed by the Purchaser. The Company will pay interest payments within five (5) business days from the first of the month. The Company will calculate interest using the "Bank Method" of a 360-day year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.** **<u>Maturity.</u>** In twenty-four (24) months from Issuance, the Principal and any accrued interest of the Note may be paid back in the lawful currency of the United States of America.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.** **<u>Use</u> <u>of Proceeds.</u>** All proceeds received by the Company from the purchaser of the Notes shall be deployed by the Company for use in its short-term trade finance business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.** **<u>Security.</u>** Each Note will be secured by the Company's receivables or its Right-To-Receive (RTR) in its short-term trade finance business. Each Note is a direct obligation of the Company and ranks *pari passu* in right of payment with all other Notes now or hereafter issued in accordance with the terms set forth herein. All payments on the Notes shall be made *pro rata* to the Holders thereof based upon the principal amount of each Note then outstanding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.** **<u>Events of Default.</u>** The occurrence and continuation of any of the following events shall constitute an Event of Default under this Agreement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**a.** Nonpayment. The failure of the Borrower to pay, when due, any or all of the Principal Amount on the Maturity pate or otherwise, or any other obligations of the Company under this Agreement, which if capable of cure, shall be cured within thirty (30) days or for such greater period, if the default by its nature cannot be cured within thirty (30) days and the Company shall have diligently commenced the curing of such default and is diligently pursuing the same to completion; If Borrower fails to cure said default within thirty (30) days of receipt of notice regarding said default, Lender may, at its sole discretion, exercise any rights and remedies available to Lender under all applicable state and federal laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.** **<u>Acceleration.</u>** If any of the following events of default occur, this Note and any other obligations of the Borrowed to the lender shall become due immediately, without demand or notice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **a.** The dissolution of the Borrower;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**b.** The filing of bankruptcy proceedings involving the Borrower as a debtor;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**c.** The application for the appointment of a receiver for the Borrower;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**d.** The making of a general assignment for the benefit of the Borrower's creditors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**e.** The insolvency of the Borrower;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**f.** Failure of the Borrower to fulfill any obligations under this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.** **<u>Prepayment.</u>** The Company may, at any time from the date hereof, prepay the Note in whole or part after giving ten (10) days' notice to the Holder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.** **<u>Transfer or Exchange.</u>** The Holder may, subject to compliance with the registration requirements of the 1933 Act, or exemptions therefrom, transfer or assign this Note, any interest herein or any part hereof in minimum amount or Fifty Percent (50%) of the note or the entire outstanding balance to an "accredited investor" as defined in the 1933 Act that will be acquiring the Note or interest herein for its account for the purpose of investment and not with a view to or for sale in connection with any distribution hereof and, each assignee, transferee (which may include any affiliate of the Holder) shall have the right to transfer or assign its interest subject to the same limitations. Each such assignee or transferee shall have all of the rights of

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• FAVO Capital, Inc. -14.0% Original Issue Secured Note

the Holder under this Note. The Company may condition registrations of transfers on the receipt of (a) satisfactory evidence of compliance with the 1933 Act, and (b) a certificate from the assignee, transferee of note in a form acceptable to the Company that contains representations and warranties similar to those of the Holder contained in the Subscription Agreement, and IRS Form W-9 or an equivalent certification under penalty of perjury in compliance with the Internal Revenue Code of 1986, as amended from time to time. The Borrower can charge the Holder reasonable attorney fees in the event of such transfer.

**THIS SECURITY HAS** **NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES AND EXCHANGE COMMISSION, OR THE BLUE SKY LAWS OF ANY STATE AND MAY BE OFFERED AND SOLD ONLY IF REGISTERED AND QUALIFIED PURSUANT TO THE RELEVANT PROVISIONS OF THE FEDERAL AND STATE SECURITIES OR BLUE SKY LAWS OR IF AN EXEMPTION FROM SUCH REGISTRATION OR QUALIFICATION IS APPLICABLE.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10. <u>Compliance with Securities Laws.</u>** The Holder acknowledges that this Note are being acquired solely for the Holder's own account and not as a nominee for any other party, and for investment, and that the Holder will not offer, sell or otherwise dispose of this Note, or the Conversion Shares to be issued upon redemption hereof except pursuant to an effective registration statement, or an exemption from registration, under the Securities Act of 1933, as amended (the "Securities Act") and any applicable state securities laws.

The Holder acknowledges that: (i) it has fully read this Agreement and duly represents that it understands and agrees to the terms and conditions outlined herein; (ii) Regulation D of the Securities Act of 1933, as amended (the "Securities Act"), and as further outlined in the Subscription Agreement; (iii) the Holder, in signing this Agreement, does not create a conflict of interest that has not been previously disclosed and accepted by the Company; (iv) the Holder has read the Company's financial statements, disclosure documents and corporate filings previously provided and as publicly available on the Securities and Exchange Commission's EDGAR system; (v) the Holder understands the stock while quoted on the OTC Pink Markets and does not offer much liquidity at this time and is volatile; (vi) the Holder is duly authorized in its capacity and as represented herein to enter into this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11. <u>Investor Status.</u>** The Purchaser represents and warrants that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**a.** If the Purchaser is not a United States person (as defined by Section 7701(a)(30) of the Internal Revenue Code of 1986, as amended, the "Code"), such Purchaser hereby represents that it has satisfied itself as to the full observance of the laws of its jurisdiction in connection with any invitation to subscribe for the Notes or any use of this Agreement, including (i) the legal requirements within its jurisdiction for the purchase of the Notes, (ii) any foreign exchange restrictions applicable to such purchase, (iii) any governmental or other consents that may need to be obtained, and (iv) the income tax and other tax consequences, if any, that may be relevant to the purchase, holding, redemption, sale, or transfer of the Notes. Such Purchaser's subscription and payment for and continued beneficial ownership of the Notes, will not violate any applicable securities or other laws of the Purchaser's jurisdiction; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**b.** If the Purchaser is a United States person, then the Purchaser is an accredited investor as defined in Rule 501(a) of Regulation D promulgated under the Securities Act. The Purchaser acknowledges they fully understand the definition of being an accredited investor as defined in the Rule above. They also acknowledge the Company is under no obligation to verify this status and will take this statement as such understanding that the Purchaser is an accredited investor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**c.** The Purchaser understands that the purchase of the Notes involves substantial risk. The Purchaser

(a) has experience as an investor in securities of companies and acknowledges that the Purchaser is

I FAVO Capital, Inc. -14.0% Original Issue Secured Note

I

able to fend for itself, can bear the economic risk of the Purchaser's investment in the Notes and has such knowledge and experience in financial or business matters that the Purchaser is capable of evaluating the merits and risks of this investment and protecting its own interests in connection with this investment, and/or (b) has a pre-existing personal or business relationship with the Company and certain of its officers, directors or controlling persons of a nature and duration that enables the Purchaser to be aware of the character, business acumen and financial circumstances of such persons.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**d.** The Purchaser has had an opportunity to discuss, ask questions of, and receive answers from, the Company's officers and representatives concerning the Company's business, management, financial affairs and the terms and conditions of the offering of the Notes with the Company's management. The Purchaser acknowledges it has not requested that the Company deliver a private placement or similar memorandum that typically contains disclosures about the Company and its business as required under federal and state securities laws applicable to certain public and private offerings including, but not limited to, disclosures about material risks faced by the Company and its business that would customarily come under the heading "Risk Factors" or detailed and comparative financial disclosures summarizing the Company's results of operations, financial and accounting policies and liquidity that would customarily come under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**e.** The Company's Officers and its Manager are offering the Interests on a "best efforts" basis, and no compensation or other remuneration will be paid by the Company to such persons in connection with this Note. As of the date of this Note, the Company has not engaged any broker/dealer or placement agent in connection with the Note, but it may, in its sole discretion, choose to do so, and, if any such persons are retained in connection with this Note, they may be compensated in compliance with applicable securities laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**f.** No General Solicitation. Neither the Company, nor any of its officers, employees, agents, directors, stockholders or partners, has engaged the services of a broker, investment banker or finder to contact any potential investor nor has the Company or any of the Company's officers, employees, agents, directors, stockholders or partners, agreed to pay any commission, fee or other remuneration to any third party to solicit or contact any potential investor. The Purchaser acknowledges that it is not acquiring the Notes pursuant to any general solicitation and that the Purchaser did not (i) receive or review any advertisement, article, notice or other communication published in a newspaper or magazine or similar media or broadcast over television or radio, whether closed circuit, or generally available, with respect to the Notes; or (ii) attend any seminar, meeting or industry investor conference whose attendees were invited by any general solicitation or general advertising regarding the Note(s).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**12. <u>No Public Market</u>.** The Purchaser understands that no public market now exists for these Notes and that the Company has made no assurances that a public market will ever exist for any such Notes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**13. <u>Notices.</u>** Any and all notices, requests, documents or other communications or deliveries required or permitted to be given or delivered hereunder shall be delivered in accordance with the notice provisions of the Subscription Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**14. <u>Confidentiality.</u>** Each Purchaser hereto agrees that, except with the prior written permission of the Company, it shall at all times hold in confidence and trust and not use or disclose any confidential information of the Company provided to or learned by such Purchaser in connection with the Purchaser's rights under the Agreement. Notwithstanding the foregoing, each Purchaser may disclose any confidential information of the Company provided to or learned by such Purchaser in connection with such rights to the minimum extent necessary (i) to evaluate or monitor such Purchaser's investment in the Company; (ii) as

required by any court or other governmental body, provided that such Purchaser provides the Company with prompt notice of such court order or requirement to the Company to enable the Company to seek a protective order or otherwise to prevent or restrict such disclosure; (iii) to legal counsel of such Purchaser; (iv) in connection with the enforcement of this Agreement or rights under this Agreement; or (v) to comply with applicable law. The provisions of this Section 14 shall be in addition to, and not in substitution for, the provisions of any separate nondisclosure agreement executed by the parties hereto with respect to the transactions contemplated hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**15. <u>Miscellafeous.</u>** None of the provisions of this Note may be waived, changed, or terminated orally or otherwise , except by a writing duly executed by the Company and the Holder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**16. <u>'Governing Law.</u>** This Note shall be governed by and construed in accordance with the laws of the State of <u>Nevada.</u> In any action suit or proceeding in respect or arising out of this Note, the Holder waives, the fullest extent permitted by applicable law, any right to a trial by jury as well as any claim for consequential, punitive or special damages.

**Remainder of Page Intentionally Left Blank**

**Favo Capital, Inc. - Original Issue Secured Note Agreement**

**IN WITNESS WHEREOF, the Company has caused this Fourteen Percent (14.0%) Note to be duly executed by the signature of its authorized officer, as of the 9th Day of June, 2021**

---

| | |
|:---|:---|
| **HOLDER:.** | **ISSUER:** |
| **LIRO HOLDINGS, LLC** | **FAVO CAPITAL, INC.** |
| **By: /s/ Rocca Trotta** | **By: /s/ Vincent Napolitano** |
| **Rocca Trotta, Managing Member** | **Vincent Napolitano, CEO** |
| 3 Aerial Way | 1025 Old Country Road |
| Syosset, NY 11791 | Suite 311 |
|  | Westbury, NY 11590 |
| Phone: 516 - XXX-XXXX |  |
| Email: Txxxx@xxxx.com | Phone: 1.833.favogrp |
|  | Email: vXXXXXX@xxxx.com |
|  | info@xxxx.com |

---

## Exhibit 4.5

**PROMISSORY NOTE**

US $4,700,000

Las Vegas, Nevada

June 1, 2023

For good and valuable consideration, **Favo Capital, Inc.**, a Nevada corporation ("<u>Maker</u>"), hereby makes and delivers this Promissory Note (this "<u>Note</u>") in favor of FAVO Holdings, LLC, owned 65% by **Vincent Napolitano and** 35% by **Shaun Quin**, or their assigns ("<u>Holder</u>"), and hereby agrees as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.** **<u>Principal Obligation and Interest</u>.** For value received**,** Maker promises to pay to Holder at such other place as Holder may designate in writing, in currently available funds of the United States, the principal amount of **Four Million Seven Hundred Thousand United States Dollars (USD $4,700,000)**. Maker's obligation under this Note shall accrue simple interest separately on three payments due, which includes **One Percent (1.0%)** from the date hereof until the initial payment of $1,500,000 is due on May 31, 2024, **Three Percent (3.0%)** from June 1, 2024 until the second payment of $1,600,000 is due on May 31, 2025, and **Six Percent (6.0%)** from June 1, 2025 until the final payment of $1,600,000 is due on May 31, 2026 . Interest shall be computed on the basis of a 365-day year or 366-day year, as applicable, and actual days lapsed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Payment Terms</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Principal of $1,500,00 and its accrued interest paid quarterly shall be due and payable by May 31, 2024, principal of $1,600,00 and its accrued interest paid quarterly shall be due and payable by May 31, 2025, and principal of $1,600,00 and its accrued interest paid quarterly shall be due and payable by May 31, 2026 (the "Maturity Dates").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. At any time before the Maturity Date, this Note may be paid or redeemed in whole, or in part on one or more occasions, at the sole option of the Maker.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. All payments shall be applied first to interest, then to principal and shall be credited to the Maker's account on the date that such payment is physically received by the Holder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.** **<u>Representations and Warranties of Maker</u>.** Maker hereby represents and warrants the following to Holder:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. The execution of this Note and Maker's compliance with the terms, conditions and provisions hereof does not conflict with or violate any provision of any agreement, contract, lease, deed of trust, indenture, or instrument to which Maker is a party or by which Maker is bound.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.** **<u>Representations and Covenants of the Holder</u>.** The Maker has issued this Note in reliance upon the following representations and covenants of the Holder:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. <u>Investment Purpose</u>. This Note is acquired for investment and not with a view to the sale or distribution of any part thereof, and the Holder has no present intention of selling or engaging in any public distribution of the same except pursuant to a registration or exemption.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. <u>Private Issue</u>. The Holder understands (i) that this Note is not registered under the Securities Act of 1933 (the "1933 Act") or qualified under applicable state securities laws, and

(ii) that the Maker is relying on an exemption from registration predicated on the representations set forth in this Section 4.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. <u>Financial Risk</u>. The Holder has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of its investment, and has the ability to bear the economic risks of its investment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.**  **<u>Defaults</u>.** The following events shall be defaults under this Note:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Maker's failure to remit any payment under this Note on before the date due, if such failure is not cured in full within ten (10) days of written notice of default;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Maker's failure to perform or breach of any non-monetary obligation or covenant set forth in this Note or in the Agreement if such failure is not cured in full within fifteen

(15) days following delivery of written notice thereof from Holder to Maker;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Any default of the Maker's debt obligations currently existing or hereinafter

acquired;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. The entry of a decree or order by a court having jurisdiction in the premises adjudging the Maker bankrupt or insolvent, or approving as properly filed a petition seeking rehabilitation, reorganization, arrangement, adjustment or composition of or in respect of the Maker under the federal Bankruptcy code or any other applicable federal or state law, or appointing a receiver, liquidator, assignee or trustee of the Maker, or any substantial part if its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order un-stayed and in effect for a period of twenty (20) days; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. Maker's institution of proceedings to be adjudicated a bankrupt or insolvent, or the consent by him to the institution of bankruptcy or insolvency proceedings against him, or filing of a petition or answer or consent seeking rehabilitation or reorganization or relief under the federal Bankruptcy Code or any other applicable federal or state law, or its consent to the filing of any such petition or to the appointment of a receiver, liquidator, assignee or trustee, of any substantial part of his property, or his making of an assignment for the benefit of creditors or the admission by him in writing of his inability to pay his debts generally as they become due, or the taking of corporate action by the Maker in furtherance of any such action.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.** **<u>Rights and Remedies of Holder</u>**. Upon the occurrence of an event of default by Maker under this Note, then, in addition to all other rights and remedies at law or in equity, Holder may exercise any one or more of the following rights and remedies:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Any amount of principal or interest on this Note which is not paid when due shall bear interest at the rate of fifteen (15%) per annum from the due date thereof until the same is paid.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Accelerate the time for payment of all amounts payable under this Note by written notice thereof to Maker, whereupon all such amounts shall be immediately due and payable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Pursue any other rights or remedies available to Holder at law or in equity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.** **<u>Representation of Counsel</u>.** Maker acknowledges that he has consulted with or has had the opportunity to consult with his legal counsel prior to executing this Note. This Note has been freely negotiated by Maker and Holder and any rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.** **<u>Choice of Laws; Actions</u>.** This Note shall be constructed and construed in accordance with the internal substantive laws of the State of Nevada, without regard to the choice of law principles of said State. Maker acknowledges that this Note has been negotiated in Clark County, Nevada. Accordingly, the exclusive venue of any action, suit, counterclaim or cross claim arising under, out of, or in connection with this Note shall be the state or federal courts in Clark County, Nevada. Maker hereby consents to the personal jurisdiction of any court of competent subject matter jurisdiction sitting in Clark County, Nevada.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.** **<u>Usury Savings Clause.</u>** Maker expressly agrees and acknowledges that Maker and Holder intend and agree that this Note shall not be subject to the usury laws of any state other than the State of Nevada. Notwithstanding anything contained in this Note to the contrary, if collection from Maker of interest at the rate set forth herein would be contrary to applicable laws, then the applicable interest rate upon default shall be the highest interest rate that may be collected from Maker under applicable laws at such time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.** **<u>Costs of Collection</u>.** Should the indebtedness represented by this Note, or any part hereof, be collected at law, in equity, or in any bankruptcy, receivership or other court proceeding, or this Note be placed in the hands of any attorney for collection after default, Maker agrees to pay, in addition to the principal and interest due hereon, all reasonable attorneys' fees, plus all other costs and expenses of collection and enforcement, including any fees incurred in connection with such proceedings.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. <u>Miscellaneous</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. This Note shall be binding upon Maker and shall inure to the benefit of Holder and its successors, assigns, heirs, and legal representatives.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Any failure or delay by Holder to insist upon the strict performance of any term, condition, covenant or agreement of this Note, or to exercise any right, power or remedy hereunder shall not constitute a waiver of any such term, condition, covenant, agreement, right, power or remedy.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Any provision of this Note that is unenforceable shall be severed from this Note to the extent reasonably possible without invalidating or affecting the intent, validity or enforceability of any other provision of this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. This Note may not be modified or amended in any respect except in a writing executed by the party to be charged.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. Time is of the essence.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**12.** **<u>Notices</u>.** All notices required to be given under this Note shall be given to each of the parties at such address as a party may designate by written notice to the other party.

Notices may be transmitted by facsimile, certified mail, private delivery, or any other commercially reasonable means, and shall be deemed given upon receipt by the Party to whom they are addressed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**13.** **<u>Waiver of Certain Formalities</u>.** All parties to this Note hereby waive presentment, dishonor, notice of dishonor and protest. All parties hereto consent to, and Holder is hereby expressly authorized to make, without notice, any and all renewals, extensions, modifications or waivers of the time for or the terms of payment of any sum or sums due hereunder, or under any documents or instruments relating to or securing this Note, or of the performance of any covenants, conditions or agreements hereof. Any such action taken by Holder shall not discharge the liability of any party to this Note.

**IN WITNESS WHEREOF,** this Note has been executed effective the date and place first written above.

By: /s/ Vincent Napolitano

## Exhibit 4.6

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. IT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE BORROWER THAT SUCH REGISTRATION IS NOT REQUIRED.

**PROMISSORY NOTE**

Promissory Note No. [\*]

Principal Amount: $100,000<br> Date of Issuance: September [\*], 2025

Westbury, New York

FOR VALUE RECEIVED, FAVO CAPITAL, INC., a Nevada corporation with its principal office at 4300 N. University Drive, Suite D-105, Lauderhill, Florida 33351 (the "Borrower"), hereby promises to pay to STEWARDS INTERNATIONAL FUNDS PCC (on behalf of the STEWARDS PRIVATE CREDIT FUND), a limited company organized under the laws of Mauritius, with its principal office at 12th Floor, Nexteracom Tower, Tower 1, Ebene, Quatre Bornes, Mauritius 72201, or its registered assigns (the "Holder"), the principal sum of ONE HUNDRED THOUSAND U.S. DOLLARS ($100,000) (the "Principal Amount"), together with interest on the unpaid Principal Amount at a fixed rate of 8.00% per annum, calculated on a 365-day year basis, in accordance with the terms of the Loan Agreement dated September [\*], 2025 (the "Loan Agreement"), by and between the Borrower and the Holder.

Capitalized terms not defined herein shall have the meanings set forth in the Loan Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.** **Use of Proceeds.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The Borrower shall use the proceeds from the issuance of this Note solely for the purposes of (i) refinancing existing indebtedness, and (ii) funding the Company's general operational needs, including but not limited to working capital, payroll, and other ordinary course business expenses. The Borrower shall not apply such proceeds toward dividends, share repurchases, or any transaction outside the ordinary course without the prior written consent of the Holder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.** **Payments.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Interest Payments: Interest shall accrue on the Principal Amount at a fixed rate of 8.00% per annum from the Date of Issuance. The first interest payment shall be due on September 1, 2026, or the first Business Day thereafter, calculated as the pro-rated interest accrued on the Principal Amount invested from the Date of Issuance to the Closing Date. Subsequent interest payments shall be made quarterly on the first Business Day of each calendar quarter, commencing October 1, 2026, calculated as (8.00% × Principal Amount × days in period / 365).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Principal Payment: The Principal Amount, together with any accrued and unpaid interest, shall be payable in full on the Maturity Date, unless extended pursuant to Section 4.3 of the Loan Agreement or earlier redeemed as provided below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Payment Mechanics: All payments shall be made in U.S. dollars by wire transfer to an account designated by the Holder, free of any set-off, counterclaim, or withholding, except as required by law. Payments shall be applied first to accrued interest, then to the Principal Amount.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.** **Redemption.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Maturity Redemption: On the Maturity Date, the Borrower shall redeem this Note at the Principal Amount, plus any accrued and unpaid interest.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Early Redemption:

o By Holder Request: The Holder may request early redemption of the Principal Amount by providing sixty (60) Business Days' written notice to the Borrower, provided such request is made no earlier than two (2) years after the Closing Date and no later than twenty (20) Business Days before the Maturity Date, as per Section 4.2 of the Loan Agreement.

o Upon Event of Default: Upon an Event of Default (as defined in Article 8 of the Loan Agreement), the Holder may declare the Principal Amount and accrued interest immediately due and payable, subject to the terms of the Loan Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Extension of Maturity: The Borrower may extend the Maturity Date by up to six (6) calendar months, subject to Holder approval, with interest continuing at 8.00% per annum and an additional 1% of the Principal Amount per month payable in advance, as per Section 4.3 of the Loan Agreement.

* **Ranking.** This Note is an unsecured and unsubordinated
obligation of the Borrower, ranking:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ After claims of (i) secured creditors and (ii) creditors preferred by law (e.g., tax authorities).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Equally with other unsecured, unsubordinated creditors of the Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Prior to subordinated creditors (if any) and shareholders, including holders of the Borrower's common stock and Series A Preferred Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. **Transfer Restrictions**. This Note is a restricted security under the Securities Act of 1933, as amended (the "Securities Act"), and may not be sold, transferred, or assigned except to eligible investors through STEWARDS INTERNATIONAL FUNDS PCC (on behalf of the STEWARDS PRIVATE CREDIT FUND), with prior written consent of the Borrower, which shall not be unreasonably withheld, as per Section 9.1 of the Loan Agreement.

* **Events of Default**. An Event of Default under
this Note shall have the meaning set forth in Article 8 of the Loan Agreement, including but not limited to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Failure to pay principal or interest when due, continuing for fourteen (14) Business Days after written notice from the Holder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Breach of any covenant under Article 5 of the Loan Agreement, continuing for thirty (30) days after written notice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Insolvency, bankruptcy, or similar proceedings involving the Borrower or its subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Material litigation or adverse events materially impairing the Borrower's ability to perform.

* **Remedies**. Upon an Event of Default, the Holder
may, by written notice to the Borrower:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Declare the Principal Amount and accrued interest immediately due and payable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Pursue early redemption.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Exercise other rights under applicable law, including against the Borrower's subsidiaries, as per Section 8.2 of the Loan Agreement.

* **Governing Law**. This Note shall be governed
by and construed in accordance with the laws of the State of New York, without regard to conflict of law principles.

* **Notices**. All notices shall be in writing and
delivered to the addresses specified in the Loan Agreement.

* **Amendments**. Any amendment to this Note must
be in writing and signed by both the Borrower and the Holder, as per Section 10.3 of the Loan Agreement.

* **Assignment**. The Holder may assign this Note
with Borrower consent, except as permitted under Section 9.1 of the Loan Agreement. The Borrower may not assign this Note without Holder
consent.

IN WITNESS WHEREOF, the Borrower has executed this Promissory Note as of the Date of Issuance.

FAVO CAPITAL, INC.

By: <u>/s/ Shaun Quin</u><br> Name: Shaun Quin<br> Title: President

## Exhibit 4.7

**FORM OF WARRANT CERTIFICATE**

THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

**Warrant to Purchase Common Stock**

Warrant No.: [Insert Number]

Number of Shares: [Insert Number]

Issuance Date: [Insert Date]

Expiration Date: August 31, 2033

THIS CERTIFIES THAT, for value received, STEWARDS INTERNATIONAL FUNDS PCC (on behalf of the STEWARDS PRIVATE CREDIT FUND), or its registered assigns (the "Holder"), is entitled to purchase from FAVO CAPITAL, INC. (the "Company"), at any time after the Maturity Date of August 31, 2030 (or as extended) or a Liquidity Event, and no later than August 31, 2033, up to [Insert Number] shares of Common Stock, par value $0.0001 per share, at an exercise price of $0.76 per share, subject to adjustment as provided in the Warrant Agreement dated September 30, 2026 (the "Warrant Agreement").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Exercise. The Holder may exercise this Warrant by delivering a notice of exercise in the form attached hereto as Annex A, payment of the aggregate Exercise Price (via cash, cashless exercise if approved by the Company, or the Debt Conversion Option), and this certificate to the Company or its transfer agent, as provided in the Warrant Agreement

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Transfer. This Warrant is transferable only with the Company's consent and in compliance with the Warrant Agreement and applicable securities laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Governing Law. This Warrant is governed by the laws of the State of New York.

FAVO CAPITAL, INC.

By: ______________________________

Name: Shaun Quin

Title: President

## Exhibit 10.1

**MASTER ACQUISITION FINANCING AGREEMENT**

THIS MASTER ACQUISITION FINANCING AGREEMENT ("Agreement") dated for reference 31<sup>st</sup> May, 2023, is among FAVO Capital, Inc., a Nevada corporation (the "Company"), Forfront Capital, LLC (the "Investor"), Stewards Investment Capital Limited (the "Third-Party Valuator and Newly Appointed Advisory Board Members"), Vincent Napolitano and Shaun Quin (together the "Principals") of FAVO Group of Companies that include: Honeycomb Sub fund LLC, FAVO Human Resources LLC, FAVO Group LLC, FAVO Funding LLC, FAVO Funding CA LLC, FORE Funding LLC and FORE Funding CA LLC (the "FAVO Group").

WHEREAS, on or about May 18, 2023, the parties to this Agreement entered into a letter of intent (the "Letter of Intent") whereby the Investor has agreed to finance the acquisition by the Company of the FAVO Group; and the development of FAVO Group's business, and the Principals, as owners and representatives of the other owners of the FAVO Group, have agreed to transfer all of their respective ownership interests in FAVO Group to the Company; and

WHEREAS, the parties to this Agreement desire to enter into this Agreement to memorialize the terms and conditions of their agreement as outlined in the Letter of Intent and summarized above, with this Agreement superseding the Letter of Intent in its entirety;

FOR VALUABLE CONSIDERATION, the receipt and sufficiency of which are acknowledged, the parties agree that:

**INTERPRETATION**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The definitions in the recitals are part of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. In this Agreement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. "Acquisition Agreements" means the Membership Interest Purchase and Sale
Agreements by and among the Company, the Principals and the FAVO Group.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. "Closing" means 31<sup>st</sup> May 2023.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. "Financing" means capital raised from the Investor by the Company for
the acquisition the FAVO Group by the Company as Valued by the Third-party Valuators and Newly Appointed Advisory Board Members.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. "Fundraising" means future capital raise undertakings by the Investor to the Company as
part as its intent to increase its capital commitment to the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. "Principals' Interest" means the Principals' interests and the interests of owners they represent
in the FAVO Group, comprising all of the owners for 100% of the ownership interests of the companies within the FAVO Group.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f. "$" means United States dollars.

**TERMS AND CONDITIONS OF THE FINANCING AND ACQUISITIONS**

**The Financing**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. The Company will raise the Financing by selling 20 million of its $0.0001 par value
convertible preferred shares at $0.25 per share (the "Company Preferred Shares") to the Investor, as designated and approved
by the board of directors of the Company with the features of such Company Preferred Shares in substantially the same form as that attached
hereto as Exhibit "A." The Company's other series of preferred stock has been designated as Series C Preferred Stock,
and the features of that series is attached hereto as Exhibit "B."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. The Financing will come in three (3) tranches, as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) $2,500,000 on Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) $1,250,000 in 90 calendar days from Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) $1,250,000 in 180 calendar days from Closing.

**The Fundraising**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. In addition to the Financing, the Investor undertakes to raise and deploy additional
capital for the Company as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) $1,250,000 in additional syndication capital in 90 calendar days from Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) $1,250,000 in additional syndication capital in 180 calendar days from Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. Subject to the timely completion of the Financing, the Investor undertakes to
raise and deploy capital for the Company at the targeted rate of $2,500,000 per calendar quarter with 50% deployed in the Company's
debt note and 50% to be invested in additional syndication capital.

It is understood that the purpose of the capital raised through the debt note is to replace current investor debt, therefore reducing the overall interest expense on the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. The Investor will work closely with the Company to make introductions to its existing
client base to help raise additional capital for the Company in the form of Debt or Equity. This includes but is not limited to setting
up meetings both in the United States and abroad with private and institutional clients.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. As part of the Fundraising effort, the Third-Party Valuators and Newly Appointed
Advisory Board Members will provide financial analysis and guidance to the Company's underwriting and credit policies and will advise
on future potential business opportunities and any potential acquisitions, investment opportunities and new product opportunities. In
connection with any additional financing, the Company shall prepare all the offering materials for prospective investors of the Company.

**The Acquisition Agreements**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. Under separate Acquisition Agreements dated concurrently with this Agreement,
the Principals will transfer the Principals' Interest to the Company in the FAVO Group immediately after the Closing so that each company
of the FAVO Group becomes a wholly owned subsidiary of the Company as of the Closing date (hereinafter referred to as, the "Transfer").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. As consideration for the Transfer, the Company will pay the purchase price as
outlined below for the FAVO Group of an aggregate of approximately $37,000,000, which includes $14,200,000 in cash and

"Senior Secured Notes," along with the assumption of debt estimated at approximately $22,800,000 and the repayment of debt notes to FAVO Holdings and FAVO Group respectfully for a total of

$500,000. This valuation was determined by the independent third-party valuator, contracted by the Investor prior to being appointed to the advisory board. This valuation was presented to the parties to the Acquisition Agreements, and they have agreed to the terms of the sale in such agreements, as detailed below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ $4,500,000 in cash to the Principals of FAVO Group, LLC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ $500,000 Debt Notes to be repaid ($240,000 to the Principals and $260,000 to FAVO Group).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ $5,000,000 in shares of common stock in the Company at $0.25 per share to FAVO Holdings, LLC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ $4,700,000 in Senior Secured Notes with terms as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o $1,500,000 – maturity 12 months from Closing – 1.0% interest paid quarterly.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o $1,600,000 – maturity 24 months from closing – 3.0% interest paid quarterly.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o $1,600,000 – maturity 36 months at 6% interest – 6.0% interest paid quarterly.

**Governing the Consolidated Entities**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. The Principals will stay on as the sole members of the board of directors and executives
of the Company and will remain as part of the management team running the day-to-day operations of the FAVO Group, as subsidiaries of
the Company. Both will sign a 5-year agreement with the Company, to be determined by the parties, to remain with the Company. Total compensation
will remain the same as of the date of this Agreement, with all entities combined.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. The Company will appoint two principals of Stewards Investment Capital to join
the advisory board of the Company under a 3-year term. For their service as advisory board members, they will receive a combined:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ 15,000,000 shares of common stock of the Company. Notwithstanding anything to
the contrary in this Agreement, if the Investor fails to make any of the three tranche payments under the Financing, the shares will be
clawed back to the Company pro rata to the amount represented by the lack of payment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ $20,000.00 (twenty thousand) per month in remuneration as the advisory board members
starting July 1, 2023, and payable by the 15th of each month of the 3-year term. Notwithstanding anything to the contrary in this Agreement,
if the Investor fails to make any of the three tranche payments under the Financing, the remuneration will be terminated.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. FAVO Group consents to the Principals' transferring the Principals' Interest to the Company.

**Additional Covenants of the Parties**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14. The FAVO Group has already provided the Company and the Investor with the following:

- Management accounts for 2021 and 2022

- 2021 Tax Returns

- Direct Funding Report Sept 2021 to Oct 2022

- Syndication Reports

- Underwriting Guidelines

- Principal Background Checks

- Investor Reports

- All other supporting documentation requested by the Investor and the Third-Party valuator to complete their independent due-diligence and valuation of this transaction.

The Principals warrant and represent to the Company and the Investor and the Third-Party valuator, now newly appointed advisory board members of the Company that, based on their knowledge, the financial statements provided fairly present in all material respects the financial condition, results of operations and cash flows of the FAVO Group of, and for, the periods presented.

The FAVO Group agrees and covenants to provide within 30 days of Closing the following to the Company and the Investor:

- 2022 Tax Returns

- Providing Access to QuickBooks

- Providing Access to any additional financial working required.

- Access to Syndication Portals

- Any other reasonable Access to allow the parties to transact on a day-to-day basis

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15. The Company agrees to hire a PCAOB accounting firm by year end 2024 to audit the
financial statements of FAVO Group for the years ended December 31, 2023 and 2022. The Company further agrees to file a Registration Statement
with the Securities and Exchange Commission to provide liquidity to shareholders within 24 months from the date of Closing, such as a
Form 10 (General Form for Registration of Securities), Form S-1 (Registration Statement used for IPO's) or Follow-On Offering or
similar offering. Notwithstanding the foregoing, the Company cannot guarantee an orderly and liquid market.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16. The Company shall take all steps within its power, including increasing its public
float to at least 10% of the Company's issued and outstanding shares of common stock, to apply for an upgrade of its trading symbol
designation to the OTCQB tier of OTC Markets. The Company shall aim for but cannot guarantee a $2 million market value of the public float.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17. The Company shall continue to scale its platform and shall seek to effectuate the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Retain a full-time renewal salesperson.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Retain a full-time ISO outside sales representative.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Develop an In-House Customer Service and Collection Team

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Grow Fore Funding (Sales) Offices in Long Island and Florida

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Expand the mail campaign for inbound sales.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Higher quality funding paper

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Mostly 1st positions

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Merchants who call in as opposed to answering the phone have higher renewal rates
and better performance (less competition)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Seek to potentially outsource or develop a new business, a call center in Mauritius
or somewhere in the world with a cheaper cost of labor. We can possibly outsource other forms of data capturing and work to this business
to assist in the day-to-day administration.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Seek to create a marketing budget for industry publications and websites as well
as social media to increase brand awareness and market share.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Retain a Public Relations Firm

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Seek to grow the Syndication Portfolio as we ramp up Direct Funding

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Multiple other ideas to grow the platform like trade shows, SEO marketing etc.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Continue to develop an Insurance Umbrella product for all its business activities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18. Vincent Napolitano will execute his rights to convert 6,250,000 (six million two
hundred and fifty thousand) Series C Preferred Shares into 25,000,000 (twenty-five million) common shares of the

Company effective May 31, 2023 to be issued to FAVO Holdings, LLC. The remaining 18,750,000 (eighteen million seven hundred and fifty thousand) Series C Preferred Shares will remain, and the conversion rights will be amended with the state from 4-1 to 1-1of common shares of the Company. The balance of the Series C Preferred Shares will also retain their 25-1 voting rights as per the amendment. When and if the Board execute their conversion rights, this will be agreed to by all parties and distributed pro-rata.

**OTHER PROVISIONS**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19. Time is of the essence of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20. This Agreement shall be construed under and be governed by the laws of the State
of Nevada without regard to principles of conflict of laws. Any action, claim or proceeding brought by any party hereunder shall be commenced
exclusively in the courts of Nevada. The parties hereto each hereby irrevocably and unconditionally consent to the exclusive jurisdiction
and venue of such courts in any action, claim or proceeding brought under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21. Any notice that must be given or delivered under this agreement must be in writing
and delivered by hand or transmitted by email to the address or email address given for the party on the signature page of this Agreement
and is deemed to have been received when it is delivered by hand or transmitted by email.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22. Any payments of money must be delivered by hand or wired as instructed in writing
by the receiving party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23. Neither the Principals nor the FAVO Group may assign this Agreement or any part
of it to another party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;24. Any amendment of this Agreement must be in writing and signed by the parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;25. This Agreement enures to the benefit of and binds the parties and their respective
successors, heirs and permitted assignees.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;26. If any provision of this agreement is illegal or unenforceable under any law,
then it is severed, and the remaining provisions remain legal and enforceable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;27. This agreement may be signed in counterparts and delivered to the parties by email,
and the counterparts together are deemed to be one original document.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;28. This Agreement and the Acquisition Agreements set forth the entire agreement and
understanding among the parties as to the subject matter hereof and merges with and supercedes all prior discussions and understandings
of any and every nature among them, including the Letter of Intent.

*<u>[SIGNATURE PAGE FOLLOWS]</u>*

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective duly authorized oﬃcers or representatives as of the date ﬁrst written above.

---

| | |
|:---|:---|
| **Members:** | **Buyer:** |
| **FAVO Group** | **FAVO Capital** |
| By: /s/ Shaun Quin | By: Vincent Napolitano |
| Name: Shaun Quin | Name: Vincent Napolitano |
| Title: President | Title: CEO |
| Address: 1025 Old Country Road | Address: 1025 Old Country Road |
| Suite 421 E. Westbury, NY 11590 | Suite 421 E. Westbury, NY 11590 |
| **The Principals**  | **The Principals of Stewards Investment Capital Limited** |
| By: Vincent Napolitano | By: Glen Steward |
| Name: Vincent Napolitano | Name Glen Steward |
| Title: CEO | Title Director |
| By: /s/ Shaun Quin | By: /s/ Bilal Adam (SIC) |
| Name: Shaun Quin | Name: Bilal Adam |
| Title: President | Title: CEO |
| **The Authorized Signatory for Forfront Capital** |  |
| By: Nathaniel Tsang Mang Kin |  |
| /s/ Nathaniel Tsang Mang Kin |  |

---

## Exhibit 10.2

***Execution Version***

 ****

**SECURITIES PURCHASE AGREEMENT**

This Securities Purchase Agreement (this <u>"Agreemen</u>t") is dated as of<u> </u>, 2024, between Favo Capital, Inc., a Nevada corporation (the "<u>Company</u>"), and each purchaser identified on the signature pages hereto (each, including its successors and assigns, a "P<u>urchaser</u>" and collectively, the "<u>Purchasers</u>").

WHEREAS, subject to the terms and conditions set forth in this Agreement and pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the "<u>Securities Act</u>"), and Rule 506 promulgated thereunder, the Company desires to issue and sell to each Purchaser, and each Purchaser, severally and not jointly, desires to purchase from the Company, securities of the Company as more fully described in this Agreement.

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Company and each Purchaser agree as follows:

**ARTICLE I. DEFINITIONS**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1 <u>Definitions</u>. In addition to the terms defined elsewhere in this Agreement the following terms have the meanings set forth in this Section 1.1:

"<u>Acquiring Person</u>" shall have the meaning ascribed to such term in Section 4.6. "<u>Action</u>" shall have the meaning ascribed to such term in Section 3.1(h). "<u>Affiliate</u>" means any Person that, directly or indirectly through one or more

intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.

"<u>Board of Directors</u>" means the board of directors of the Company.

"<u>Business Day</u>" means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law to remain closed; <u>provided</u>, <u>however</u>, for clarification, commercial banks shall not be deemed to be authorized or required by law to remain closed due to "stay at home", "shelter-in-place", "non-essential employee" or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York are generally are open for use by customers on such day.

"<u>Closing</u>" means any closing of the purchase and sale of the Securities pursuant to Section 2.1.

"<u>Closing Date</u>" means the Business Day on which all of the Transaction Documents have been executed and delivered by the applicable parties thereto, and all conditions

precedent to (i) a Purchaser's obligations to pay its Subscription Amount and (ii) the Company's obligations to deliver the Securities, in each case, have been satisfied or waived. Pursuant to the terms of this Agreement, there may be one or more Closing Dates hereunder.

"<u>Commission</u>" means the United States Securities and Exchange Commission.

"<u>Common Stock</u>" means the common stock of the Company, par value $0.0001 per share, and any other class of securities into which such securities may hereafter be reclassified or changed.

"<u>Common Stock Equivalents</u>" means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.

"<u>Company Counsel</u>" means The Doney Law Firm, with offices located at 4955 S. Durango Rd. Ste 165, Las Vegas, NV 89113.

"<u>Escrow Agent</u>" means Continental Stock Trust & Transfer Co., or such other escrow agent as EF Hutton may designate.

"<u>Exchange Act</u>" means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

"<u>FCPA</u>" means the Foreign Corrupt Practices Act of 1977, as amended. "<u>GAAP</u>" means generally accepted accounting principles.

"<u>Indebtedness</u>" shall have the meaning ascribed to such term in Section 3.1(x).

"<u>Intellectual Property Rights</u>" shall have the meaning ascribed to such term in Section 3.1(n).

"<u>Legend Removal Date</u>" shall have the meaning ascribed to such term in Section

4.1(c).

"<u>Liens</u>" means a lien, charge, pledge, security interest, encumbrance, right of first

refusal, preemptive right or other restriction.

"<u>Material Adverse Effect</u>" shall have the meaning assigned to such term in Section

3.1(b).

"<u>Material Permits</u>" shall have the meaning ascribed to such term in Section 3.1(1).

"<u>Maximum Amount</u>" means an aggregate of $5,000,000, which may be increased

by an additional $1,000,000 in the sole discretion Board of Directors.

"<u>Offering</u>" means the offering of Common Stock pursuant to this Agreement and the other Transaction Documents.

"<u>Offering Period</u>" means the earlier of (i) the sale of the Maximum Amount, (ii) termination of the Offering as determined by the Company and the Placement Agent or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) September 30, 2024 ("Initial Offering Period"), which date may be extended by the Placement Agent and the Company in their joint discretion until November 30, 2024.

"<u>Person</u>" means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

"<u>Placement Agent(s)</u>" means EF Hutton LLC.

"<u>Pre-Funded Warrants</u>" means a common stock purchase warrant, in the form of <u>Exhibit A</u> attached hereto, entitling the holder thereof to purchase shares of Common Stock at a purchase price of $0.001 per share.

"<u>Pre-Funded Warrant Shares</u>" means the shares of Common Stock issuable upon exercise of the Pre-Funded Warrants.

"<u>Proceeding</u>" means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding, such as a deposition), whether commenced or threatened.

"<u>Purchased Shares</u>" means the shares of Common Stock issued and issuable pursuant to the terms of this Agreement.

"<u>Purchaser Party</u>" shall have the meaning ascribed to such term in Section 4.9.

"<u>Qualified Offering</u>" shall mean a registered offering of Common Stock (or units consisting of Common Stock and warrants to purchase Common Stock) resulting in the listing for trading of the Common Stock on the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market or the New York Stock Exchange (or any successors to any of the foregoing).

"<u>Required Approvals</u>" shall have the meaning ascribed to such term in Section 3.1(e).

"<u>Rule 144</u>" means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

"<u>Rule 424</u>" means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.

"<u>Securities</u>" means the Purchased Shares, the Warrants, the Warrant Shares, the Pre-Funded Warrants and the Pre-Funded Warrant Shares.

"<u>Short Sales</u>" means all "short sales" as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall not be deemed to include locating and/or borrowing shares of Common Stock).

"<u>Subscription Amount</u>" means, as to each Purchaser, the aggregate amount to be paid for the Units purchased hereunder as specified below such Purchaser's name on the signature page of this Agreement and next to the heading "Subscription Amount," in United States dollars and in immediately available funds.

"<u>Subsidiary</u>" means any subsidiary of the Company as set forth in Schedule 3.1(a) and shall, where applicable, also include any direct or indirect subsidiary of the Company formed or acquired after the date hereof.

"<u>Termination Date</u>" means the date on which the Offering expires or is terminated.

"<u>Trading Day</u>" means a day on which the principal Trading Market is open for

trading.

"<u>Trading Market</u>" means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, OTCPink, OTCQB or OTCQX (or any successors to any of the foregoing).

"<u>Transaction Documents</u>" means this Agreement, the Warrants, all exhibits and schedules thereto and hereto and any other documents or agreements executed in connection with the transactions contemplated hereunder.

"<u>Transfer Agent</u>" means ClearTrust LLC, the current transfer agent of the Company, with a mailing address of 16540 Pointe Village Dr., Ste 205 Lutz, Florida 33558, and any successor transfer agent of the Company.

"<u>Unit</u>" has the meaning set forth in Section 2.1.

"<u>Warrant</u>" means a common stock purchase warrant, in the form of <u>Exhibit B</u> attached hereto, entitling the holder thereof to purchase shares of Common Stock at a purchase price of $0.40 per share.

"<u>Warrant Shares</u>" means the shares of Common Stock issuable upon exercise of the Common Stock.

**ARTICLE II.**

**PURCHASE AND SALE**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1 <u>Closings</u>. On each Closing Date, upon the terms and subject to the conditions set forth herein, substantially concurrent with the execution and delivery of this Agreement by the parties hereto, the Company agrees to sell, and each Purchaser participating in the applicable Closing, severally and not jointly, agrees to purchaser units (each, a "<u>Unit</u>") for a price per unit of $0.25, consisting of one share Common Stock, a Warrant to purchase one share of Common Stock at an exercise price per share of $0.40 and a Pre-Funded Warrant to purchase a number of shares of shares of Common Stock equal to three-two hundredths (3/200<sup>ths</sup>) of a share of Common Stock at an exercise price per share of $0.001. The number of Units to be purchased by a Purchase at the applicable Closing shall be set forth on such Purchaser's signature page hereto; provided that no purchase of Units by a Purchaser in a Closing shall consist of fewer than 200,000 Units ($50,000), unless waived by the Company in its sole discretion. Each Purchaser shall have delivered to the Escrow Agent pursuant to the instructions contained on <u>Schedule 2.1</u>, via wire transfer or a certified check, immediately available funds equal to such Purchaser's Subscription Amount as set forth on the signature page hereto executed by such Purchaser. Upon the exchange of items set forth in Section 2.2, the Company and the Placement Agent may give notice to the Escrow Agent to arrange an initial Closing. At any Closing hereunder, the Company shall deliver to each Purchaser its respective Common Stock, Warrant and Pre-Funded Warrant, as determined pursuant to Section 2.2(a), and the Company and each Purchaser shall deliver the other items set forth in Section 2.2. If the initial Closing is not for the Maximum Amount, subsequent closings may be held up to the sale of the Maximum Amount. Upon satisfaction of the covenants and conditions set forth in Sections 2.2 and 2.3, each Closing shall occur at such location as the parties shall mutually agree. Closings hereunder shall only be held during the Offering Period and in no event shall a Closing occur after the Termination Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2 <u>Deliveries</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) On or prior to each Closing Date, the Company shall deliver or cause to be delivered to each of the Placement Agent on behalf of each Purchaser participating in the applicable Closing the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) this Agreement duly executed by the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) a stock certificate or book entry statement for each Purchaser from the Transfer Agent representing an amount of shares of Common Stock equal to such Purchaser's Subscription amount divided by 1;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) a Warrant to purchase a number of shares of Common Stock equal to such Purchaser's Subscription amount divided by 1, duly executed by the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) a Pre-Funded Warrant to purchase up to a number of shares of Common Stock equal to
Purchaser's Subscription amount multiplied by three-two hundredths (3/200ths), duly executed by the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) a copy of a good standing certificate of the Company, dated a date reasonably close to each Closing Date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) for initial Closing Date only, a certificate, dated as of the Closing Date, duly executed, and delivered by an officer of the Company, certifying the resolutions of the Company's Board of Directors then in full force and effect authorizing, to the extent relevant, all aspects of the transaction and the execution, delivery and performance of each Transaction Document to be executed and the transactions contemplated hereby and thereby;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) opinion of counsel to the Company in form satisfactory to the counsel to the Placement Agent; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) such other approvals, opinions, or documents as the Placement Agent may request in form and substance reasonably satisfactory to the Placement Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) On or prior to the Closing Date in which respect of a Purchaser is participating, such Purchaser shall deliver or cause to be delivered to the Company the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) this Agreement duly executed by such Purchaser;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) such Purchaser's Subscription Amount as to the Closing by wire transfer to the Escrow Agent to the account specified in <u>Schedule 2.1 hereto</u>; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Purchaser Questionnaire in the form of <u>Exhibit C</u> hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3 <u>Closing Conditions</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the accuracy in all material respects on (or, to the extent representations or warranties are qualified by materiality or Material Adverse Effect, in all respects) the Closing Date of the representations and warranties of the Purchasers contained herein (unless as of a specific date therein in which case they shall be accurate as of such date);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) all obligations, covenants and agreements of each Purchaser required to be performed at or prior to the Closing Date shall have been performed; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) the delivery by each Purchaser of the items set forth in Section 2.2(b) of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The respective obligations of the Purchasers hereunder in connection with a Closing are subject to the following conditions being met:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse Effect, in all respects) when made and on the Closing Date of the representations and warranties of the Company contained herein (unless as of a specific date therein in which case they shall be accurate as of such date);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) all obligations, covenants and agreements of the Company required to be performed at or prior to the applicable Closing Date shall have been performed;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) the delivery by the Company of the items set forth in Section 2.2(a) of this Agreement; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) there shall have been no Material Adverse Effect with respect to the Company since the date hereof.

**ARTICLE III.**

**REPRESENTATIONS AND WARRANTIES**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1 <u>Representations and Warranties of the Company</u>. The Company hereby makes the following representations and warranties to each Purchaser:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Subsidiaries</u>. All of the direct and indirect subsidiaries of the Company are set forth on <u>Schedule 3.1(a)</u>. Except as set forth on <u>Schedule 3.1(a)</u>, the Company owns, directly or indirectly, all of the capital stock or other equity interests of each Subsidiary free and clear of any Liens, and all of the issued and outstanding shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities. If the Company has no subsidiaries, all other references to the Subsidiaries or any of them in the Transaction Documents shall be disregarded.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Organization and Qualification</u>. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither the Company nor any Subsidiary is in violation nor default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) a material adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse effect on the Company's ability to perform in any material respect on a timely basis its obligations under any Transaction Document (any of

(i), (ii) or (iii), a "<u>Material Adverse Effect</u>"); provided that a change in the market price or trading volume of the Common Stock alone shall not be deemed, in and of itself, to constitute a Material Adverse Effect. To the knowledge of the Company, no Proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Authorization; Enforcement</u>. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement and each of the other Transaction Documents by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company, the Board of Directors or the Company's stockholders in connection herewith or therewith other than in connection with the Required Approvals. This Agreement and each other Transaction Document to which it is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors' rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>No Conflicts</u>. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to which it is a party, the issuance and sale of the Securities and the consummation by it of the transactions contemplated hereby and thereby do not and will not (i) conflict with or violate any provision of the Company's or any Subsidiary's certificate or articles of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, anti-dilution or similar adjustments, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not have or reasonably be expected to result in a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Filings, Consents and Approvals</u>. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i) the filings required pursuant to Section 4.6 of this Agreement, and (ii) the filing of Form D with the Commission and such filings as are required to be made under applicable state securities laws (collectively, the "<u>Required Approvals</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Issuance of the Securities</u>. The Securities are duly authorized and, when issued and paid for in accordance with the applicable Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company other than restrictions on transfer provided for in the Transaction Documents. The Securities, when issued in accordance with the terms of the Transaction Documents, will be validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company other than restrictions on transfer provided for in the Transaction Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>Capitalization</u>. The capitalization of the Company as of the date hereof is set forth on <u>Schedule 3.1(g)</u>. No Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents. Except as a result of the purchase and sale of the Securities and, except as disclosed in <u>Schedule 3.1(g)</u>, there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common Stock or the capital stock of any Subsidiary, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents or capital stock of any Subsidiary. The issuance and sale of the Securities will not obligate the Company or any Subsidiary to issue shares of Common Stock or other securities to any Person (other than the Purchasers). There are no outstanding securities or instruments of the Company or any Subsidiary with any provision that adjusts the exercise, conversion, exchange or reset price of such security or instrument upon an issuance of securities by the Company or any Subsidiary. There are no outstanding securities or instruments of the Company or any Subsidiary that contain any redemption or similar provisions, and there are no contracts, commitments, understandings, or arrangements by which the Company or any Subsidiary is or may become bound to redeem a security of the Company or such Subsidiary. The Company does not have any stock appreciation rights or "phantom stock" plans or agreements or any similar plan or agreement. All of the outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable, have been issued in compliance with all federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. No further approval or authorization of any stockholder, the Board of Directors or others is required for the issuance and sale of the Securities, except for shareholder approval to increase the number of authorized shares of Common Stock. There are no stockholders agreements, voting agreements or other similar agreements with respect to the Company's capital stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company's stockholders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <u>Litigation</u>. There is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an "<u>Action</u>") which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Securities or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Labor Relations</u>. No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of the Company or any Subsidiary, which could reasonably be expected to result in a Material Adverse Effect. None of the Company's or its Subsidiaries' employees is a member of a union that relates to such employee's relationship with the Company or such Subsidiary, and neither the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe that their relationships with their employees are good. To the knowledge of the Company, no executive officer of the Company or any Subsidiary, is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of any third party, and the continued employment of each such executive officer does not subject the Company or any of its Subsidiaries to any liability with respect to any of the foregoing matters. The Company and its Subsidiaries are in compliance with all

U.S. federal, state, local and foreign laws and regulations relating to employment and employment practices, terms and conditions of employment and wages and hours, except where the failure to be in compliance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) <u>Compliance</u>. Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation of any judgment, decree or order of any court, arbitrator or other governmental authority or (iii) is or has been in violation of any statute, rule, ordinance or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental protection, occupational health and safety, product quality and safety and employment and labor matters, except in each case as could not have or reasonably be expected to result in a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) <u>Environmental Laws</u>. The Company and its Subsidiaries (i) are in compliance with all federal, state, local and foreign laws relating to pollution or protection of human health or the environment (including ambient air, surface water, groundwater, land surface or subsurface strata), including laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, "<u>Hazardous Materials</u>") into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands, or demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations, issued, entered, promulgated or approved thereunder ("<u>Environmental Laws</u>"); (ii) have received all permits licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses; and (iii) are in compliance with all terms and conditions of any such permit, license or approval where in each clause (i), (ii) and (iii), the failure to so comply could be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) <u>Regulatory Permits</u>. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as currently conducted, except where the failure to possess such permits could not reasonably be expected to result in a Material Adverse Effect ("<u>Material Permits</u>"), and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation or modification of any Material Permit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) <u>Title to Assets</u>. The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned by them and good and marketable title in all personal property owned by them that is material to the business of the Company and the Subsidiaries, in each case free and clear of all Liens, except for (i) Liens as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries and (ii) Liens for the payment of federal, state or other taxes, for which appropriate reserves have been made therefor in accordance with GAAP and, the payment of which is neither delinquent nor subject to penalties. Any real property and facilities held under lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases with which the Company and the Subsidiaries are in compliance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) <u>Intellectual Property</u>. Except as set forth on <u>Schedule 3.1(n)</u>, the Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights necessary or required for use in connection with their respective businesses as currently conducted and which the failure to so have could have a Material Adverse Effect (collectively, the "<u>Intellectual Property Rights</u>"). None of, and neither the Company nor any Subsidiary has received a notice (written or otherwise) that any of, the Intellectual Property Rights has expired, terminated or been abandoned, or is expected to expire or terminate or be abandoned, within two (2) years from the date of this Agreement. Neither the Company nor any

Subsidiary has received, since the date of the latest financial statements provided to the Placement Agent, a written notice of a claim or otherwise has any knowledge that the Intellectual Property Rights violate or infringe upon the rights of any Person, except as could not have or reasonably be expected to not have a Material Adverse Effect. To the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights. The Company and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality, and value of all of their intellectual properties, except where failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) <u>Insurance</u>. The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary for companies of the Company's size and in the businesses in which the Company and the Subsidiaries are engaged. Neither the Company nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without a significant increase in cost.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) <u>Transactions with Affiliates and Employees</u>. Except as set forth in Schedule 3.1(p), none of the officers or directors of the Company or any Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary is presently a party to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from providing for the borrowing of money from or lending of money to, or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee, stockholder, member or partner, other than for (i) payment of salary, board fees or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company and (iii) other employee benefits, including stock option agreements under any stock option plan of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) <u>[Intentionally Omitted]</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r) <u>Certain Fees</u>. Except with respect to the fees and expenses payable to the Placement Agent as described in Section 5.2 hereto, no brokerage or finder's fees or commissions or other remuneration are or will be payable by the Company or any Subsidiaries directly or indirectly to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents. The Purchasers shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated by the Transaction Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s) <u>Private Placement</u>. Assuming the accuracy of the Purchasers' representations and warranties set forth in Section 3.2, no registration under the Securities Act is required for the offer and sale of the Securities by the Company to the Purchasers as contemplated hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t) <u>Investment Company</u>. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Securities, will not be or be an Affiliate of, an "investment company" within the meaning of the Investment Company Act of 1940, as amended. The Company shall conduct its business in a manner so that it will not become an "investment company" subject to registration under the Investment Company Act of 1940, as amended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(u) <u>Registration Rights</u>. Except as disclosed on <u>Schedule 3.1(u)</u>, no Person has any right to cause the Company or any Subsidiary to affect the registration under the Securities Act of any securities of the Company or any Subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) <u>Disclosure</u>. All of the disclosure furnished by or on behalf of the Company to the Purchasers regarding the Company and its Subsidiaries, their respective businesses and the transactions contemplated hereby, including the Transaction Documents and disclosure schedules to this Agreement, is true and correct and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. The Company acknowledges and agrees that no Purchaser makes or has made any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 3.2 hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(w) <u>No Integrated Offering</u>. Assuming the accuracy of the Purchasers' representations and warranties set forth in Section 3.2, neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the Securities to be integrated with prior offerings by the Company for purposes of the Securities Act which would require the registration of any such securities under the Securities Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) <u>Solvency</u>. The Company has no knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction within one year from the Closing Date. There is no outstanding Indebtedness of the Company or any Subsidiary, or for which the Company or any Subsidiary has commitments. For the purposes of this Agreement, "<u>Indebtedness</u>" means (x) any liabilities for borrowed money or amounts owed in excess of $100,000 (other than trade accounts payable incurred in the ordinary course of business), (y) all guaranties, endorsements and other contingent obligations in respect of indebtedness of others, whether or not the same are or should be reflected in the Company's consolidated balance sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business; and (z) the present value of any lease payments in excess of $50,000 due under leases required to be capitalized in accordance with GAAP. Except as disclosed on <u>Schedule 3.1(x)</u>, neither the Company nor any Subsidiary is in default with respect to any Indebtedness.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(y) <u>Taxes</u>. (a) Except as disclosed on <u>Schedule 3.1(y)</u> each of the Company and its Subsidiaries has timely paid all taxes and other charges due by the Company to any local or foreign tax authorities, including, without limitation, income taxes, estimated taxes, excise taxes, sales taxes, value added taxes, use taxes, gross receipts taxes, franchise taxes, national insurance taxes, national healthcare contributions, employment and payroll related taxes, property taxes and import duties, whether or not measured in whole or in part by net income (hereinafter, "<u>Taxes</u>" or, individually, a "<u>Tax</u>") which have come due and are required to be paid by it through the date hereof or the date of the relevant Closing, and all deficiencies or other additions to Tax, interest and penalties owed by it in connection with any such Taxes; (b) except as set forth in Schedule 3.1(y), each of the Company and its Subsidiaries has duly and timely submitted or caused to be submitted all returns for Taxes that it is required to submit on and through the date hereof or the date of the relevant Closing, as applicable (including, in each case, all applicable extensions), and all such Tax returns are accurate and complete in all material respects; (c) with respect to all Tax returns of the Company and its Subsidiaries, (i) there is no unassessed Tax deficiency proposed or, to the knowledge of the Company, threatened against the Company or its Subsidiaries and (ii) no audit is in progress with respect to any return for Taxes, no extension of time is in force with respect to any date on which any return for Taxes was or is to be submitted and no waiver or agreement is in force for the extension of time for the assessment or payment of any Tax; (d) all provisions for Tax liabilities of the Company and its Subsidiaries have been made consistent with GAAP consistently applied, and all liabilities for Taxes of the Company and its Subsidiaries attributable to periods prior to or ending on the date hereof or the date of the relevant Closing, as applicable, have been adequately provided for; (e) there are no liens for Taxes on the assets of the Company or its Subsidiaries; (f) all monies required to be withheld by the Company (including from employees for income Taxes and social security and other payroll Taxes) have been collected or withheld, and either paid to the respective taxing authorities, set aside in accounts for such purpose, or accrued, reserved against and entered upon the books of the Company; (g) to the knowledge of the Company, there are no circumstances which will or may, whether by lapse of time or the issue of any notice of assessment or otherwise, give rise to any dispute with any relevant taxation authority in relation to the Company's or its Subsidiaries' liability or accountability for Tax under currently enacted statutes and regulations, any claim made by any of them, any relief, deduction, or allowance afforded to any such company, or in relation to the status or character of the Company or its Subsidiaries under or for the purpose of any provision of any legislation relating to Tax; (h) the Company has duly collected all amounts on account of any sales transfer Taxes or valued added taxes, including goods and services, harmonized sales and provincial or territorial sales Taxes, required by law to be collected by it, and has duly and timely remitted to the appropriate governmental authority any such amounts required by law to be remitted by it; and (i) the Company has not refunded or deducted any input valued added taxes that it was not so entitled to deduct or refund.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(z) <u>No General Solicitation</u>. Neither the Company nor any Person acting on behalf of the Company has offered or sold any of the Securities by any form of general

solicitation or general advertising. The Company has offered the Securities for sale only to the Purchasers and certain other "accredited investors" within the meaning of Rule 501 under the Securities Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(aa) <u>Foreign Corrupt Practices</u>. Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary, any agent or other person acting on behalf of the Company or any Subsidiary, has (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by the Company or any Subsidiary (or made by any person acting on its behalf of which the Company is aware) which is in violation of law or (iv) violated in any material respect any provision of FCPA.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(bb) <u>No Disagreements with Accountants and Lawyers</u>. There are no disagreements of any kind presently existing, or reasonably anticipated by the Company to arise, between the Company and the accountants and lawyers presently or, to the knowledge of the Company, formerly employed by the Company and the Company is current with respect to any fees owed to its accountants and lawyers which could affect the Company's ability to perform any of its obligations under any of the Transaction Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(cc) <u>Acknowledgment Regarding Purchasers' Purchase of Securities</u>. The Company acknowledges and agrees that each of the Purchasers is acting solely in the capacity of an arm's length purchaser with respect to the Transaction Documents and the transactions contemplated thereby. The Company further acknowledges that no Purchaser is acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby and any advice given by any Purchaser or any of their respective representatives or agents in connection with the Transaction Documents and the transactions contemplated thereby is merely incidental to the Purchasers' purchase of the Securities. The Company further represents to each Purchaser that the Company's decision to enter into this Agreement and the other Transaction Documents has been based solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(dd) <u>Acknowledgment Regarding Purchaser's Trading Activity</u>. Anything in this Agreement or elsewhere herein to the contrary notwithstanding (except for Sections 3.2(g) and 4.11 hereof), it is understood and acknowledged by the Company that: (i) none of the Purchasers has been asked by the Company to agree, nor has any Purchaser agreed, to desist from purchasing or selling, long and/or short, securities of the Company, or "derivative" securities based on securities issued by the Company or to hold the Securities for any specified term, (ii) past or future open market or other transactions by any Purchaser, specifically including, without limitation, Short Sales or "derivative" transactions, before or after the closing of this or future private placement transactions, may negatively impact the market price of the Company's publicly-traded securities, (iii) any Purchaser, and counter-parties in "derivative" transactions to which any such

Purchaser is a party, directly or indirectly, may presently have a "short" position in the Common Stock and (iv) each Purchaser shall not be deemed to have any affiliation with or control over any arm's length counter-party in any "derivative" transaction. The Company further understands and acknowledges that (y) one or more Purchasers may engage in hedging activities at various times during the period that the Securities are outstanding, including, without limitation, during the periods that the value of the Purchased Shares, Warrant Shares or Pre-Funded Warrant Shares deliverable with respect to Securities are being determined, and (z) such hedging activities (if any) could reduce the value of the existing stockholders' equity interests in the Company at and after the time that the hedging activities are being conducted. The Company acknowledges that such hedging activities do not constitute a breach of any of the Transaction Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ee) <u>Stock Option Plans</u>. No stock options are outstanding as of the date hereof, but the Company plans to adopt an equity incentive plan for its officers, directors and consultants in the near future and reserve 20,000,000 shares of Common Stock under the plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ff) <u>Office of Foreign Assets Control</u>. Neither the Company nor any Subsidiary nor, to the Company's knowledge, any director, officer, agent, employee or affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department ("<u>OFAC</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(gg) <u>U.S. Real Property Holding Corporation</u>. The Company is not and has never been a U.S. real property holding corporation within the meaning of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon Purchaser's request.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(hh) <u>Bank Holding Company Act</u>. Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding Company Act of 1956, as amended (the "<u>BHCA</u>") and to regulation by the Board of Governors of the Federal Reserve System (the "<u>Federal Reserve</u>"). Neither the Company nor any of its Subsidiaries or Affiliates owns or controls, directly or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent or more of the total equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither the Company nor any of its Subsidiaries or Affiliates exercises a controlling influence over the management or policies of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <u>Money Laundering</u>. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with applicable financial record- keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the "<u>Money Laundering Laws</u>"), and no Action or Proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge of the Company or any Subsidiary, threatened.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(jj) <u>No Disqualification Events</u>. With respect to the Securities to be offered and sold hereunder in reliance on Rule 506 under the Securities Act, none of the Company, any of its predecessors, any affiliated issuer, any director, executive officer, other officer of the Company participating in the offering hereunder, any beneficial owner of 20% or more of the Company's outstanding voting equity securities, calculated on the basis of voting power, nor any promoter (as that term is defined in Rule 405 under the Securities Act) connected with the Company in any capacity at the time of sale (each, an "<u>Issuer Covered Person</u>" and, together, "<u>Issuer Covered Persons</u>") is subject to any of the "Bad Actor" disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act (a "<u>Disqualification Event</u>"), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The Company has exercised reasonable care to determine whether any Issuer Covered Person is subject to a Disqualification Event. The Company has complied, to the extent applicable, with its disclosure obligations under Rule 506(e), and has furnished to the Purchasers a copy of any disclosures provided thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(kk) <u>Other Covered Persons</u>. Other than the Placement Agent, the Company is not aware of any person (other than any Issuer Covered Person) that has been or will be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with the sale of any Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ll) <u>Notice of Disqualification Events</u>. The Company will notify the Purchasers in writing, prior to the Closing Date of (i) any Disqualification Event relating to any Issuer Covered Person and (ii) any event that would, with the passage of time, reasonably be expected to become a Disqualification Event relating to any Issuer Covered Person, in each case of which it is aware.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2 <u>Representations and Warranties of the Purchasers</u>. Each Purchaser, for itself and for no other Purchaser, hereby represents and warrants as of the date hereof and as of the applicable Closing Date to the Company as follows (unless as of a specific date therein, in which case they shall be accurate as of such date):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Organization; Authority</u>. Such Purchaser is either an individual or an entity duly incorporated or formed, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation with full right, corporate, partnership, limited liability company or similar power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of the Transaction Documents and performance by such Purchaser of the transactions contemplated by the Transaction Documents have been duly authorized by all necessary corporate, partnership, limited liability company or similar action, as applicable, on the part of such Purchaser. Each Transaction Document to which it is a party has been duly executed by such Purchaser, and when delivered by such Purchaser in accordance with the terms hereof, will constitute the valid and legally binding obligation of such Purchaser, enforceable against it in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors' rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable

remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Own Account</u>. Such Purchaser is acquiring the Securities as principal for its own account and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of such Securities (this representation and warranty not limiting such Purchaser's right to sell the Securities in compliance with applicable federal and state securities laws). Such Purchaser understands that the Securities are "restricted securities" and have not been registered under the Securities Act or any applicable state securities law and is acquiring the Securities as principal for its own account and not with a view to or for distributing or reselling such Securities or any part thereof in violation of the Securities Act or any applicable state securities law, has no present intention of distributing any of such Securities in violation of the Securities Act or any applicable state securities law and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of such Securities in violation of the Securities Act or any applicable state securities law (this representation and warranty not limiting such Purchaser's right to sell the Securities in compliance with applicable federal and state securities laws). Such Purchaser is acquiring the Securities hereunder in the ordinary course of its business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Purchaser Status</u>. At the time such Purchaser was offered the Securities, it was, and as of the date hereof it is, either an "accredited investor" as defined in Rule 501(a) under the Securities Act or a "qualified institutional buyer" as defined in Rule 144A under the Securities Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Experience of Such Purchaser</u>. Such Purchaser, either alone or together with its representatives, has such knowledge, sophistication, and experience in business and financial matters to be capable of evaluating the merits and risks of the prospective investment in the Securities, and has so evaluated the merits and risks of such investment. Such Purchaser can bear the economic risk of an investment in the Securities and, at the present time, is able to afford a complete loss of such investment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>General Solicitation</u>. Such Purchaser is not, to such Purchaser's knowledge, purchasing the Securities because of any advertisement, article, notice or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or, to the knowledge of such Purchaser, any other general solicitation or general advertisement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Access to Information</u>. Such Purchaser acknowledges that it has had the opportunity to review the Transaction Documents (including all exhibits and schedules thereto) and has been afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Securities and the merits and risks of investing in the Securities; (ii) access to information about the Company and its financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment, respectively, the investor presentation attached as <u>Exhibit D</u> to this Agreement, and Risk Factors attached as <u>Exhibit E</u> to this Agreement and (iii) the

opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>Certain Transactions and Confidentiality</u>. Other than consummating the transactions contemplated hereunder, such Purchaser has not, nor has any Person acting on behalf of or pursuant to any understanding with such Purchaser, directly or indirectly executed any purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time that such Purchaser first received a term sheet (written or oral) from the Company or any other Person representing the Company setting forth the material terms of the transactions contemplated hereunder and ending immediately prior to the execution hereof. Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Purchaser's assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of such Purchaser's assets, the representation set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Securities covered by this Agreement. Other than to other Persons party to this Agreement or to such Purchaser's representatives, including, without limitation, its officers, directors, partners, legal and other advisors, employees, agents and Affiliates, such Purchaser has maintained the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction). Notwithstanding the foregoing, for the avoidance of doubt, nothing contained herein shall constitute a representation or warranty against, or a prohibition of, any actions with respect to the borrowing of, arrangement to borrow, identification of the availability of, and/or securing of, securities of the Company for such Purchaser (or its broker or other financial representative) to effect Short Sales or similar transactions in the future.

The Company acknowledges and agrees that the representations contained in this Section 3.2 shall not modify, amend or affect such Purchaser's right to rely on the Company's representations and warranties contained in this Agreement or any representations and warranties contained in any other Transaction Document, or any other document or instrument executed and/or delivered in connection with this Agreement or the consummation of the transactions contemplated hereby. Notwithstanding the foregoing, for the avoidance of doubt, nothing contained herein shall constitute a representation or warranty, or preclude any actions, with respect to locating or borrowing shares to effect Short Sales or similar transactions in the future.

**ARTICLE IV.**

**OTHER AGREEMENTS OF THE PARTIES**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1 <u>Transfer Restrictions</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Securities may only be disposed of in compliance with state and federal securities laws. In connection with any transfer of Securities other than pursuant to an effective registration statement or Rule 144, to the Company or to an Affiliate of a Purchaser or in connection with a pledge as contemplated in Section 4.1(b), the Company may require the transferor thereof to provide to the Company an opinion of counsel selected

by the transferor and reasonably acceptable to the Company, the form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration of such transferred Securities under the Securities Act. As a condition of transfer, any such transferee shall agree in writing to be bound by the terms of this Agreement and shall have the rights and obligations of a Purchaser under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Purchasers agree to the imprinting, so long as is required by this Section 4.1, of a legend on any of the Securities in the following form:

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE HAS BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY [AND THE SECURITIES ISSUABLE UPON [EXERCISE] OF THIS SECURITY] MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.

The Company acknowledges and agrees that a Purchaser may from time to time pledge pursuant to a bona fide margin agreement with a registered broker-dealer or grant a security interest in some or all of the Securities to a financial institution that is an "accredited investor" as defined in Rule 501(a) under the Securities Act and, if required under the terms of such arrangement, such Purchaser may transfer pledged or secured Securities to the pledgees or secured parties. Such a pledge or transfer would not be subject to approval of the Company and no legal counsel of the pledgee, secured party or pledgor shall be required in connection therewith. Further, no notice shall be required of such pledge. At the appropriate Purchaser's expense, the Company will execute and deliver such reasonable documentation as a pledgee or secured party of Securities may reasonably request in connection with a pledge or transfer of the Securities, including, if the Securities have been registered for resale pursuant to a registration statement, the preparation and filing of any required prospectus supplement under Rule 424(b)(3) under the Securities Act or other applicable provision of the Securities Act to appropriately amend the list of selling stockholders thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Certificates evidencing the Securities shall not contain any legend (including the legend set forth in Section 4.1(b) hereof): (i) while a registration statement covering the resale of such security is effective under the Securities Act, (ii) following any sale of such Securities pursuant to Rule 144 or (iii) if such legend is not required under

applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the Commission). The Company shall, at its expense, cause its counsel, or at the option of a Purchaser, counsel determined by such Purchaser, to issue a legal opinion to the Transfer Agent or the Purchaser promptly if required by the Transfer Agent to effect the removal of the legend hereunder, or if requested by a Purchaser, respectively subject to compliance with the Securities Act and/or Rule 144 (for the avoidance of doubt, the Company shall pay all costs associated with such opinions). If the Purchased Shares, Warrant Shares or Pre-Funded Warrant Shares may be sold under Rule 144 or if such legend is not otherwise required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the Commission) then such Purchased Shares, Warrant Shares or Pre-Funded Warrant Shares shall be issued free of all legends. The Company agrees that at such time as such legend is no longer required under this Section 4.1(c), it will, no later than the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined below) following the delivery by a Purchaser to the Company or the Transfer Agent of a certificate representing Purchased Shares, Warrant Shares or Pre-Funded Warrant Shares, as applicable, issued with a restrictive legend (such date, the "<u>Legend Removal Date</u>"), deliver or cause to be delivered to such Purchaser a certificate representing such shares that is free from all restrictive and other legends. The Company may not make any notation on its records or give instructions to the Transfer Agent that enlarge the restrictions on transfer set forth in this Section 4. Certificates for Purchased Shares, Warrant Shares or Pre-Funded Warrant Shares subject to legend removal hereunder shall be transmitted by the Transfer Agent to the Purchaser by crediting the account of the Purchaser's prime broker with the Depository Trust Company System as directed by such Purchaser. As used herein, "<u>Standard Settlement Period</u>" means the standard settlement period, expressed in a number of Trading Days, on the Company's primary Trading Market with respect to the Common Stock as in effect on the date of delivery of a certificate representing Purchased Shares, Warrant Shares or Pre-Funded Warrant Shares, as applicable, issued with a restrictive legend.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Each Purchaser, severally and not jointly with the other Purchasers, agrees with the Company that such Purchaser will only sell Securities pursuant to either the registration requirements of the Securities Act, including any applicable prospectus delivery requirements, or an exemption therefrom, and that if Securities are sold pursuant to a registration statement, they will be sold in compliance with the plan of distribution set forth therein, and acknowledges that the removal of the restrictive legend from certificates representing Securities as set forth in this Section 4.1 is predicated upon the Company's reliance upon this understanding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2 <u>Acknowledgment of Dilution</u>. The Company acknowledges that the issuance of the Securities may result in dilution of the outstanding shares of Common Stock, which dilution may be substantial under certain market conditions. The Company further acknowledges that its obligations under the Transaction Documents, including, without limitation, its obligation to issue the Purchased Shares, Warrant Shares or Pre-Funded Warrant Shares pursuant to the Transaction Documents, are unconditional and absolute and not subject to any right of set off, counterclaim, delay or reduction, regardless of the effect of any such dilution or any claim the Company may

have against any Purchaser and regardless of the dilutive effect that such issuance may have on the ownership of the other stockholders of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3 <u>Furnishing of Information; Public Information</u>. From the date of the Qualified Offering, until the time that no Purchaser owns Securities, the Company covenants to maintain the registration of the Common Stock under Section 12(b) or 12(g) of the Exchange Act and to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act even if the Company is not then subject to the reporting requirements of the Exchange Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.4 <u>Integration</u>. The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities in a manner that would require the registration under the Securities Act of the sale of the Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.5 <u>Publicity</u>. The Company and each Purchaser shall consult with each other in issuing any other press releases with respect to the transactions contemplated hereby, and neither the Company nor any Purchaser shall issue any such press release nor otherwise make any such public statement without the prior consent of the Company, with respect to any press release of any Purchaser, or without the prior consent of each Purchaser, with respect to any press release of the Company, which consent shall not unreasonably be withheld or delayed, except if such disclosure is required by law, in which case the disclosing party shall promptly provide the other party with prior notice of such public statement or communication. Notwithstanding the foregoing, the Company shall not publicly disclose the name of any Purchaser, or include the name of any Purchaser in any filing with the Commission or any regulatory agency or Trading Market, without the prior written consent of such Purchaser, except to the extent such disclosure is required by law or Trading Market regulations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.6 <u>Shareholder Rights Plan</u>. No claim will be made or enforced by the Company or, with the consent of the Company, any other Person, that any Purchaser is an "<u>Acquiring Person</u>" under any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted by the Company, or that any Purchaser could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Securities under the Transaction Documents or under any other agreement between the Company and the Purchasers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.7 <u>Non-Public Information</u>. The Company covenants and agrees that neither it, nor any other Person acting on its behalf will provide any Purchaser or its agents or counsel with any information that constitutes, or the Company reasonably believes constitutes, material non-public information, unless prior thereto such Purchaser shall have consented to the receipt of such information and agreed with the Company to keep such information confidential. The Company understands and confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company. To the extent that the Company delivers any material, non-public information to a Purchaser without such Purchaser's consent, the Company hereby covenants and agrees that such Purchaser shall not have any duty of confidentiality to the Company, any of its Subsidiaries, or any of their respective officers, directors, agents, employees or Affiliates, or a duty to the Company, any of its Subsidiaries or any of their respective officers,

directors, agents, employees or Affiliates not to trade on the basis of, such material, non-public information, provided that the Purchaser shall remain subject to applicable law. Following the date of the Qualified Offering, to the extent that any notice provided pursuant to any Transaction Document constitutes, or contains, material, non-public information regarding the Company or any Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Company understands and confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.8 <u>Use of Proceeds</u>. The Company shall use the net proceeds from the sale of the Securities hereunder for working capital purposes and for expenses relating to its initial public offering and shall not use such proceeds: (a) for the satisfaction of any portion of the Company's debt (other than servicing interest on the debt or payment of trade payables in the ordinary course of the Company's business and prior practices), (b) for the redemption of any Common Stock or Common Stock Equivalents, (c) for the settlement of any outstanding litigation (d) in violation of FCPA or OFAC regulations or (e) to lend, give credit or make advances to any officers, directors, employees or affiliates of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.9 <u>Indemnification of Purchasers</u>. Subject to the provisions of this Section 4.9, the Company will indemnify and hold each Purchaser and its directors, officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls such Purchaser (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders, agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title) of such controlling persons (each, a "<u>Purchaser Party</u>") harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys' fees and costs of investigation that any such Purchaser Party may suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants or agreements made by the Company in this Agreement or in the other Transaction Documents or (b) any action instituted against the Purchaser Parties in any capacity, or any of them or their respective Affiliates, by any stockholder of the Company who is not an Affiliate of such Purchaser Party, with respect to any of the transactions contemplated by the Transaction Documents (unless such action is solely based upon a material breach of such Purchaser Party's representations, warranties or covenants under the Transaction Documents or any agreements or understandings such Purchaser Party may have with any such stockholder or any violations by such Purchaser Party of state or federal securities laws or any conduct by such Purchaser Party which is finally judicially determined to constitute fraud, gross negligence or willful misconduct). If any action shall be brought against any Purchaser Party in respect of which indemnity may be sought pursuant to this Agreement, such Purchaser Party shall promptly notify the Company in writing, and the Company shall have the right to assume the defense thereof with counsel of its own choosing reasonably acceptable to the Purchaser Party. Any Purchaser Party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Purchaser Party except to the extent that (i) the employment thereof has been specifically authorized by the Company in writing, (ii) the Company has failed after a reasonable period of time to assume such defense and to employ counsel or (iii) in such action there is, in the reasonable opinion of counsel,

a material conflict on any material issue between the position of the Company and the position of such Purchaser Party, in which case the Company shall be responsible for the reasonable fees and expenses of no more than one such separate counsel. The Company will not be liable to any Purchaser Party under this Agreement (y) for any settlement by a Purchaser Party effected without the Company's prior written consent, which shall not be unreasonably withheld or delayed; or (z) to the extent, but only to the extent that a loss, claim, damage or liability is attributable to any Purchaser Party's breach of any of the representations, warranties, covenants or agreements made by such Purchaser Party in this Agreement or in the other Transaction Documents. The indemnification required by this Section 4.9 shall be made by periodic payments of the amount thereof during the investigation or defense, as and when bills are received or are incurred. The indemnity agreements contained herein shall be in addition to any cause of action or similar right of any Purchaser Party against the Company or others and any liabilities the Company may be subject to pursuant to law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.10 <u>Equal Treatment of Purchasers</u>. No consideration (including any modification of any Transaction Document) shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of the Transaction Documents unless the same consideration is also offered to all of the parties to such Transaction Documents. For clarification purposes, this provision constitutes a separate right granted to each Purchaser by the Company and negotiated separately by each Purchaser and is intended for the Company to treat the Purchasers as a class and shall not in any way be construed as the Purchasers acting in concert or as a group with respect to the purchase, disposition or voting of Securities or otherwise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.11 <u>Certain Transactions and Confidentiality</u>. Notwithstanding anything contained in this Agreement to the contrary, the Company expressly acknowledges and agrees that (i) no Purchaser makes any representation, warranty or covenant hereby that it will not engage in effecting transactions in any securities of the Company, (ii) no Purchaser shall be restricted or prohibited from effecting any transactions in any securities of the Company in accordance with applicable securities laws and (iii) no Purchaser shall have any duty of confidentiality or duty not to trade in the securities of the Company to the Company or its Subsidiaries. Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Purchaser's assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of such Purchaser's assets, the covenant set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Securities covered by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.12 <u>Form D; Blue Sky Filings</u>. The Company agrees to timely file a Form D with respect to the Securities as required under Regulation D and to provide a copy thereof, promptly upon request of any Purchaser. The Company shall take such action as the Company shall reasonably determine is necessary in order to obtain an exemption for, or to qualify the Securities for, sale to the Purchasers at the Closing under applicable securities or "Blue Sky" laws of the states of the United States and shall provide evidence of such actions promptly upon request of any Purchaser.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.13 <u>Additional Pre-Funded Warrants</u>. If, by the date that is twelve (12) months from the applicable Closing Date, the Common Stock of the Company has not been uplisted, the

Company shall issued to each Purchaser a Pre-Funded Warrant to purchase up to a number of shares of Common Stock equal to Purchaser's Subscription amount multiplied by three-two hundredths (3/200ths), duly executed by the Company.

**ARTICLE V.** 

**MISCELLANEOUS**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1 <u>Termination</u>. This Agreement may be terminated by any Purchaser, as to such Purchaser's obligations hereunder only and without any effect whatsoever on the obligations between the Company and the other Purchasers, by written notice to the other parties, if the initial Closing has not been consummated on or before the tenth calendar day following the date hereof, <u>provided</u>, <u>however</u>, that no such termination will affect the right of any party to sue for any breach by any other party (or parties).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2 <u>Fees and Expenses</u>. Except as expressly set forth in the Transaction Documents to the contrary, each party shall pay the fees and expenses of its advisers, counsel, accountants, and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery, and performance of this Agreement. The Company shall pay all Transfer Agent fees (including, without limitation, any fees required for same-day processing of any instruction letter delivered by the Company), stamp taxes and other taxes and duties levied in connection with the delivery of any Securities to the Purchasers. In addition, EF Hutton LLC is acting as placement agent for this private offering pursuant to a placement agency agreement with the Company and will receive 10% cash compensation on amounts closed on pursuant to this Agreement, as well as an expense reimbursement from the Company, of up to $50,000.00 for its legal fees.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3 <u>Entire Agreement</u>. The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding of the parties with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.4 <u>Notices</u>. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of: (a) the time of transmission, if such notice or communication is delivered via facsimile at the facsimile number or email attachment at the email address as set forth on the signature pages attached hereto at or prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the time of transmission, if such notice or communication is delivered via facsimile at the facsimile number or email attachment as set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the second (2<sup>nd</sup>) Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as set forth on the signature pages attached hereto. To the extent that any notice provided pursuant to any Transaction Document constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.5 <u>Amendments; Waivers</u>. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed, in the case of an amendment, by the Company and Purchasers which purchased at least a majority of the Units based initial Subscription Amounts hereunder or, in the case of a waiver, by the party against whom enforcement of any such waived provision is sought, provided that if any amendment, modification or waiver disproportionately and adversely impacts a Purchaser (or group of Purchasers), the consent of such disproportionately impacted Purchaser (or group of Purchasers) shall also be required. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition, or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right. Any proposed amendment or waiver that disproportionately, materially, and adversely affects the rights and obligations of any Purchaser relative to the comparable rights and obligations of the other Purchasers shall require the prior written consent of such adversely affected Purchaser. Any amendment effected in accordance with this Section 5.5 shall be binding upon each Purchaser and holder of Securities and the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.6 <u>Headings</u>. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.7 <u>Successors and Assigns</u>. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of each Purchaser (other than by merger). Any Purchaser may assign any or all of its rights under this Agreement to any Person to whom such Purchaser assigns or transfers any Securities, provided that such transferee agrees in writing to be bound, with respect to the transferred Securities, by the provisions of the Transaction Documents that apply to the "Purchasers."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.8 <u>No Third-Party Beneficiaries</u>. This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as otherwise set forth in Section 4.10. Notwithstanding the foregoing, each of the Placement Agent shall be deemed a third-party beneficiary of the representations and warranties of the Company as contained in Section 3.1 of this Agreement and shall have the right to enforce such provisions directly to the extent it may deem such enforcement necessary or advisable to protect its rights.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.9 <u>Governing Law</u>. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal Proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees, or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including

with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any Action or Proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such Action or Proceeding is improper or is an inconvenient venue for such Proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such Action or Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If any party shall commence an Action or Proceeding to enforce any provisions of the Transaction Documents, then, in addition to the obligations of the Company under Section 4.10, the prevailing party in such Action or Proceeding shall be reimbursed by the non-prevailing party for its reasonable attorneys' fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Action or Proceeding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.10 <u>Survival</u>. The representations and warranties contained herein shall survive the Closing and the delivery of the Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.11 <u>Execution</u>. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to each other party, it being understood that the parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a ".pdf" format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or ".pdf" signature page was an original thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.12 <u>Severability</u>. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants, and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.13 <u>Rescission and Withdrawal Right</u>. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) any of the other Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under a Transaction Document and the Company does not timely perform its related obligations within the periods therein provided, then such Purchaser may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part without prejudice to its future actions and rights.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.14 <u>Replacement of Securities</u>. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen, or destroyed, the Company shall issue or cause to be issued in

exchange and substitution for and upon cancellation thereof (in the case of mutilation), or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction. The applicant for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs (including customary indemnity) associated with the issuance of such replacement Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.15 <u>Remedies</u>. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Purchasers and the Company will be entitled to specific performance under the Transaction Documents. The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction Documents and hereby agree to waive and not to assert in any Action for specific performance of any such obligation the defense that a remedy at law would be adequate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.16 <u>Payment Set Aside</u>. To the extent that the Company makes a payment or payments to any Purchaser pursuant to any Transaction Document or a Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other Person under any law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.17 <u>Independent Nature of Purchasers' Obligations and Rights</u>. The obligations of each Purchaser under any Transaction Document are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance or non- performance of the obligations of any other Purchaser under any Transaction Document. Nothing contained herein or in any other Transaction Document, and no action taken by any Purchaser pursuant hereto or thereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents. Each Purchaser shall be entitled to independently protect and enforce its rights, including, without limitation, the rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Purchaser to be joined as an additional party in any Proceeding for such purpose. Each Purchaser has been represented by its own separate legal counsel in its review and negotiation of the Transaction Documents. The Company has elected to provide all Purchasers with the same terms and Transaction Documents for the convenience of the Company and not because it was required or requested to do so by any of the Purchasers. It is expressly understood and agreed that each provision contained in this Agreement and in each other Transaction Document is between the Company and a Purchaser, solely, and not between the Company and the Purchasers collectively and not between and among the Purchasers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.18 <u>Saturdays, Sundays, Holidays, etc</u>. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day,

then such action may be taken, or such right may be exercised, on the next succeeding Business Day.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.19 <u>Construction</u>. The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition, each and every reference to share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.20 <u>WAIVER OF JURY TRIAL</u>. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.

*(Signature Pages Follow)*

 

IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

By

no

<u>Address for Notice:</u> 1025 OLD COUNTRY RD

STE 421E

<u>Email</u>: WESTBURY NY 11590

VNAPOLITANO@FAVOCAPITAL.COM

Title: Chief Executive Officer

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK SIGNATURE PAGE FOR PURCHASER FOLLOWS]

## Exhibit 10.3

**REGISTRATION RIGHTS AGREEMENT**

**REGISTRATION RIGHTS AGREEMENT** (this "**Agreement**"), dated as of October [_], 2024, by and among Favo Capital, Inc. a Nevada corporation, with headquarters located at 4300 N. University Drive Suite D-105 Lauderhill, Florida 33351 (the "**Company**"), and the investors listed on the Schedule of Buyers attached hereto (each, a "**Buyer**" and collectively, the "**Buyers**").

**WHEREAS**:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. In connection with the Securities Purchase Agreement by and among the parties hereto of even date herewith (the "**Securities Purchase Agreement**"), the Company has agreed, upon the terms and subject to the conditions of the Securities Purchase Agreement, to issue and sell to each Buyer, units consisting of (i) shares (the "**Purchased Shares**") of the Company's Common Stock, par value $0.0001 per share (the "**Common Shares**"), (ii) pre-funded warrants (the "**Pre-Funded Warrants**") where each Pre-Funded Warrant consists of a number of shares of Common Stock equal to three-two hundredths (3/200ths) of a share of Common Stock (such underlying Common Shares, the "**Pre-Funded Warrant Shares**") in accordance with the terms of the Pre-Funded Warrants, and (iii) common stock purchase warrants where each warrant has the right to acquire one share of Common Stock (the "**Purchase Warrants**" and together with the Pre- Funded Warrants, the "**Warrants**") to purchase Common Shares (such underlying Common Shares, collectively, the "**Purchase Warrant Shares**" and together with the Pre-Funded Warrant Shares, the "**Warrant Shares**") in accordance with the terms of the Purchase Warrants.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. In accordance with the terms of the Securities Purchase Agreement, the Company has agreed to provide certain registration rights under the Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar successor statute (collectively, the "**1933 Act**"), and applicable state securities laws.

**NOW**, **THEREFORE**, in consideration of the premises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and each of the Buyers hereby agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Definitions</u>.

Capitalized terms used herein and not otherwise defined herein shall have the respective meanings set forth in the Securities Purchase Agreement. As used in this Agreement, the following terms shall have the following meanings:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) "**Additional Effective Date**" means the date the Additional Registration Statement is declared effective by the SEC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) "**Additional Effectiveness Deadline**" means the date which
is the earlier of

&nbsp;&nbsp;&nbsp;&nbsp;(i) in the event that the Additional Registration Statement (x) is not subject to a full review by the SEC, the date which is thirty (30) calendar days after the earlier of the Additional Filing Date and the Additional Filing Deadline or (y) is subject to a full review by the SEC, the date which is sixty (60) calendar days after the earlier of the Additional Filing Date and the Additional Filing Deadline and (ii) the fifth (5th) Business Day after the date the Company is notified (orally or in writing,

whichever is earlier) by the SEC that such Additional Registration Statement will not be reviewed or will not be subject to further review; provided, however, that if the Additional Effectiveness Deadline falls on a Saturday, Sunday or other day that the SEC is closed for business, the Additional Effectiveness Deadline shall be extended to the next Business Day on which the SEC is open for business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) "**Additional Filing Date**" means the date on which the Additional Registration Statement is filed with the SEC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) "**Additional Filing Deadline**" means if Cutback Shares are required to be included in any Additional Registration Statement, the later of (i) the date sixty (60) days after the date substantially all of the Registrable Securities registered under the immediately preceding Registration Statement are sold and (ii) the date six (6) months from the Initial Effective Date or the most recent Additional Effective Date, as applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) "**Additional Registrable Securities**" means, (i) any Cutback Shares not previously included on a Registration Statement, and (ii) any capital stock of the Company issued or issuable with respect to the Purchased Shares, the Warrants, the Warrant Shares or the Cutback Shares, as applicable, as a result of any stock split, stock dividend, recapitalization, exchange or similar event or otherwise, without regard to any limitations on exercise of the Warrants.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) "**Additional Registration Statement**" means a registration statement or registration statements of the Company filed under the 1933 Act covering the resale any Additional Registrable Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) "**Additional Required Registration Amount**" means any Cutback Shares not previously included on a Registration Statement, all subject to adjustment as provided in Section 2(f), without regard to any limitations on the exercise of the Warrants.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) "**Business Day**" means any day other than Saturday, Sunday or any other day on which commercial banks in the City of New York are authorized or required by law to remain closed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) "**Closing Date**" shall have the meaning set forth in the Securities Purchase Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) "**Cutback Shares**" means any of the Initial Required Registration
Amount or

the Additional Required Registration Amount of Registrable Securities not included in all Registration Statements previously declared effective hereunder as a result of a limitation on the maximum number of Common Shares of the Company permitted to be registered by the staff of the SEC pursuant to Rule 415. For the purpose of determining the Cutback Shares, in order to determine any applicable Required Registration Amount, unless an Investor gives written notice to the Company to the contrary with respect to the allocation of its Cutback Shares, first the Warrant Shares shall be excluded on a pro rata basis among the Investors until all of the Warrant Shares have been excluded and second the Purchased Shares shall be excluded on a pro rata basis among the Investors until all of the Purchased Shares have been excluded.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) Intentionally omitted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) "**effective**" and "**effectiveness**" refer to a Registration Statement that has been declared effective by the SEC and is available for the resale of the Registrable Securities required to be covered thereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) "**Effective Date**" means the Initial Effective Date and the Additional Effective Date, as applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) "**Effectiveness Deadline**" means the Initial Effectiveness Deadline and the Additional Effectiveness Deadline, as applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) "**Filing Deadline**" means the Initial Filing Deadline and the Additional Filing Deadline, as applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) "**Initial Effective Date**" means the date that the Initial Registration Statement has been declared effective by the SEC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) "**Initial Effectiveness Deadline**" means the date which is the earlier of (x) (i) in the event that the Initial Registration Statement is not subject to a full review by the SEC, fifty (50) calendar days after the Closing Date or (ii) in the event that the Initial Registration Statement is subject to a full review by the SEC or in the event that the Company is notified by the SEC to refile the Initial Registration Statement on Form S-1, seventy (70) calendar days after the Closing Date and (y) the fifth (5th) Business Day after the date the Company is notified (orally or in writing, whichever is earlier) by the SEC that such Initial Registration Statement will not be reviewed or will not be subject to further review; provided, however, that if the Initial Effectiveness Deadline falls on a Saturday, Sunday or other day that the SEC is closed for business, the Initial Effectiveness Deadline shall be extended to the next Business Day on which the SEC is open for business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r) "**Initial Filing Date**" means the date on which the Initial Registration Statement is filed with the SEC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s) "**Initial Filing Deadline**" means the date which is twenty (20) Trading Days after the Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t) "**Initial Registrable Securities**" means (i) the Purchased Shares issued, (ii) the Warrant Shares issued or issuable upon exercise of the Warrants and (iii) any capital stock of the Company issued or issuable with respect to the Purchased Shares, the Warrant Shares or the Warrants, in each case as a result of any stock split, stock dividend, recapitalization, exchange or similar event or otherwise, without regard to any limitations on the exercise of the Warrants.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(u) "**Initial Registration Statement**" means a registration statement or registration statements of the Company filed under the 1933 Act covering the resale of Initial Registrable Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) "**Initial Required Registration Amount**" means, excluding any Cutback Shares, the sum of (i) the number of Purchased Shares issued and (ii) the maximum number of Warrant Shares issued and issuable pursuant to the Warrants without giving effect to any limitation on exercise set forth therein and each as of the Trading Day immediately preceding the applicable

date of determination and all subject to adjustment as provided in Section 2(f), without regard to any limitations on the exercise of the Warrants.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(w) "**Investor**" means a Buyer or any transferee or assignee thereof to whom a Buyer assigns its rights under this Agreement and who agrees to become bound by the provisions of this Agreement in accordance with Section 9 and any transferee or assignee thereof to whom a transferee or assignee assigns its rights under this Agreement and who agrees to become bound by the provisions of this Agreement in accordance with Section 9.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) "**Person**" means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization and a government or any department or agency thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(y) "**register**," "**registered**," and "**registration**" refer to a registration effected by preparing and filing one or more Registration Statements (as defined below) in compliance with the 1933 Act and pursuant to Rule 415, and the declaration or ordering of effectiveness of such Registration Statement(s) by the SEC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(z) "**Registrable Securities**" means the Initial Registrable Securities and the Additional Registrable Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(aa) "**Registration Statement**" means the Initial Registration Statement and the Additional Registration Statement, as applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(bb) "**Required Holders**" means the holders of at least a majority of the Registrable Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(cc) "**Required Registration Amount**" means either the Initial Required Registration Amount or the Additional Required Registration Amount, as applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(dd) "**Rule 415**" means Rule 415 promulgated under the 1933 Act or any successor rule providing for offering securities on a continuous or delayed basis.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ee) "**SEC**" means the United States Securities and Exchange Commission.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ff) "**Trading Day**" means any day on which the Common Shares are traded on the Trading Market.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(gg) "**Trading Market**" means any of the following markets or exchanges on which the Common Share are listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, OTCPink, OTCQB or OTCQX (or any successors to any of the foregoing).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Registration</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Initial Mandatory Registration</u>. The Company shall prepare, and, as soon as practicable but in no event later than the Initial Filing Deadline, file with the SEC the Initial Registration Statement on Form S-1 covering the resale of all of the Initial Registrable Securities. The Initial Registration Statement prepared pursuant hereto shall register for resale at least the number of Common Shares equal to the Initial Required Registration Amount determined as of the date the Initial Registration Statement is initially filed with the SEC, subject to adjustment as provided in Section 2(f). The Company shall use its reasonable best efforts to have the Initial Registration Statement declared effective by the SEC as soon as practicable, but in no event later than the Initial Effectiveness Deadline. By 9:30 a.m. New York time on the second (2<sup>nd</sup>) Business Day following the Initial Effective Date, the Company shall file with the SEC in accordance with Rule 424 under the 1933 Act the final prospectus to be used in connection with sales pursuant to such Initial Registration Statement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Additional Mandatory Registrations</u>. The Company shall prepare, and, as soon as practicable but in no event later than the Additional Filing Deadline, file with the SEC an Additional Registration Statement on Form S-1 covering the resale of all of the Additional Registrable Securities not previously registered on an Additional Registration Statement hereunder. To the extent the staff of the SEC does not permit the Additional Required Registration Amount to be registered on an Additional Registration Statement, the Company shall file Additional Registration Statements successively trying to register on each such Additional Registration Statement the maximum number of remaining Additional Registrable Securities until the Additional Required Registration Amount has been registered with the SEC. Each Additional Registration Statement prepared pursuant hereto shall register for resale at least that number of Common Shares equal to the Additional Required Registration Amount determined as of the date such Additional Registration Statement is initially filed with the SEC, subject to adjustment as provided in Section 2(f). The Company shall use its reasonable best efforts to have each Additional Registration Statement declared effective by the SEC as soon as practicable, but in no event later than the Additional Effectiveness Deadline. By 9:30 a.m. New York time on the Business Day following the Additional Effective Date, the Company shall file with the SEC in accordance with Rule 424 under the 1933 Act the final prospectus to be used in connection with sales pursuant to such Additional Registration Statement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Allocation of Registrable Securities</u>. The initial number of Registrable Securities included in any Registration Statement and any increase or decrease in the number of Registrable Securities included therein shall be allocated pro rata among the Investors based on the number of Registrable Securities held by each Investor at the time the Registration Statement covering such initial number of Registrable Securities or increase or decrease thereof is declared effective by the SEC. In the event that an Investor sells or otherwise transfers any of such Investor's Registrable Securities, each transferee shall be allocated a pro rata portion of the then remaining number of Registrable Securities included in such Registration Statement for such transferor. Any Common Shares included in a Registration Statement and which remain allocated to any Person which ceases to hold any Registrable Securities covered by such Registration Statement shall be allocated to the remaining Investors, pro rata based on the number of Registrable Securities then held by such Investors which are covered by such Registration Statement. Notwithstanding anything to the contrary herein, the Company may include its own securities on any Registration

Statement in a primary offering in whatever amounts it deems fit, but may not include any other securities other than Registrable Securities on any Registration Statement in any secondary offering without the prior written consent of the Required Holders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Reserved.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Ineligibility for Form S-3</u>. In the event that Form S-3 is not available for the registration of the resale of Registrable Securities hereunder, the Company shall (i) register the resale of the Registrable Securities on Form S-1 or another appropriate form reasonably acceptable to the Required Holders and (ii) undertake to register the Registrable Securities on Form S-3 as soon as such form is available, provided that the Company shall maintain the effectiveness of the Registration Statement then in effect until such time as a Registration Statement on Form S-3 covering the Registrable Securities has been declared effective by the SEC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Sufficient Number of Shares Registered</u>. In the event the number of shares available under a Registration Statement filed pursuant to Section 2(a) or Section 2(b) is insufficient to cover the Required Registration Amount of Registrable Securities required to be covered by such Registration Statement or an Investor's allocated portion of the Registrable Securities pursuant to Section 2(c), the Company shall amend the applicable Registration Statement, or file a new Registration Statement (on the short form available therefor, if applicable), or both, so as to cover at least the Required Registration Amount as of the Trading Day immediately preceding the date of the filing of such amendment or new Registration Statement, in each case, as soon as practicable, but in any event not later than fifteen (15) days after the necessity therefor arises. The Company shall use its reasonable best efforts to cause such amendment and/or new Registration Statement to become effective as soon as practicable following the filing thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>Effect of Failure to File and Obtain and Maintain Effectiveness of Registration Statement</u>. If (i) the Initial Registration Statement when declared effective fails to register the Initial Required Registration Amount of Initial Registrable Securities (a "**Registration Failure**"),

&nbsp;&nbsp;&nbsp;&nbsp;(ii) a Registration Statement covering all of the Registrable Securities required to be covered thereby and required to be filed by the Company pursuant to this Agreement is (A) not filed with the SEC on or before the applicable Filing Deadline (a "**Filing Failure**") or (B) not declared effective by the SEC on or before the applicable Effectiveness Deadline, (an "**Effectiveness Failure**") or (iii) on any day after the applicable Effective Date sales of all of the Registrable Securities required to be included on such Registration Statement cannot be made (other than during an Allowable Grace Period (as defined in Section 3(r)) pursuant to such Registration Statement or otherwise (including, without limitation, because of the suspension of trading or any other limitation imposed by the Trading Market, a failure to keep such Registration Statement effective, a failure to disclose such information as is necessary for sales to be made pursuant to such Registration Statement, a failure to register a sufficient number of Common Shares or a failure to maintain the listing of the Common Shares) (a "**Maintenance Failure**") then, as partial relief for the damages to any holder by reason of any such delay in or reduction of its ability to sell the underlying Common Shares (which remedy shall not be exclusive of any other remedies available at law or in equity, including, without limitation, specific performance or the additional obligation of the Company to register any Cutback Shares), the Company shall pay to each holder of Registrable Securities relating to such Registration Statement an amount in cash equal to two percent (2.0%) of the aggregate Purchase Price (as such term is defined in the Securities Purchase

Agreement) of such Investor's Registrable Securities whether or not included in such Registration Statement on each of the following dates: (i) the day of a Registration Failure and on each thirtieth Trading Day thereafter (pro-rated for periods totaling less than thirty Trading Days) until such Registration Failure is cured, (ii) the day of a Filing Failure and on each thirtieth Trading Day thereafter (pro-rated for periods totaling less than thirty Trading Days) until such Filing Failure is cured; (iii) the day of an Effectiveness Failure and on each thirtieth Trading Day thereafter (pro- rated for periods totaling less than thirty Trading Days) until such Effectiveness Failure is cured; and (iv) the initial day of a Maintenance Failure and on each thirtieth Trading Day thereafter (pro- rated for periods totaling less than thirty Trading Days) until such Maintenance Failure is cured; provided, that aggregate amount of all Registration Delay Payments to all holders shall not exceed $5,000 per Trading Day and ten percent (10%) of the aggregate Purchase Price (and such reduced amount will be distributed pro rata amongst such holders based on the aggregate Purchase Price), and provided further, that for purposes of this sentence only, "**Trading Day**" shall include only Trading Days on which the SEC's EDGAR system accepts filings. Notwithstanding anything to the contrary contained herein, no Registration Failure, Filing Failure, Effectiveness Failure or Maintenance Failure shall continue to accrue Registration Delay Payments after the end of the Registration Period. For the avoidance of doubt, in the event of a simultaneous occurrence of a Registration Failure, Filing Failure, Maintenance Failure or Effectiveness Failure, the Company shall only be required to make Registration Delay Payments with respect to one such event. The payments to which a holder shall be entitled pursuant to this Section 2(g) are referred to herein as "**Registration Delay Payments**." Registration Delay Payments shall be paid on the earlier of (I) the dates set forth above and (II) the third Business Day after the event or failure giving rise to the Registration Delay Payments is cured. In the event the Company fails to make Registration Delay Payments in a timely manner, such Registration Delay Payments shall bear interest at the rate of one and one-half percent (1.5%) per month (prorated for partial months) until paid in full.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. <u>Related Obligations</u>.

At such time as the Company is obligated to file a Registration Statement with the SEC pursuant to Section 2(a), 2(b), 2(e) or 2(f), the Company will use its reasonable best efforts to effect the registration of the Registrable Securities in accordance with the intended method of disposition thereof and, pursuant thereto, the Company shall have the following obligations:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company shall promptly prepare and file with the SEC a Registration Statement with respect to the Registrable Securities and use its reasonable best efforts to cause such Registration Statement relating to the Registrable Securities to become effective as soon as practicable after such filing (but in no event later than the Effectiveness Deadline). The Company shall keep each Registration Statement effective pursuant to Rule 415 at all times until the earlier of (i) the date as of which the Investors may sell all of the Registrable Securities covered by such Registration Statement without restriction or limitation pursuant to Rule 144 and without the requirement to be in compliance with Rule 144(c)(1) (or any successor thereto) promulgated under the 1933 Act or (ii) the date on which the Investors shall have sold all of the Registrable Securities covered by such Registration Statement (the "**Registration Period**"). The Company shall ensure that each Registration Statement (including any amendments or supplements thereto and prospectuses contained therein) shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein, or necessary to make the statements therein (in the case of prospectuses, in the light of the circumstances in which they were made) not misleading.

The term "best efforts" shall mean, among other things, that the Company shall submit to the SEC, within two (2) Business Days after the Company learns that no review of a particular Registration Statement will be made by the staff of the SEC or that the staff has no further comments on a particular Registration Statement, as the case may be, a request for acceleration of effectiveness of such Registration Statement to a time and date not later than two (2) Business Days after the submission of such request, unless the Company is directed to a submit a request for acceleration of effectiveness of such Registration Statement to a later time and date by the SEC. The Company shall respond in writing to comments made by the SEC in respect of a Registration Statement as soon as practicable, but in no event later than fifteen (15) days after the receipt of comments by or notice from the SEC that an amendment is required in order for a Registration Statement to be declared effective.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Company shall prepare and file with the SEC such amendments (including post-effective amendments) and supplements to a Registration Statement and the prospectus used in connection with such Registration Statement, which prospectus is to be filed pursuant to Rule 424 promulgated under the 1933 Act, as may be necessary to keep such Registration Statement effective at all times during the Registration Period, and, during such period, comply with the provisions of the 1933 Act with respect to the disposition of all Registrable Securities of the Company covered by such Registration Statement until such time as all of such Registrable Securities shall have been disposed of in accordance with the intended methods of disposition by the seller or sellers thereof as set forth in such Registration Statement. In the case of amendments and supplements to a Registration Statement which are required to be filed pursuant to this Agreement (including pursuant to this Section 3(b)) by reason of the Company filing a report on Form 10-K, Form 10-Q or Form 8-K or any analogous report under the Securities Exchange Act of 1934, as amended (the "**1934 Act**"), the Company shall have incorporated such report by reference into such Registration Statement, if applicable, or shall file such amendments or supplements with the SEC on the same day on which the 1934 Act report is filed which created the requirement for the Company to amend or supplement such Registration Statement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Reserved.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Company shall furnish to each Investor whose Registrable Securities are included in any Registration Statement, without charge, (i) promptly after the same is prepared and filed with the SEC, at least one copy of such Registration Statement and any amendment(s) thereto, including financial statements and schedules, all documents incorporated therein by reference, if requested by an Investor, all exhibits and each preliminary prospectus, (ii) upon the effectiveness of any Registration Statement, ten (10) copies of the prospectus included in such Registration Statement and all amendments and supplements thereto (or such other number of copies as such Investor may reasonably request) and (iii) such other documents, including copies of any preliminary or final prospectus, as such Investor may reasonably request from time to time in order to facilitate the disposition of the Registrable Securities owned by such Investor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The Company shall use its reasonable best efforts to (i) register and qualify, unless an exemption from registration and qualification applies, the resale by Investors of the Registrable Securities covered by a Registration Statement under such other securities or "blue sky" laws of all applicable jurisdictions in the United States, (ii) prepare and file in those jurisdictions such amendments (including post-effective amendments) and supplements to such

registrations and qualifications as may be necessary to maintain the effectiveness thereof during the Registration Period, (iii) take such other actions as may be necessary to maintain such registrations and qualifications in effect at all times during the Registration Period, and (iv) take all other actions reasonably necessary or advisable to qualify the Registrable Securities for sale in such jurisdictions; provided, however, that the Company shall not be required in connection therewith or as a condition thereto to (x) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(e), (y) subject itself to general taxation in any such jurisdiction, or (z) file a general consent to service of process in any such jurisdiction. The Company shall promptly notify each Investor who holds Registrable Securities of the receipt by the Company of any notification with respect to the suspension of the registration or qualification of any of the Registrable Securities for sale under the securities or "**blue sky**" laws of any jurisdiction in the United States or its receipt of actual notice of the initiation or threatening of any proceeding for such purpose.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The Company shall notify each Investor in writing of the happening of any event, as promptly as practicable after becoming aware of such event but in any event on the same Trading Day as such event, as a result of which the prospectus included in a Registration Statement, as then in effect, includes an untrue statement of a material fact or omission to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading (provided that in no event shall such notice contain any material, nonpublic information), and, subject to Section 3(r), promptly prepare a supplement or amendment to such Registration Statement to correct such untrue statement or omission, and deliver ten (10) copies of such supplement or amendment to each Investor (or such other number of copies as such Investor may reasonably request). The Company shall also promptly notify each Investor in writing (i) when a prospectus or any prospectus supplement or post-effective amendment has been filed, and when a Registration Statement or any post-effective amendment has become effective (notification of such effectiveness shall be delivered to each Investor by facsimile or email on the same day of such effectiveness and by overnight mail), (ii) of any request by the SEC for amendments or supplements to a Registration Statement or related prospectus or related information and (iii) of the Company's reasonable determination that a post- effective amendment to a Registration Statement would be appropriate. By 9:30 a.m. New York City time on the date following the date any post-effective amendment has become effective, the Company shall file with the SEC in accordance with Rule 424 under the 1933 Act the final prospectus to be used in connection with sales pursuant to such Registration Statement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) The Company shall use its reasonable best efforts to prevent the issuance of any stop order or other suspension of effectiveness of a Registration Statement, or the suspension of the qualification of any of the Registrable Securities for sale in any jurisdiction and, if such an order or suspension is issued, to obtain the withdrawal of such order or suspension at the earliest possible moment and to notify each Investor who holds Registrable Securities being sold of the issuance of such order and the resolution thereof or its receipt of actual notice of the initiation or threat of any proceeding for such purpose.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) If any Investor is required under applicable securities laws to be described in the Registration Statement as an underwriter or an Investor believes that it could reasonably be deemed to be an underwriter of Registrable Securities, at the reasonable request of such Investor, the Company shall furnish to such Investor, on the date of the effectiveness of the Registration

Statement and thereafter from time to time on such dates as an Investor may reasonably request (i) a letter, dated such date, from the Company's independent certified public accountants in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering, addressed to the Investors, and (ii) an opinion, dated as of such date, of counsel representing the Company for purposes of such Registration Statement, in form, scope and substance as is customarily given in an underwritten public offering, addressed to the Investors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) If any Investor is required under applicable securities laws to be described in the Registration Statement as an underwriter or an Investor believes that it could reasonably be deemed to be an underwriter of Registrable Securities, the Company shall make available for inspection by such Investor all pertinent financial and other records, and pertinent corporate documents and properties of the Company (collectively, the "**Records**"), as shall be reasonably deemed necessary by such Investor, and cause the Company's officers, directors and employees to supply all information which any Investor may reasonably request; provided, however, that each Investor shall agree to hold in strict confidence and shall not make any disclosure (except to an Investor) or use of any Record or other information which the Company determines in good faith to be confidential, and of which determination the Investors are so notified, unless (a) the disclosure of such Records is necessary to avoid or correct a misstatement or omission in any Registration Statement or is otherwise required under the 1933 Act, (b) the release of such Records is ordered pursuant to a final, non-appealable subpoena or order from a court or government body of competent jurisdiction, or (c) the information in such Records has been made generally available to the public other than by disclosure in violation of this Agreement. Each Investor agrees that it shall, upon learning that disclosure of such Records is sought in or by a court or governmental body of competent jurisdiction or through other means, give prompt notice to the Company and allow the Company, at its expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, the Records deemed confidential. Nothing herein (or in any other confidentiality agreement between the Company and any Investor) shall be deemed to limit the Investors' ability to sell Registrable Securities in a manner which is otherwise consistent with applicable laws and regulations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) The Company shall hold in confidence and not make any disclosure of information concerning an Investor provided to the Company unless (i) disclosure of such information is necessary to comply with federal or state securities laws, (ii) the disclosure of such information is necessary to avoid or correct a misstatement or omission in any Registration Statement, (iii) the release of such information is ordered pursuant to a subpoena or other final, non-appealable order from a court or governmental body of competent jurisdiction, or (iv) such information has been made generally available to the public other than by disclosure in violation of this Agreement or any other agreement. The Company agrees that it shall, upon learning that disclosure of such information concerning an Investor is sought in or by a court or governmental body of competent jurisdiction or through other means, give prompt written notice to such Investor and allow such Investor, at the Investor's expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, such information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) The Company shall use its reasonable best efforts either to (i) cause all of the Registrable Securities covered by a Registration Statement to be listed on each securities exchange on which securities of the same class or series issued by the Company are then listed, if any, if the

listing of such Registrable Securities is then permitted under the rules of such exchange or (ii) secure the inclusion for quotation of all of the Registrable Securities on the Trading Market or (iii) if, despite the Company's reasonable best efforts, the Company is unsuccessful in satisfying the preceding clauses (i) and (ii), to secure the inclusion for quotation on the Trading Market for such Registrable Securities and, without limiting the generality of the foregoing, to use its reasonable best efforts to arrange for at least two market makers to register with the Financial Industry Regulatory Authority, Inc. as such with respect to such Registrable Securities. The Company shall pay all fees and expenses in connection with satisfying its obligation under this Section 3(k).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) The Company shall cooperate with the Investors who hold Registrable Securities being offered and, to the extent applicable, facilitate the timely preparation and delivery of certificates (not bearing any restrictive legend) representing the Registrable Securities to be offered pursuant to a Registration Statement and enable such certificates to be in such denominations or amounts, as the case may be, as the Investors may reasonably request and registered in such names as the Investors may request.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) If requested by an Investor, the Company shall as soon as practicable (i) incorporate in a prospectus supplement or post-effective amendment such information as an Investor reasonably requests to be included therein relating to the sale and distribution of Registrable Securities, including, without limitation, information with respect to the number of Registrable Securities being offered or sold, the purchase price being paid therefor and any other terms of the offering of the Registrable Securities to be sold in such offering; (ii) make all required filings of such prospectus supplement or post-effective amendment after being notified of the matters to be incorporated in such prospectus supplement or post-effective amendment; and (iii) supplement or make amendments to any Registration Statement if reasonably requested by an Investor holding any Registrable Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) The Company shall use its reasonable best efforts to cause the Registrable Securities covered by a Registration Statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to consummate the disposition of such Registrable Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) The Company shall make generally available to its security holders as soon as practical, but not later than ninety (90) days after the close of the period covered thereby, an earnings statement (in form complying with, and in the manner provided by, the provisions of Rule 158 under the 1933 Act) covering a twelve-month period beginning not later than the first day of the Company's fiscal quarter next following the applicable Effective Date of a Registration Statement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) The Company shall otherwise use its reasonable best efforts to comply with all applicable rules and regulations of the SEC in connection with any registration hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) Within two (2) Business Days after a Registration Statement which covers Registrable Securities is declared effective by the SEC, the Company shall deliver, and shall cause legal counsel for the Company to deliver, to the transfer agent for such Registrable Securities (with copies to the Investors whose Registrable Securities are included in such Registration Statement) confirmation that such Registration Statement has been declared effective by the SEC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r) Notwithstanding anything to the contrary herein, at any time after the Effective Date, the Company may delay the disclosure of material, non-public information concerning the Company the disclosure of which at the time is not, in the good faith opinion of the Board of Directors of the Company and its counsel, in the best interest of the Company and, in the opinion of counsel to the Company, otherwise required (a "**Grace Period**"); provided, that the Company shall promptly (i) notify the Investors in writing of the existence of material, non-public information giving rise to a Grace Period (provided that in each notice the Company will not disclose the content of such material, non-public information to the Investors) and the date on which the Grace Period will begin, and (ii) notify the Investors in writing of the date on which the Grace Period ends; and, provided further, that no Grace Period shall exceed sixty (60) consecutive days and during any three hundred sixty five (365) day period such Grace Periods shall not exceed an aggregate of ninety (90) days and the first day of any Grace Period must be at least five (5) Trading Days after the last day of any prior Grace Period (each, an "**Allowable Grace Period**"). For purposes of determining the length of a Grace Period above, the Grace Period shall begin on and include the date the Investors receive the notice referred to in clause (i) and shall end on and include the later of the date the Investors receive the notice referred to in clause (ii) and the date referred to in such notice. Upon expiration of the Grace Period, the Company shall again be bound by the first sentence of Section 3(f) with respect to the information giving rise thereto unless such material, non-public information is no longer applicable. Notwithstanding anything to the contrary, the Company shall cause its transfer agent to deliver unlegended Common Shares to a transferee of an Investor in accordance with the terms of the Securities Purchase Agreement in connection with any sale of Registrable Securities with respect to which an Investor has entered into a contract for sale, prior to the Investor's receipt of the notice of a Grace Period and for which the Investor has not yet settled.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s) Neither the Company nor any Subsidiary or affiliate thereof shall identify any Investor as an underwriter in any public disclosure or filing with the SEC, the Trading Market and any Investor being deemed an underwriter by the SEC shall not relieve the Company of any obligations it has under this Agreement or any other Transaction Document (as defined in the Securities Purchase Agreement).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t) Neither the Company nor any of its Subsidiaries has entered, as of the date hereof, nor shall the Company or any of its Subsidiaries, on or after the date of this Agreement, enter into any agreement with respect to its securities, that would have the effect of impairing the rights granted to the Buyers in this Agreement or otherwise conflicts with the provisions hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. <u>Obligations of the Investors</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) At least five (5) Business Days prior to the Initial Filing Date of a Registration Statement, the Company shall notify each Investor in writing of the information the Company requires from each such Investor if such Investor elects to have any of such Investor's Registrable Securities included in such Registration Statement. It shall be a condition precedent to the obligations of the Company to complete any registration pursuant to this Agreement with respect to the Registrable Securities of a particular Investor that such Investor shall furnish to the Company such information regarding itself, the Registrable Securities held by it and the intended method of disposition of the Registrable Securities held by it as shall be reasonably required to effect and

maintain the effectiveness of the registration of such Registrable Securities and shall execute such documents in connection with such registration as the Company may reasonably request.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Each Investor, by such Investor's acceptance of the Registrable Securities, agrees to cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing of any Registration Statement hereunder, unless such Investor has notified the Company in writing of such Investor's election to exclude all of such Investor's Registrable Securities from such Registration Statement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Each Investor agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in the first sentence of Section 3(f), such Investor will immediately discontinue disposition of Registrable Securities pursuant to any Registration Statement(s) covering such Registrable Securities until such Investor's receipt of copies of the supplemented or amended prospectus as contemplated by the first sentence of Section 3(f) or receipt of notice that no supplement or amendment is required. Notwithstanding anything to the contrary, the Company shall cause its transfer agent to deliver unlegended Common Shares to a transferee of an Investor in accordance with the terms of the Securities Purchase Agreement in connection with any sale of Registrable Securities with respect to which an Investor has entered into a contract for sale prior to the Investor's receipt of a notice from the Company of the happening of any event of the kind described in the first sentence of Section 3(f) and for which the Investor has not yet settled.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Each Investor covenants and agrees that it will comply with the prospectus delivery requirements of the 1933 Act as applicable to it or an exemption therefrom in connection with sales of Registrable Securities pursuant to the Registration Statement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. <u>Expenses of Registration</u>.

All reasonable expenses, other than underwriting discounts and commissions, incurred in connection with registrations, filings or qualifications pursuant to Sections 2 and 3, including, without limitation, all registration, listing and qualifications fees, printers and accounting fees, and fees and disbursements of counsel for the Company shall be paid by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. <u>Indemnification</u>.

In the event any Registrable Securities are included in a Registration Statement under this Agreement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) To the fullest extent permitted by law, the Company will, and hereby does, indemnify, hold harmless and defend each Investor, the directors, officers, partners, members, employees, agents, representatives of, and each Person, if any, who controls any Investor within the meaning of the 1933 Act or the 1934 Act (each, an "**Indemnified Person**"), against any losses, claims (including causes of action, suits or claims asserted directly by or between an Indemnitee and the Company), damages, liabilities, judgments, fines, penalties, charges, costs, reasonable attorneys' fees, amounts paid in settlement or expenses, joint or several (collectively, "**Claims**"), incurred in investigating, preparing or defending any action, claim, suit, inquiry, proceeding, investigation or appeal taken from the foregoing by or before any court or governmental,

administrative or other regulatory agency, body or the SEC, whether pending or threatened, whether or not an indemnified party is or may be a party thereto ("**Indemnified Damages**"), to which any of them may become subject insofar as such Claims (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon: (i) any untrue statement or alleged untrue statement of a material fact in a Registration Statement or any post- effective amendment thereto or in any filing made in connection with the qualification of the offering under the securities or other "blue sky" laws of any jurisdiction in which Registrable Securities are offered, or the omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus if used prior to the Effective Date of such Registration Statement, or contained in the final prospectus (as amended or supplemented, if the Company files any amendment thereof or supplement thereto with the SEC) or the omission or alleged omission to state therein any material fact necessary to make the statements made therein, in light of the circumstances under which the statements therein were made, not misleading, (iii) any violation or alleged violation by the Company of the 1933 Act, the 1934 Act, any other law, including, without limitation, any state securities law, or any rule or regulation thereunder relating to the offer or sale of the Registrable Securities pursuant to a Registration Statement or (iv) any violation of this Agreement (the matters in the foregoing clauses (i) through (iv) being, collectively, "**Violations**"). Subject to Section 6(c), the Company shall reimburse the Indemnified Persons, promptly as such expenses are incurred and are due and payable, for any legal fees or other reasonable expenses incurred by them in connection with investigating or defending any such Claim. Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section 6(a): (i) shall not apply to a Claim by an Indemnified Person arising out of or based upon a Violation which occurs in reliance upon and in conformity with information furnished in writing to the Company by such Indemnified Person expressly for use in connection with the preparation of the Registration Statement or any such amendment thereof or supplement thereto, if such prospectus was timely made available by the Company pursuant to Section 3(d); (ii) shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of the Company, which consent shall not be unreasonably withheld or delayed ; and (iii) shall not apply to amounts paid in settlement of any direct Claim by or between an Indemnitee and the Company. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Indemnified Person and shall survive the transfer of the Registrable Securities by the Investors pursuant to Section 9.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) In connection with any Registration Statement in which an Investor is participating, each such Investor agrees to severally and not jointly indemnify, hold harmless and defend, to the same extent and in the same manner as is set forth in Section 6(a), the Company, each of its directors, each of its officers who signs the Registration Statement and each Person, if any, who controls the Company within the meaning of the 1933 Act or the 1934 Act (each, an "**Indemnified Party**"), against any Claim or Indemnified Damages to which any of them may become subject, under the 1933 Act, the 1934 Act or otherwise, insofar as such Claim or Indemnified Damages arise out of or are based upon any Violation, in each case to the extent, and only to the extent, that such Violation occurs in reliance upon and in conformity with written information furnished to the Company by such Investor expressly for use in connection with such Registration Statement; and, subject to Section 6(c), such Investor shall reimburse the Indemnified Party for any legal or other expenses reasonably incurred by an Indemnified Party in connection

with investigating or defending any such Claim; provided, however, that the indemnity agreement contained in this Section 6(b) and the agreement with respect to contribution contained in Section 7 shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of such Investor, which consent shall not be unreasonably withheld or delayed; provided, further, however, that the Investor shall be liable under this Section 6(b) for only that amount of a Claim or Indemnified Damages as does not exceed the net proceeds to such Investor as a result of the sale of Registrable Securities pursuant to such Registration Statement. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such Indemnified Party and shall survive the transfer of the Registrable Securities by the Investors pursuant to Section 9.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Promptly after receipt by an Indemnified Person or Indemnified Party under this Section 6 of notice of the commencement of any action or proceeding (including any governmental action or proceeding) involving a Claim, such Indemnified Person or Indemnified Party shall, if a Claim in respect thereof is to be made against any indemnifying party under this Section 6, deliver to the indemnifying party a written notice of the commencement thereof, and, except in the case of a direct Claim, for which the remainder of this Section 6(c) shall not apply, the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume control of the defense thereof with counsel mutually satisfactory to the indemnifying party and the Indemnified Person or the Indemnified Party, as the case may be; provided, however, that an Indemnified Person or Indemnified Party shall have the right to retain its own counsel with the fees and expenses of not more than one counsel for all such Indemnified Person or Indemnified Party to be paid by the indemnifying party, if, in the reasonable opinion of counsel retained by the Indemnified Person or Indemnified Party, as applicable, the representation by such counsel of the Indemnified Person or Indemnified Party, as the case may be, and the indemnifying party would be inappropriate due to actual differing interests between such Indemnified Person or Indemnified Party and any other party represented by such counsel in such proceeding. In the case of an Indemnified Person, legal counsel referred to in the immediately preceding sentence shall be selected by the Investors holding at least a majority in interest of the Registrable Securities included in the Registration Statement to which the Claim relates. The Indemnified Party or Indemnified Person shall reasonably cooperate with the indemnifying party in connection with any negotiation or defense of any such action or Claim by the indemnifying party and shall furnish to the indemnifying party all information reasonably available to the Indemnified Party or Indemnified Person which relates to such action or Claim. The indemnifying party shall keep the Indemnified Party or Indemnified Person fully apprised at all times as to the status of the defense or any settlement negotiations with respect thereto. No indemnifying party shall be liable for any settlement of any action, claim or proceeding effected without its prior written consent, provided, however, that the indemnifying party shall not unreasonably withhold, delay or condition its consent. No indemnifying party shall, without the prior written consent of the Indemnified Party or Indemnified Person, consent to entry of any judgment or enter into any settlement or other compromise which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party or Indemnified Person of a release from all liability in respect to such Claim or litigation and such settlement shall not include any admission as to fault on the part of the Indemnified Party or Indemnified Person. Following indemnification as provided for hereunder, the indemnifying party shall be subrogated to all rights of the Indemnified Party or Indemnified Person with respect to all third parties, firms or corporations relating to the matter for

which indemnification has been made. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action shall not relieve such indemnifying party of any liability to the Indemnified Person or Indemnified Party under this Section 6, except to the extent that the indemnifying party is prejudiced in its ability to defend such action by such lack of notice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The indemnification required by this Section 6 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or Indemnified Damages are incurred.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The indemnity agreements contained herein shall be in addition to (i) any cause of action or similar right of the Indemnified Party or Indemnified Person against the indemnifying party or others, and (ii) any liabilities the indemnifying party may be subject to pursuant to the law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. <u>Contribution</u>.

To the extent any indemnification by an indemnifying party is prohibited or limited by law, the indemnifying party agrees to make the maximum contribution with respect to any amounts for which it would otherwise be liable under Section 6 to the fullest extent permitted by law; provided, however, that: (i) no Person involved in the sale of Registrable Securities which Person is guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) in connection with such sale shall be entitled to contribution from any Person involved in such sale of Registrable Securities who was not guilty of fraudulent misrepresentation; and (ii) contribution by any seller of Registrable Securities shall be limited in amount to the amount of net proceeds received by such seller from the sale of such Registrable Securities pursuant to such Registration Statement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. <u>Reports Under the 1934 Act</u>.

With a view to making available to the Investors the benefits of Rule 144 promulgated under the 1933 Act or any other similar rule or regulation of the SEC that may at any time permit the Investors to sell securities of the Company to the public without registration ("**Rule 144**"), the Company agrees to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) cure any ineligibility as provided in Rule 144(i)(1) by fulfilling Rule 144(i)(2);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) make and keep public information available, as those terms are understood and defined in Rule 144;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) file with the SEC in a timely manner all reports and other documents required of the Company under the 1933 Act and the 1934 Act so long as the Company remains subject to such requirements and the filing of such reports and other documents is required for the applicable provisions of Rule 144; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) furnish to each Investor so long as such Investor owns Registrable Securities, promptly upon request, (i) a written statement by the Company, if true, that it has complied with the reporting requirements of Rule 144, the 1933 Act and the 1934 Act, (ii) a copy of the most

recent annual or quarterly report of the Company and such other reports and documents so filed by the Company and (iii) such other information as may be reasonably requested to permit the Investors to sell such securities pursuant to Rule 144 without registration.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. <u>Assignment of Registration Rights</u>.

The rights under this Agreement shall be automatically assignable by the Investors to any transferee of all or any portion of such Investor's Registrable Securities if: (i) the Investor agrees in writing with the transferee or assignee to assign such rights, and a copy of such agreement is furnished to the Company within a reasonable time after such assignment; (ii) the Company is, within a reasonable time after such transfer or assignment, furnished with written notice of (a) the name and address of such transferee or assignee, and (b) the securities with respect to which such registration rights are being transferred or assigned; (iii) immediately following such transfer or assignment the further disposition of such securities by the transferee or assignee is restricted under the 1933 Act or applicable state securities laws; (iv) at or before the time the Company receives the written notice contemplated by clause (ii) of this sentence the transferee or assignee agrees in writing with the Company to be bound by all of the provisions contained herein; and (v) such transfer shall have been made in accordance with the applicable requirements of the Securities Purchase Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. <u>Amendment of Registration Rights</u>.

Provisions of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the Required Holders. Any amendment or waiver effected in accordance with this Section 10 shall be binding upon each Investor and the Company. No such amendment shall be effective to the extent that it applies to less than all of the holders of the Registrable Securities. No consideration shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of this Agreement unless the same consideration (other than the reimbursement of legal fees) also is offered to all of the parties to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. <u>Miscellaneous</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) A Person is deemed to be a holder of Registrable Securities whenever such Person owns or is deemed to own of record such Registrable Securities. If the Company receives conflicting instructions, notices or elections from two or more Persons with respect to the same Registrable Securities, the Company shall act upon the basis of instructions, notice or election received from such record owner of such Registrable Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon delivery, when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party), (iii) upon delivery, when sent by electronic mail (provided that the sending party does not receive an automated rejection notice); or (iv) one Business Day after deposit with a nationally recognized overnight delivery service, in each case properly addressed

to the party to receive the same. The addresses, facsimile numbers and e-mail addresses for such communications shall be:

If to the Company:

Favo Capital, Inc.

4300 N. University Drive Suite D-105 Lauderhill, Florida 33351 Attn: Shaun Quin

E-mail: info@favocap.com

With a copy (for informational purposes only) to: The Doney Law Firm

4955 S. Durango Rd. Ste 165

Las Vegas, NV 89113 Attn: Scott Doney

E-mail: xxxxx@xxxxxxxxx.com

If to a Buyer, to its address, facsimile number or email address set forth on the Schedule of Buyers attached hereto, with copies to such Buyer's representatives as set forth on the Schedule of Buyers, or to such other address, facsimile number and/or email address to the attention of such other Person as the recipient party has specified by written notice given to each other party five (5) days prior to the effectiveness of such change. Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver or other communication, (B) mechanically or electronically generated by the sender's facsimile machine or e-mail transmission containing the time, date, recipient facsimile number or e-mail address and an image of the first page of such transmission or (C) provided by a courier or overnight courier service shall be rebuttable evidence of personal service, receipt by facsimile or receipt from a nationally recognized overnight delivery service in accordance with clause (i), (ii) or (iii) above, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Failure of any party to exercise any right or remedy under this Agreement or otherwise, or delay by a party in exercising such right or remedy, shall not operate as a waiver thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices

to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. **EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE**, **AND AGREES NOT TO REQUEST**, **A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) If any provision of this Agreement is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect the validity of the remaining provisions of this Agreement so long as this Agreement as so modified continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) This Agreement, the other Transaction Documents (as defined in the Securities Purchase Agreement) and the instruments referenced herein and therein constitute the entire agreement among the parties hereto with respect to the subject matter hereof and thereof. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein and therein. This Agreement, the other Transaction Documents and the instruments referenced herein and therein supersede all prior agreements and understandings among the parties hereto with respect to the subject matter hereof and thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Subject to the requirements of Section 9, this Agreement shall inure to the benefit of and be binding upon the permitted successors and assigns of each of the parties hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) This Agreement may be executed in identical counterparts, each of which shall be deemed an original but all of which shall constitute one and the same agreement. This Agreement, once executed by a party, may be delivered to the other party hereto by facsimile transmission of a copy of this Agreement bearing the signature of the party so delivering this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as any other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) All consents and other determinations required to be made by the Investors pursuant to this Agreement shall be made, unless otherwise specified in this Agreement, by the Required Holders, determined as if all of the Warrants held by Investors then outstanding have been exercised for Registrable Securities without regard to any limitations on exercise of the Warrants.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent and no rules of strict construction will be applied against any party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) The obligations of each Investor hereunder are several and not joint with the obligations of any other Investor, and no provision of this Agreement is intended to confer any obligations on any Investor vis-à-vis any other Investor. Nothing contained herein, and no action taken by any Investor pursuant hereto, shall be deemed to constitute the Investors as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Investors are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated herein.

**\* \* \* \* \* \***

**[Signature Page Follows]**

**IN WITNESS WHEREOF**, each Buyer and the Company have caused their respective signature page to this Registration Rights Agreement to be duly executed as of the date first written above.

---

| |
|:---|
| **COMPANY:**<br>|
| **FAVO CAPITAL**, **INC**. |

---

By: <u>/s/</u>_______________

Name: Vincent Napolitano

Title: Chief Executive Officer

[Signature Page to Registration Rights Agreement]

## Exhibit 10.4

**EMPLOYMENT AGREEMENT**

This Employment Agreement (the "Agreement") entered into August 20<sup>th</sup>, 2024 with its effective date as of June 01<sup>st</sup>, 2023 by and between Favo Capital, Inc., a Nevada corporation (the "Company"), and Vincent Napolitano ("Executive").

**<u>RECITALS</u>**

The Company is in business from December 1999. The Company desires to employ Executive, and the Executive desires to accept such employment, on the terms and subject to the conditions set forth in this Agreement.

In consideration of the mutual promises set forth in this Agreement the parties hereto agree as follows:

**<u>ARTICLE I</u>**

**<u>Term of Employment</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.01 Subject to the provisions of Article V, and upon the terms and subject to the conditions set forth in this Agreement, the Company will employ Executive for the period beginning on the date first written above (the "Commencement Date") and ending on 31<sup>st</sup> May, 2028 (the "Initial Term"). The Initial Term shall be automatically renewed for up to two (2) successive consecutive one (1) year periods (each, a "Renewal Term" and the Initial Term and Renewal Term are collectively referred to as the "term of employment") thereafter unless either party sends notice to the other party, not more than 270 days and not less than 90 days before the end of the then-existing term of employment, of such party's desire to terminate the Agreement at the end of the then-existing term, in which case this Agreement will terminate at the end of the then-existing term. The parties understand and acknowledge that if Executive remains employed by the Company after the end of the last Renewal Term, then such employment shall be "at-will" unless this Agreement is extended, or different terms are established, by the parties in writing.

**<u>ARTICLE II</u>**

**<u>Duties</u>**

2.01(a) During the term of employment, Executive will:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Promote the interests, within the scope of his duties, of the Company and devote his time and efforts to the Company's business and affairs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Serve as Chief Executive Officer of the Company, reporting directly to the Company's Board of Directors (the "Board"); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Perform the duties and services consistent with the title and function of such office, including without limitation, those as specifically set forth from time to time by the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Notwithstanding anything contained in clause 2.01(a)(i) above to the contrary, nothing contained herein or under law shall be construed as preventing Executive from (i) investing Executive's personal time and assets in such form or manner as they see fit. The Executive may perform services and devote time to other business interests, represent other companies as a director or Shareholder, sit as a Board member of other private and public companies and participate in Syndication or Direct funding opportunities with the company through its current business activities as approved by the Board of Directors of the Company.

**<u>ARTICLE III</u>**

**<u>Base Compensation</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.01 The Company will compensate Executive for the duties performed by him hereunder by payment of a base salary at a rate of Eight Thousand Nine Hundred and Eighty- Five ($8,395.00) payable bi-weekly via W2 Payroll from Favo Group Human Resources the HR Division of Favo Capital, Inc. (the "Base"), subject to customary withholding for federal, state, and local taxes and other normal and customary withholding items.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.02 <u>Bonus</u>. The Company will develop a Bonus/ Incentive based program to be rolled out from January 01<sup>st</sup>, 2025, of which the Executive will be liable to participate.

**<u>ARTICLE IV</u>**

**<u>Reimbursement and Employment Benefits</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.01 <u>Health and Other Medical</u>. Executive shall be eligible to participate in all health, medical, dental, and life insurance employee benefits as are available from time to time to other key executive employees (and their families) of the Company, including a Life Insurance Plan, Medical and Dental Insurance Plan, and a Long-Term Disability Plan (the "Plans"). This will cover 100% of "ALL" medical expenses, in and out of network costs, co-pays, medication costs and any other medically related costs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.02 <u>Vacation</u>. Executive shall be entitled to three (3 weeks of vacation, to be taken in such amounts and at such times as shall be mutually convenient for Executive and the Company. Any time not taken by Executive in one year shall be forfeited and not carried forward to subsequent years. Executive shall not be entitled to be reimbursed for any unused vacation or personal time, except as may be required under law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.03 <u>Equity</u>. The parties agree that any tax issues, or payments that are due to the IRS or comparable foreign entity as a result of issuance of the equity to Executive, are the sole responsibility of Executive. Executive understands that its own obligation to consult with and take his own independent tax advice on this matter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Restricted Shares</u>. Executive will be issued an agreed number of restricted shares of common stock in the Company annually as agreed to by the Board of Directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Incentive Plan Shares</u>. In addition to the issuance of restricted shares in Section 4.03(a) above, Executive will be eligible to participate in the Company's 2024 Incentive Plan,

where executive may be issued equity in the Company, as determined by and within the sole discretion of the Board of Directors of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.04 <u>Reimbursable Expenses</u>. The Company shall in accordance with its standard policies in effect from time to time reimburse Executive for all reasonable out-of-pocket expenses actually incurred by him in the conduct of the business of the Company provided that Executive submits all substantiation of such expenses to the Company on a timely basis in accordance with such standard policies, ie. Meals & Entertainment allowance, not exceeding the previous year's tax filed expenses, motor vehicle allowance not exceeding $2,000 per month, "ALL" vehicle expenses are over and above the allowance. Including but not limited to - Insurance, Repairs and Maintenance, Fuel/ Gas and Tires.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.05 <u>Savings Plan</u>. Executives will be eligible to enroll and participate, and be immediately vested in, all Company savings and retirement plans, including any 401(k) plans, as are available from time to time to other key executive employees.

**<u>ARTICLE V</u>**

**<u>Termination</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.01 <u>General Provisions</u>. Except as otherwise provided in this Article V, at such time as Executive's employment is terminated by the Executive or the Company, any and all of the Company's obligations under this Agreement shall terminate, other than the Company's obligation to pay Executive, within thirty (30) days of Executive's termination of employment, the full amount of any unpaid Base and accrued but unpaid benefits, including any vacation pay, earned by Executive pursuant to this Agreement through and including the date of termination and to observe the terms and conditions of any plan or benefit arrangement which, by its terms, survives such termination of Executive's employment. The payments to be made under this Section 5.01 shall be made to Executive, or in the event of Executive's death, to such beneficiary as Executive may designate in writing to the Company for that purpose, or if Executive has not so designated, then to the spouse of Executive, or if none is surviving, then to the personal representative of the estate of Executive. Notwithstanding the foregoing, termination of employment shall not affect the obligations of Executive under Article VI hereof that, pursuant to the express provisions of this Agreement, continue in full force and effect. Upon termination of employment with the Company for any reason, Executive shall promptly deliver to the Company all Company property including without limitation all writings, records, data, memoranda, contracts, orders, sales literature, price lists, client lists, data processing materials, and other documents, whether or not obtained from the Company or any Affiliate, which pertain to or were used by Executive in connection with his employment by the Company or which pertain to any Affiliate, including, but not limited to, Confidential Information, as well as any automobiles, computers or other furniture, fixtures or equipment which were purchased by the Company for Executive or otherwise in Executive's possession or control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.02 <u>Automatic Termination</u>. This Agreement shall be automatically terminated upon the first to occur of the following (a) the expiration of this Agreement in accordance with Section

&nbsp;&nbsp;&nbsp;&nbsp;1.01 hereof, (b) the Company's termination pursuant to section 5.03, (c) the Executive's termination pursuant to section 5.04 or (d) the Executive's death.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.03 <u>By the Company</u>. This Agreement may be terminated by the Company upon written notice to the Executive upon the first to occur of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Disability</u>. Upon the Executive's Disability (as defined herein). The term "Disability" shall mean, in the sole determination of the Company's Board, whose determination shall be final and binding, the reasonable likelihood that the Executive will be unable to perform his duties and responsibilities to the Company by reason of a physical or mental disability or infirmity for either: (i) a continuous period of four months; or (ii) 180 days during any consecutive twelve (12) month period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Cause</u>. Upon the Executive's commission of Cause (as defined herein). The term "Cause" shall mean the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Any violation by Executive of any material provision of this Agreement (including without limitation any violation of any provision of Sections 6.01, 6.02 or 6.03 hereof any and all of which are material in all respects), upon notice of same by the Company describing in detail the breach asserted and stating that it constitutes notice pursuant to this Section 5.03(b)(i), which breach, if capable of being cured, has not been cured to the Company's sole and absolute satisfaction within 30 days after such notice (except for breaches of any provisions of sections 6.01, 6.02 or 6.03 which are not subject to cure or any notice);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Embezzlement by Executive of funds or property of the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Habitual absenteeism, bad faith, fraud, refusal to perform his duties, gross negligence or willful misconduct on the part of Executive in the performance of his duties as an employee of the Company, provided that the Company has given written notice of and an opportunity of not less than 30 days to cure such breach, which notice describes in detail the breach asserted and stating that it constitutes notice pursuant to this Section 5.03(b)(iii), provided that no such notice or opportunity needs to be given if (x) in the judgment of the Company's Board of Directors, such conduct is habitual or would unnecessarily or unreasonably expose the Company to undue risk or harm or (y) one previous notice had already been given under this section or under section (i) above; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) a felonious act, conviction, or plea of nolo contendere of Executive under the laws of the United States or any state (except for any conviction or plea based on a vicarious liability theory and not the actual conduct of the Executive).

\*NOTE - If the Company terminates the Executive for any reason other than stated in this agreement from section 5.01, 5.02 and 5.03, the Company will be liable to reimburse the Executive for the balance of the term of this agreement as per Base Compensation plus benefits agreed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.04 <u>By the Executive</u>. This Agreement may be terminated by the Executive upon written notice to the Company upon the first to occur of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Change in Control</u>. Within six (6) months after a "Change in Control" (as defined herein) of the Company (unless Executive is not offered a position in the buying or succeeding owner with equal or better economic terms as this Agreement). The term "Change in Control" shall be deemed to have occurred at such time as (i) any person or entity (or person or entities which are affiliated or acting as a group or otherwise in concert) is or becomes the beneficial owner, directly or indirectly, of securities representing 50% or more of the combined voting power for election of directors of the then outstanding securities of the Company (other than stockholders which own greater than fifty percent (50%) of the stock of the Company as of the effective date of this Agreement); (ii) the shareholders of the Company approve any merger or consolidation as a result of which its membership interests shall be changed, converted, or exchanged (other than a merger with a wholly-owned subsidiary of the Company) or any liquidation of the Company or any sale or other disposition of all or substantially all of the assets or earning power of the Company; or (iii) the shareholders of the Company approve any merger or consolidation to which the Company is a party as a result of which the persons who were members of the Company immediately before the effective date of the merger or consolidation shall have beneficial ownership of less than 50% of the combined voting power for election of directors or the equivalent of the surviving corporation following the effective date of such merger or consolidation; provided, however, that no Change in Control shall be deemed to have occurred as a result of the sale or transfer of membership interests of the Company to an employee benefit plan sponsored by the Company or an affiliate thereof or if the new employer offers to employ the Executive on substantially the same terms and conditions as set forth in this Agreement (except that the Base shall not be reduced below the then-existing Base).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Constructive Termination</u>. Upon the occurrence of a "Constructive Termination" (as defined herein) by the Company. The term "Constructive Termination" shall mean any of the following: any breach by the Company of any material provision of this Agreement, including, without limitation, the assignment to the Executive of duties inconsistent with his position specified in Section 2.01 hereof or any breach by the Company of such Section, which is not cured within 60 days after written notice of same by Executive, describing in detail the breach asserted and stating that it constitutes notice pursuant to this Section 5.04.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Voluntary Termination</u>. Executive's resignation for reasons other than as specified in Section 5.04(a) and (b).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.05 <u>Consequences of Termination</u>. Upon any termination of Executive's employment with the Company, except for a termination by the Company for Cause as provided in Section 5.03(b) hereof or for a termination by the Executive pursuant to Section 5.04(c) hereof, the Executive shall be entitled to (a) a payment equal to the length of the remaining term hereof worth of the then-existing Base (the "Severance") and (b) retain the benefits set forth in Article IV for the lesser of the length of the remaining term hereof. The Severance shall be paid, at Company's option, either (x) in a lump sum upon termination with such payments discounted by the U.S. Treasury rate most closely comparable to the applicable time period left in the Agreement or (y) as and when normal payroll payments are made. Executive expressly acknowledges and agrees that the payment of Severance to Executive hereunder shall be liquidated damages for and in full satisfaction of any and all claims Executive may have relating to or arising out of Executive's employment or termination of Executive's employment by the

Company or relating to or arising out of this Agreement and the termination thereof, including, without limitation, those causes of action arising under the Age Discrimination in Employment Act of 1967, as amended, 29 U.S.C. §621 *et seq.,* Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. §2000e *et seq.,* the Americans with Disabilities Act of 1990, as amended, 42 U.S.C. §12101 *et seq.*, the Fair Labor Standards Act of 1938, as amended, 29 U.S.C. §201 *et seq.,* the Civil Rights Act of April 9, 1866.1 42 U.S.C. §1981 *et seq.,* the National Labor Management Relations Act, 29 U.S.C. §141 *et seq.,* the Occupational Safety and Health Act, 29 U.S.C. §651 *et seq.,* and the Family Medical Leave Act of 1993, 29 U.S.C. §2601 *et seq.* Notwithstanding the foregoing, Executive's right to receive Severance Pay is contingent upon Executive not violating any of his on-going obligations under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.06 <u>Representations</u>. Executive represents, warrants, and covenants to Company that (a) there is no other agreement or relationship which is binding on him which prevents him from entering into or performing under the terms hereof and (b) the Company may contact any past, present, or future entity with whom he has a business relationship and inform such entity of the existence of this Agreement and the terms and conditions set forth herein.

**<u>ARTICLE VI</u>**

**<u>Covenants</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.01 <u>Solicitation</u>. (a) During the period in which Executive performs services for the Company and for a period of three (3) months after termination of Executive's employment with the Company, regardless of the reason, Executive hereby covenants and agrees that he shall not, directly or indirectly, except in connection with his duties hereunder or otherwise for the sole account and benefit of the Company, whether as a sole proprietor, partner, member, shareholder, employee, director, officer, guarantor, consultant, independent contractor, or in any other capacity as principal or agent, or through any person, subsidiary, affiliate, or employee acting as nominee or agent, except with the consent of the Company:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Solicit, attempt to solicit, or accept business from, or cause to be solicited or have business accepted from, any then-current customers of Company, any persons or entities who were customers of the Company within the three (3) months preceding the Termination Date, or any prospective customers of the Company for whom bids were being prepared or had been submitted as of the Termination Date; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Induce, or attempt to induce, hire or attempt to hire, or cause to be induced or hired, any employee of the Company, or persons who were employees of the Company within the three (3) months preceding the Termination Date, to leave or terminate his or her employment with the Company, or hire or engage as an independent contractor any such employee of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Notwithstanding the foregoing, Executive shall not be prevented from (i) investing in or owning up to sixty five percent (65%) of the outstanding stock of any corporation engaged in any business provided that such shares are regularly traded on a national securities exchange or in any over-the-counter market or (ii) retaining any shares of stock in any corporation which Executive owned before the date of his employment with the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.02 <u>Confidential Information</u>. Executive acknowledges that in his employment he is or will be making use of, acquiring, or adding to the Company's confidential information which includes, but is not limited to, memoranda and other materials or records of a proprietary nature; technical information regarding the operations of the Company; and records and policy matters relating to finance, personnel, market research, strategic planning, current and potential customers, lease arrangements, service contracts, management, and operations. Therefore, to protect the Company's confidential information and to protect other employees who depend on the Company for regular employment, Executive agrees that he will not in any way use any of said confidential information except in connection with his employment by the Company, and except in connection with the business of the Company he will not copy, reproduce, or take with him the original or any copies of said confidential information and will not directly or indirectly divulge any of said confidential information to anyone without the prior written consent of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.03 <u>Inventions</u>. All discoveries, designs, and inventions, whether patentable or not, relating to (or suggested by or resulting from) products, services of the Company or any Affiliate or relating to (or suggested by or resulting from) methods or processes used or usable in connection with the business of the Company or any Affiliate that may be conceived, developed, or made by Executive during employment with the Company (hereinafter "Inventions"), either solely or jointly with others, shall automatically become the sole property of the Company or an Affiliate. Executive shall immediately disclose to the Company all such Inventions and shall, without additional compensation, execute all assignments and other documents deemed necessary to perfect the property rights of the Company or any Affiliate therein. These obligations shall continue beyond the termination of Executive's employment with respect to Inventions conceived, developed, or made by Executive during employment with the Company. The provisions of this Section 6 shall not apply to any Invention for which no equipment, supplies, facility, or trade secret information of the Company or any Affiliate is used by Executive and which is developed entirely on Executive's own time, unless (a) such Invention relates (i) to the actual or demonstrably anticipated research or development of the Company or an Affiliate, or (b) such Invention results from work performed by Executive for the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.04 <u>non-Disparagement</u>. For a period commencing on the date hereof and continuing indefinitely, Executive hereby covenants and agrees that he shall not, directly or indirectly, defame, disparage, create false impressions, or otherwise put in a false or bad light the Company, its products or services, its business, reputation, practices, past or present employees or otherwise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.05 <u>Blue Penciling</u>. If at the time of enforcement of any provision of this Agreement, a court shall hold that the duration, scope, or area restriction of any provision hereof is unreasonable under circumstances now or then existing, the parties hereto agree that the maximum duration, scope or area reasonable under the circumstances shall be substituted by the court for the stated duration, scope, or area.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.06 <u>Remedies</u>. Executive acknowledges that any breach by him of the provisions of this Article VI of this Agreement shall cause irreparable harm to the Company and that a remedy

at law for any breach or attempted breach of Article VI of this Agreement will be inadequate, and agrees that the Company shall be entitled to exercise all remedies available to it, including specific performance and injunctive and other equitable relief, without the necessity of posting any bond, in the case of any such breach or attempted breach.

**<u>ARTICLE VII</u>**

**<u>Assignment</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.01 This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the Company and shall relieve the Company of its obligations hereunder if the assignment is pursuant to a Change in Control. Neither this Agreement nor any rights hereunder shall be assignable by Executive and any such purported assignment by him shall be void.

**<u>ARTICLE VIII</u>**

**<u>Entire Agreement</u>**

This Agreement constitutes the entire understanding between the Company and Executive concerning his employment by the Company or subsidiaries and supersedes any and all previous agreements between Executive and the Company or any of its affiliates or subsidiaries concerning such employment, and/or any compensation, bonuses or incentives. Each party hereto shall pay its own costs and expenses (including legal fees) except as otherwise expressly provided herein incurred in connection with the preparation, negotiation, and execution of this Agreement. This Agreement may not be changed orally, but only in a written instrument signed by both parties hereto.

**<u>ARTICLE IX</u>**

**<u>Applicable Law; Miscellaneous</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.01 <u>Governing Law</u>. This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada. All actions brought to interpret or enforce this Agreement shall be brought in federal or state courts located in Nevada.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.02 <u>Attorneys' Fees</u>. In addition to all other rights and benefits under this Agreement, each party agrees to reimburse the other for, and indemnify and hold harmless such party against, all costs and expenses (including attorney's fees) incurred by such party (whether or not during the term of this Agreement or otherwise), if and to the extent that such party prevails on or is otherwise successful on the merits with respect to any action, claim or dispute relating in any manner to this Agreement or to any termination of this Agreement or in seeking to obtain or enforce any right or benefit provided by or claimed under this Agreement, taking into account the relative fault of each of the parties and any other relevant considerations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.03 <u>Indemnification of Executive</u>. The Company shall indemnify and hold harmless Executive to the full extent authorized or permitted by law with respect to any claim, liability, action, or proceeding instituted or threatened against or incurred by Executive or his legal representatives and arising in connection with Executive's conduct or position at any time as a director, officer, employee, or agent of the Company or any subsidiary thereof. The Company

shall not change, modify, alter, or in any way limit the existing indemnification and reimbursement provisions relating to and for the benefit of its directors and officers without the prior written consent of the Executive, including any modification or limitation of any directors and officers' liability insurance policy.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.04 <u>Waiver</u>. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a continuing waiver or a waiver of any similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party hereto which are not set forth expressly in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.05 <u>Unenforceability</u>. The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.06 <u>Counterparts</u>. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original and all of which together shall constitute one and the same instrument.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.07 <u>Section Headings</u>. The section headings contained in this Agreement are inserted for reference purposes only and shall not affect the meaning or interpretation of this Agreement.

**IN WITNESS WHEREOF**, the parties have executed this Agreement as of the date first written above.

**FAVO CAPITAL, INC.**

By: <u>/s/ Shaun Quin</u>

Name: Shaun Quin

Its: President and Director

**EXECUTIVE**

<u>/s/ Vincent Napolitano</u>

Vincent Napolitano

**DIRECTOR**

<u>/s/ Glen Steward</u> 

Glen Steward

## Exhibit 10.5

**EMPLOYMENT AGREEMENT**

This Employment Agreement (the "Agreement") entered into August 20<sup>th</sup>, 2024 with its effective date as of June 01<sup>st</sup>, 2023 by and between Favo Capital, Inc., a Nevada corporation (the "Company"), and Shaun Quin ("Executive").

**<u>RECITALS</u>**

The Company is in business from December 1999. The Company desires to employ Executive, and the Executive desires to accept such employment, on the terms and subject to the conditions set forth in this Agreement.

In consideration of the mutual promises set forth in this Agreement the parties hereto agree as follows:

**<u>ARTICLE I</u>**

**<u>Term of Employment</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.01 Subject to the provisions of Article V, and upon the terms and subject to the conditions set forth in this Agreement, the Company will employ Executive for the period beginning on the date first written above (the "Commencement Date") and ending on 31<sup>st</sup> May, 2028 (the "Initial Term"). The Initial Term shall be automatically renewed for up to two (2) successive consecutive one (1) year periods (each, a "Renewal Term" and the Initial Term and Renewal Term are collectively referred to as the "term of employment") thereafter unless either party sends notice to the other party, not more than 270 days and not less than 90 days before the end of the then-existing term of employment, of such party's desire to terminate the Agreement at the end of the then-existing term, in which case this Agreement will terminate at the end of the then-existing term. The parties understand and acknowledge that if Executive remains employed by the Company after the end of the last Renewal Term, then such employment shall be "at-will" unless this Agreement is extended, or different terms are established, by the parties in writing.

**<u>ARTICLE II</u>**

**<u>Duties</u>**

2.01(a) During the term of employment, Executive will:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Promote the interests, within the scope of his duties, of the Company and devote his time and efforts to the Company's business and affairs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Serve as President of the Company, reporting directly to the Company's Board of Directors (the "Board"); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Perform the duties and services consistent with the title and function of such office, including without limitation, those as specifically set forth from time to time by the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Notwithstanding anything contained in clause 2.01(a)(i) above to the contrary, nothing contained herein or under law shall be construed as preventing Executive from (i) investing Executive's personal time and assets in such form or manner as they see fit. The Executive may perform services and devote time to other business interests, represent other companies as a director or Shareholder, sit as a Board member of other private and public companies and participate in Syndication or Direct funding opportunities with the company through its current business activities as approved by the Board of Directors of the Company.

**<u>ARTICLE III</u>**

**<u>Base Compensation</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.01 The Company will compensate Executive for the duties performed by him hereunder by payment of a base salary at a rate of Five Thousand Three Hundred and Twenty- Eight ($5,328.00) payable bi-weekly via W2 Payroll from Favo Group Human Resources the HR Division of Favo Capital, Inc. (the "Base"), subject to customary withholding for federal, state, and local taxes and other normal and customary withholding items.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.02 <u>Bonus</u>. The Company will develop a Bonus/ Incentive based program to be rolled out from January 01<sup>st</sup>, 2025, of which the Executive will be liable to participate.

**<u>ARTICLE IV</u>**

**<u>Reimbursement and Employment Benefits</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.01 <u>Health and Other Medical</u>. Executive shall be eligible to participate in all health, medical, dental, and life insurance employee benefits as are available from time to time to other key executive employees (and their families) of the Company, including a Life Insurance Plan, Medical and Dental Insurance Plan, and a Long-Term Disability Plan (the "Plans"). This will cover 100% of "ALL" medical expenses, in and out of network costs, co-pays, medication costs and any other medically related costs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.02 <u>Vacation</u>. Executive shall be entitled to three (3 weeks of vacation, to be taken in such amounts and at such times as shall be mutually convenient for Executive and the Company. Any time not taken by Executive in one year shall be forfeited and not carried forward to subsequent years. Executive shall not be entitled to be reimbursed for any unused vacation or personal time, except as may be required under law.

&nbsp;&nbsp;&nbsp;&nbsp;4.03 <u>Equity</u>. The parties agree that any tax issues, or payments that are due to the IRS or comparable foreign entity as a result of issuance of the equity to Executive, are the sole responsibility of Executive. Executive understands that its own obligation to consult with and take his own independent tax advice on this matter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Restricted Shares</u>. Executive will be issued an agreed number of restricted shares of common stock in the Company annually as agreed to by the Board of Directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Incentive Plan Shares</u>. In addition to the issuance of restricted shares in Section 4.03(a) above, Executive will be eligible to participate in the Company's 2024 Incentive Plan, where executive may be issued equity in the Company, as determined by and within the sole discretion of the Board of Directors of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.04 <u>Reimbursable Expenses</u>. The Company shall in accordance with its standard policies in effect from time to time reimburse Executive for all reasonable out-of-pocket expenses actually incurred by him in the conduct of the business of the Company provided that Executive submits all substantiation of such expenses to the Company on a timely basis in accordance with such standard policies, ie. Meals & Entertainment allowance, not exceeding the previous year's tax filed expenses, motor vehicle allowance not exceeding $1,200 per month, "ALL" vehicle expenses are over and above the allowance. Including but not limited to - Insurance, Repairs and Maintenance, Fuel/ Gas and Tires.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.05 <u>Savings Plan</u>. Executives will be eligible to enroll and participate, and be immediately vested in, all Company savings and retirement plans, including any 401(k) plans, as are available from time to time to other key executive employees.

**<u>ARTICLE V</u>**

**<u>Termination</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.01 <u>General Provisions</u>. Except as otherwise provided in this Article V, at such time as Executive's employment is terminated by the Executive or the Company, any and all of the Company's obligations under this Agreement shall terminate, other than the Company's obligation to pay Executive, within thirty (30) days of Executive's termination of employment, the full amount of any unpaid Base and accrued but unpaid benefits, including any vacation pay, earned by Executive pursuant to this Agreement through and including the date of termination and to observe the terms and conditions of any plan or benefit arrangement which, by its terms, survives such termination of Executive's employment. The payments to be made under this Section 5.01 shall be made to Executive, or in the event of Executive's death, to such beneficiary as Executive may designate in writing to the Company for that purpose, or if Executive has not so designated, then to the spouse of Executive, or if none is surviving, then to the personal representative of the estate of Executive. Notwithstanding the foregoing, termination of employment shall not affect the obligations of Executive under Article VI hereof that, pursuant to the express provisions of this Agreement, continue in full force and effect. Upon termination of employment with the Company for any reason, Executive shall promptly deliver to the Company all Company property including without limitation all writings, records, data, memoranda, contracts, orders, sales literature, price lists, client lists, data processing materials, and other documents, whether or not obtained from the Company or any Affiliate, which pertain to or were used by Executive in connection with his employment by the Company or which pertain to any Affiliate, including, but not limited to, Confidential Information, as well as any automobiles, computers or other furniture, fixtures or equipment which were purchased by the Company for Executive or otherwise in Executive's possession or control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.02 <u>Automatic Termination</u>. This Agreement shall be automatically terminated upon the first to occur of the following (a) the expiration of this Agreement in accordance with Section

&nbsp;&nbsp;&nbsp;&nbsp;1.01 hereof, (b) the Company's termination pursuant to section 5.03, (c) the Executive's termination pursuant to section 5.04 or (d) the Executive's death.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.03 <u>By the Company</u>. This Agreement may be terminated by the Company upon written notice to the Executive upon the first to occur of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Disability</u>. Upon the Executive's Disability (as defined herein). The term "Disability" shall mean, in the sole determination of the Company's Board, whose determination shall be final and binding, the reasonable likelihood that the Executive will be unable to perform his duties and responsibilities to the Company by reason of a physical or mental disability or infirmity for either: (i) a continuous period of four months; or (ii) 180 days during any consecutive twelve (12) month period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Cause</u>. Upon the Executive's commission of Cause (as defined herein). The term "Cause" shall mean the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Any violation by Executive of any material provision of this Agreement (including without limitation any violation of any provision of Sections 6.01, 6.02 or 6.03 hereof any and all of which are material in all respects), upon notice of same by the Company describing in detail the breach asserted and stating that it constitutes notice pursuant to this Section 5.03(b)(i), which breach, if capable of being cured, has not been cured to the Company's sole and absolute satisfaction within 30 days after such notice (except for breaches of any provisions of sections 6.01, 6.02 or 6.03 which are not subject to cure or any notice);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Embezzlement by Executive of funds or property of the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Habitual absenteeism, bad faith, fraud, refusal to perform his duties, gross negligence or willful misconduct on the part of Executive in the performance of his duties as an employee of the Company, provided that the Company has given written notice of and an opportunity of not less than 30 days to cure such breach, which notice describes in detail the breach asserted and stating that it constitutes notice pursuant to this Section 5.03(b)(iii), provided that no such notice or opportunity needs to be given if (x) in the judgment of the Company's Board of Directors, such conduct is habitual or would unnecessarily or unreasonably expose the Company to undue risk or harm or (y) one previous notice had already been given under this section or under section (i) above; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) a felonious act, conviction, or plea of nolo contendere of Executive under the laws of the United States or any state (except for any conviction or plea based on a vicarious liability theory and not the actual conduct of the Executive).

\*NOTE - If the Company terminates the Executive for any reason other than stated in this agreement from section 5.01, 5.02 and 5.03, the Company will be liable to reimburse the Executive for the balance of the term of this agreement as per Base Compensation plus benefits agreed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.04 <u>By the Executive</u>. This Agreement may be terminated by the Executive upon written notice to the Company upon the first to occur of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Change in Control</u>. Within six (6) months after a "Change in Control" (as defined herein) of the Company (unless Executive is not offered a position in the buying or succeeding owner with equal or better economic terms as this Agreement). The term "Change in Control" shall be deemed to have occurred at such time as (i) any person or entity (or person or entities which are affiliated or acting as a group or otherwise in concert) is or becomes the beneficial owner, directly or indirectly, of securities representing 50% or more of the combined voting power for election of directors of the then outstanding securities of the Company (other than stockholders which own greater than fifty percent (50%) of the stock of the Company as of the effective date of this Agreement); (ii) the shareholders of the Company approve any merger or consolidation as a result of which its membership interests shall be changed, converted, or exchanged (other than a merger with a wholly-owned subsidiary of the Company) or any liquidation of the Company or any sale or other disposition of all or substantially all of the assets or earning power of the Company; or (iii) the shareholders of the Company approve any merger or consolidation to which the Company is a party as a result of which the persons who were members of the Company immediately before the effective date of the merger or consolidation shall have beneficial ownership of less than 50% of the combined voting power for election of directors or the equivalent of the surviving corporation following the effective date of such merger or consolidation; provided, however, that no Change in Control shall be deemed to have occurred as a result of the sale or transfer of membership interests of the Company to an employee benefit plan sponsored by the Company or an affiliate thereof or if the new employer offers to employ the Executive on substantially the same terms and conditions as set forth in this Agreement (except that the Base shall not be reduced below the then-existing Base).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Constructive Termination</u>. Upon the occurrence of a "Constructive Termination" (as defined herein) by the Company. The term "Constructive Termination" shall mean any of the following: any breach by the Company of any material provision of this Agreement, including, without limitation, the assignment to the Executive of duties inconsistent with his position specified in Section 2.01 hereof or any breach by the Company of such Section, which is not cured within 60 days after written notice of same by Executive, describing in detail the breach asserted and stating that it constitutes notice pursuant to this Section 5.04.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Voluntary Termination</u>. Executive's resignation for reasons other than as specified in Section 5.04(a) and (b).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.05 <u>Consequences of Termination</u>. Upon any termination of Executive's employment with the Company, except for a termination by the Company for Cause as provided in Section 5.03(b) hereof or for a termination by the Executive pursuant to Section 5.04(c) hereof, the Executive shall be entitled to (a) a payment equal to the length of the remaining term hereof worth of the then-existing Base (the "Severance") and (b) retain the benefits set forth in Article IV for the lesser of the length of the remaining term hereof. The Severance shall be paid, at Company's option, either (x) in a lump sum upon termination with such payments discounted by the U.S. Treasury rate most closely comparable to the applicable time period left in the Agreement or (y) as and when normal payroll payments are made. Executive expressly

acknowledges and agrees that the payment of Severance to Executive hereunder shall be liquidated damages for and in full satisfaction of any and all claims Executive may have relating to or arising out of Executive's employment or termination of Executive's employment by the Company or relating to or arising out of this Agreement and the termination thereof, including, without limitation, those causes of action arising under the Age Discrimination in Employment Act of 1967, as amended, 29 U.S.C. §621 *et seq.,* Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. §2000e *et seq.,* the Americans with Disabilities Act of 1990, as amended, 42 U.S.C. §12101 *et seq.*, the Fair Labor Standards Act of 1938, as amended, 29 U.S.C. §201 *et seq.,* the Civil Rights Act of April 9, 1866.1 42 U.S.C. §1981 *et seq.,* the National Labor Management Relations Act, 29 U.S.C. §141 *et seq.,* the Occupational Safety and Health Act, 29 U.S.C. §651 *et seq.,* and the Family Medical Leave Act of 1993, 29 U.S.C. §2601 *et seq.* Notwithstanding the foregoing, Executive's right to receive Severance Pay is contingent upon Executive not violating any of his on-going obligations under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.06 <u>Representations</u>. Executive represents, warrants, and covenants to
Company that

&nbsp;&nbsp;&nbsp;&nbsp;(a) there is no other agreement or relationship which is binding on him which prevents him from entering into or performing under the terms hereof and (b) the Company may contact any past, present, or future entity with whom he has a business relationship and inform such entity of the existence of this Agreement and the terms and conditions set forth herein.

**<u>ARTICLE VI</u>**

**<u>Covenants</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.01 <u>Solicitation</u>. (a) During the period in which Executive performs services for the Company and for a period of three (3) months after termination of Executive's employment with the Company, regardless of the reason, Executive hereby covenants and agrees that he shall not, directly or indirectly, except in connection with his duties hereunder or otherwise for the sole account and benefit of the Company, whether as a sole proprietor, partner, member, shareholder, employee, director, officer, guarantor, consultant, independent contractor, or in any other capacity as principal or agent, or through any person, subsidiary, affiliate, or employee acting as nominee or agent, except with the consent of the Company:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Solicit, attempt to solicit, or accept business from, or cause to be solicited or have business accepted from, any then-current customers of Company, any persons or entities who were customers of the Company within the three (3) months preceding the Termination Date, or any prospective customers of the Company for whom bids were being prepared or had been submitted as of the Termination Date; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Induce, or attempt to induce, hire or attempt to hire, or cause to be induced or hired, any employee of the Company, or persons who were employees of the Company within the three (3) months preceding the Termination Date, to leave or terminate his or her employment with the Company, or hire or engage as an independent contractor any such employee of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Notwithstanding the foregoing, Executive shall not be prevented from (i) investing in or owning up to sixty five percent (65%) of the outstanding stock of any corporation engaged

in any business provided that such shares are regularly traded on a national securities exchange or in any over-the-counter market or (ii) retaining any shares of stock in any corporation which Executive owned before the date of his employment with the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.02 <u>Confidential Information</u>. Executive acknowledges that in his employment he is or will be making use of, acquiring, or adding to the Company's confidential information which includes, but is not limited to, memoranda and other materials or records of a proprietary nature; technical information regarding the operations of the Company; and records and policy matters relating to finance, personnel, market research, strategic planning, current and potential customers, lease arrangements, service contracts, management, and operations. Therefore, to protect the Company's confidential information and to protect other employees who depend on the Company for regular employment, Executive agrees that he will not in any way use any of said confidential information except in connection with his employment by the Company, and except in connection with the business of the Company he will not copy, reproduce, or take with him the original or any copies of said confidential information and will not directly or indirectly divulge any of said confidential information to anyone without the prior written consent of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.03 <u>Inventions</u>. All discoveries, designs, and inventions, whether patentable or not, relating to (or suggested by or resulting from) products, services of the Company or any Affiliate or relating to (or suggested by or resulting from) methods or processes used or usable in connection with the business of the Company or any Affiliate that may be conceived, developed, or made by Executive during employment with the Company (hereinafter "Inventions"), either solely or jointly with others, shall automatically become the sole property of the Company or an Affiliate. Executive shall immediately disclose to the Company all such Inventions and shall, without additional compensation, execute all assignments and other documents deemed necessary to perfect the property rights of the Company or any Affiliate therein. These obligations shall continue beyond the termination of Executive's employment with respect to Inventions conceived, developed, or made by Executive during employment with the Company. The provisions of this Section 6 shall not apply to any Invention for which no equipment, supplies, facility, or trade secret information of the Company or any Affiliate is used by Executive and which is developed entirely on Executive's own time, unless (a) such Invention relates (i) to the actual or demonstrably anticipated research or development of the Company or an Affiliate, or (b) such Invention results from work performed by Executive for the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.04 <u>non-Disparagement</u>. For a period commencing on the date hereof and continuing indefinitely, Executive hereby covenants and agrees that he shall not, directly or indirectly, defame, disparage, create false impressions, or otherwise put in a false or bad light the Company, its products or services, its business, reputation, practices, past or present employees or otherwise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.05 <u>Blue Penciling</u>. If at the time of enforcement of any provision of this Agreement, a court shall hold that the duration, scope, or area restriction of any provision hereof is unreasonable under circumstances now or then existing, the parties hereto agree that the maximum duration, scope or area reasonable under the circumstances shall be substituted by the court for the stated duration, scope, or area.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.06 <u>Remedies</u>. Executive acknowledges that any breach by him of the provisions of this Article VI of this Agreement shall cause irreparable harm to the Company and that a remedy at law for any breach or attempted breach of Article VI of this Agreement will be inadequate, and agrees that the Company shall be entitled to exercise all remedies available to it, including specific performance and injunctive and other equitable relief, without the necessity of posting any bond, in the case of any such breach or attempted breach.

**<u>ARTICLE VII</u>**

**<u>Assignment</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.01 This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the Company and shall relieve the Company of its obligations hereunder if the assignment is pursuant to a Change in Control. Neither this Agreement nor any rights hereunder shall be assignable by Executive and any such purported assignment by him shall be void.

**<u>ARTICLE VIII</u>**

**<u>Entire Agreement</u>**

This Agreement constitutes the entire understanding between the Company and Executive concerning his employment by the Company or subsidiaries and supersedes any and all previous agreements between Executive and the Company or any of its affiliates or subsidiaries concerning such employment, and/or any compensation, bonuses or incentives. Each party hereto shall pay its own costs and expenses (including legal fees) except as otherwise expressly provided herein incurred in connection with the preparation, negotiation, and execution of this Agreement. This Agreement may not be changed orally, but only in a written instrument signed by both parties hereto.

**<u>ARTICLE IX</u>**

**<u>Applicable Law; Miscellaneous</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.01 <u>Governing Law</u>. This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada. All actions brought to interpret or enforce this Agreement shall be brought in federal or state courts located in Nevada.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.02 <u>Attorneys' Fees</u>. In addition to all other rights and benefits under this Agreement, each party agrees to reimburse the other for, and indemnify and hold harmless such party against, all costs and expenses (including attorney's fees) incurred by such party (whether or not during the term of this Agreement or otherwise), if and to the extent that such party prevails on or is otherwise successful on the merits with respect to any action, claim or dispute relating in any manner to this Agreement or to any termination of this Agreement or in seeking to obtain or enforce any right or benefit provided by or claimed under this Agreement, taking into account the relative fault of each of the parties and any other relevant considerations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.03 <u>Indemnification of Executive</u>. The Company shall indemnify and hold harmless Executive to the full extent authorized or permitted by law with respect to any claim, liability,

action, or proceeding instituted or threatened against or incurred by Executive or his legal representatives and arising in connection with Executive's conduct or position at any time as a director, officer, employee, or agent of the Company or any subsidiary thereof. The Company shall not change, modify, alter, or in any way limit the existing indemnification and reimbursement provisions relating to and for the benefit of its directors and officers without the prior written consent of the Executive, including any modification or limitation of any directors and officers' liability insurance policy.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.04 <u>Waiver</u>. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a continuing waiver or a waiver of any similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party hereto which are not set forth expressly in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.05 <u>Unenforceability</u>. The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.06 <u>Counterparts</u>. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original and all of which together shall constitute one and the same instrument.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.07 <u>Section Headings</u>. The section headings contained in this Agreement are inserted for reference purposes only and shall not affect the meaning or interpretation of this Agreement.

**IN WITNESS WHEREOF**, the parties have executed this Agreement as of the date first written above.

**FAVO CAPITAL, INC.**

<u>By: /s/ Vincent Napolitano</u>

Name: Vincent Napolitano

Its: CEO and Director

**EXECUTIVE**

<u>/s/ Shaun Quin</u>

Shaun Quin

**DIRECTOR**

<u>/s/ Glen Steward</u> 

Glen Steward

## Exhibit 10.7

**EMPLOYMENT AGREEMENT**

This Employment Agreement (the "Agreement") entered into August 20<sup>th</sup>, 2024 with its effective date as of June 01<sup>st</sup>, 2024 by and between Favo Capital, Inc., a Nevada corporation (the "Company"), and Vaughan Korte ("Executive").

**<u>RECITALS</u>**

The Company is in business from December 1999. The Company desires to employ Executive, and the Executive desires to accept such employment, on the terms and subject to the conditions set forth in this Agreement.

In consideration of the mutual promises set forth in this Agreement the parties hereto agree as follows:

**<u>ARTICLE I</u>**

**<u>Term of Employment</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.01 Subject to the provisions of Article V, and upon the terms and subject to the conditions set forth in this Agreement, the Company will employ Executive for the period beginning on the date first written above (the "Commencement Date") and ending on 31<sup>st</sup> May 2028 (the "Initial Term"). The Initial Term shall be automatically renewed for up to one (1) successive consecutive one (1) year periods (each, a "Renewal Term" and the Initial Term and Renewal Term are collectively referred to as the "term of employment") thereafter unless either party sends notice to the other party, not more than 90 days before the end of the then-existing term of employment, of such party's desire to terminate the Agreement at the end of the then- existing term, in which case this Agreement will terminate at the end of the then-existing term. The parties understand and acknowledge that if Executive remains employed by the Company after the end of the last Renewal Term, then such employment shall be "at-will" unless this Agreement is extended, or different terms are established, by the parties in writing.

**<u>ARTICLE II</u>**

**<u>Duties</u>**

2.01(a) During the term of employment, Executive will:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Promote the interests, within the scope of his duties, of the Company and devote his time and efforts to the Company's business and affairs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Serve as Chief Financial Officer of the Company, reporting directly to the Company's Board of Directors (the "Board"); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Perform the duties and services consistent with the title and function of such office, including without limitation, those as specifically set forth from time to time by the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Notwithstanding anything contained in clause 2.01(a)(i) above to the contrary, nothing contained herein or under law shall be construed as preventing Executive from (i) investing Executive's personal time and assets in such form or manner as they see fit. The Executive may perform services and devote time to other business interests, represent other companies as a director or Shareholder, sit as a Board member of other private and public companies and participate in Syndication or Direct funding opportunities with the company through its current business activities as approved by the Board of Directors of the Company.

**<u>ARTICLE III</u>**

**<u>Base Compensation</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.01 The Company will compensate Executive for the duties performed by him hereunder by payment of a base salary at a rate of One Thousand and Three Hundred ($1300.00) payable bi-weekly via W2 Payroll from Favo Group Human Resources the HR Division of Favo Capital, Inc. (the "Base"), subject to customary withholding for federal, state, and local taxes and other normal and customary withholding items.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.02 <u>Bonus</u>. The Company will develop a Bonus/ Incentive based program to be rolled out from January 01<sup>st</sup>, 2025, of which the Executive will be liable to participate.

**<u>ARTICLE IV</u>**

**<u>Reimbursement and Employment Benefits</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.01 <u>Health and Other Medical</u>. Executive shall be eligible to participate in all health, medical, dental, and life insurance employee benefits as are available from time to time to other key executive employees (and their families) of the Company, including a Life Insurance Plan, Medical and Dental Insurance Plan (the "Plan"). This will cover 100% of the company benefit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.02 <u>Vacation</u>. Executive shall be entitled to three (3 weeks of vacation, to be taken in such amounts and at such times as shall be mutually convenient for Executive and the Company. Any time not taken by Executive in one year shall be forfeited and not carried forward to subsequent years. Executive shall not be entitled to be reimbursed for any unused vacation or personal time, except as may be required under law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.03 <u>Equity</u>. The parties agree that any tax issues, or payments that are due to the IRS or comparable foreign entity as a result of issuance of the equity to Executive, are the sole responsibility of Executive. Executive understands that its own obligation to consult with and take his own independent tax advice on this matter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Restricted Shares</u>. Executive will be issued an agreed number of restricted shares of common stock in the Company annually as agreed to by the Board of Directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Incentive Plan Shares</u>. In addition to the issuance of restricted shares in Section 4.03(a) above, Executive will be eligible to participate in the Company's 2024 Incentive Plan, where executive may be issued equity in the Company, as determined by and within the sole discretion of the Board of Directors of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.04 <u>Reimbursable Expenses</u>. The Company shall in accordance with its standard policies in effect from time to time reimburse Executive for all reasonable out-of-pocket expenses actually incurred by him in the conduct of the business of the Company provided that Executive submits all substantiation of such expenses to the Company on a timely basis in accordance with such standard policies, ie. Meals & Entertainment allowance, not exceeding the previous year's tax filed expenses.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.05 <u>Savings Plan</u>. Executives will be eligible to enroll and participate, and be immediately vested in, all Company savings and retirement plans, including any 401(k) plans, as are available from time to time to other key executive employees.

**<u>ARTICLE V</u>**

**<u>Termination</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.01 <u>General Provisions</u>. Except as otherwise provided in this Article V, at such time as Executive's employment is terminated by the Executive or the Company, any and all of the Company's obligations under this Agreement shall terminate, other than the Company's obligation to pay Executive, within thirty (30) days of Executive's termination of employment, the full amount of any unpaid Base and accrued but unpaid benefits, including any vacation pay, earned by Executive pursuant to this Agreement through and including the date of termination and to observe the terms and conditions of any plan or benefit arrangement which, by its terms, survives such termination of Executive's employment. The payments to be made under this Section 5.01 shall be made to Executive, or in the event of Executive's death, to such beneficiary as Executive may designate in writing to the Company for that purpose, or if Executive has not so designated, then to the spouse of Executive, or if none is surviving, then to the personal representative of the estate of Executive. Notwithstanding the foregoing, termination of employment shall not affect the obligations of Executive under Article VI hereof that, pursuant to the express provisions of this Agreement, continue in full force and effect. Upon termination of employment with the Company for any reason, Executive shall promptly deliver to the Company all Company property including without limitation all writings, records, data, memoranda, contracts, orders, sales literature, price lists, client lists, data processing materials, and other documents, whether or not obtained from the Company or any Affiliate, which pertain to or were used by Executive in connection with his employment by the Company or which pertain to any Affiliate, including, but not limited to, Confidential Information, as well as any automobiles, computers or other furniture, fixtures or equipment which were purchased by the Company for Executive or otherwise in Executive's possession or control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.02 <u>Automatic Termination</u>. This Agreement shall be automatically terminated upon the first to occur of the following (a) the expiration of this Agreement in accordance with Section

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.01 hereof, (b) the Company's termination pursuant to section 5.03, (c) the Executive's termination pursuant to section 5.04 or (d) the Executive's death.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.03 <u>By the Company</u>. This Agreement may be terminated by the Company upon written notice to the Executive upon the first to occur of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Disability</u>. Upon the Executive's Disability (as defined herein). The term "Disability" shall mean, in the sole determination of the Company's Board, whose determination shall be final and binding, the reasonable likelihood that the Executive will be unable to perform his duties and responsibilities to the Company by reason of a physical or mental disability or infirmity for either: (i) a continuous period of four months; or (ii) 180 days during any consecutive twelve (12) month period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Cause</u>. Upon the Executive's commission of Cause (as defined herein). The term "Cause" shall mean the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Any violation by Executive of any material provision of this Agreement (including without limitation any violation of any provision of Sections 6.01, 6.02 or 6.03 hereof any and all of which are material in all respects), upon notice of same by the Company describing in detail the breach asserted and stating that it constitutes notice pursuant to this Section 5.03(b)(i), which breach, if capable of being cured, has not been cured to the Company's sole and absolute satisfaction within 30 days after such notice (except for breaches of any provisions of sections 6.01, 6.02 or 6.03 which are not subject to cure or any notice);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Embezzlement by Executive of funds or property of the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Habitual absenteeism, bad faith, fraud, refusal to perform his duties, gross negligence or willful misconduct on the part of Executive in the performance of his duties as an employee of the Company, provided that the Company has given written notice of and an opportunity of not less than 30 days to cure such breach, which notice describes in detail the breach asserted and stating that it constitutes notice pursuant to this Section 5.03(b)(iii), provided that no such notice or opportunity needs to be given if (x) in the judgment of the Company's Board of Directors, such conduct is habitual or would unnecessarily or unreasonably expose the Company to undue risk or harm or (y) one previous notice had already been given under this section or under section (i) above; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) a felonious act, conviction, or plea of nolo contendere of Executive under the laws of the United States or any state (except for any conviction or plea based on a vicarious liability theory and not the actual conduct of the Executive).

\*NOTE - If the Company terminates the Executive for any reason other than stated in this agreement from section 5.01, 5.02 and 5.03, the Company will be liable to reimburse the Executive for the balance of the term of this agreement as per Base Compensation plus benefits agreed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.04 <u>By the Executive</u>. This Agreement may be terminated by the Executive upon written notice to the Company upon the first to occur of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Change in Control</u>. Within six (6) months after a "Change in Control" (as defined herein) of the Company (unless Executive is not offered a position in the buying or succeeding owner with equal or better economic terms as this Agreement). The term "Change in Control" shall be deemed to have occurred at such time as (i) any person or entity (or person or entities

which are affiliated or acting as a group or otherwise in concert) is or becomes the beneficial owner, directly or indirectly, of securities representing 50% or more of the combined voting power for election of directors of the then outstanding securities of the Company (other than stockholders which own greater than fifty percent (50%) of the stock of the Company as of the effective date of this Agreement); (ii) the shareholders of the Company approve any merger or consolidation as a result of which its membership interests shall be changed, converted, or exchanged (other than a merger with a wholly-owned subsidiary of the Company) or any liquidation of the Company or any sale or other disposition of all or substantially all of the assets or earning power of the Company; or (iii) the shareholders of the Company approve any merger or consolidation to which the Company is a party as a result of which the persons who were members of the Company immediately before the effective date of the merger or consolidation shall have beneficial ownership of less than 50% of the combined voting power for election of directors or the equivalent of the surviving corporation following the effective date of such merger or consolidation; provided, however, that no Change in Control shall be deemed to have occurred as a result of the sale or transfer of membership interests of the Company to an employee benefit plan sponsored by the Company or an affiliate thereof or if the new employer offers to employ the Executive on substantially the same terms and conditions as set forth in this Agreement (except that the Base shall not be reduced below the then-existing Base).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Constructive Termination</u>. Upon the occurrence of a "Constructive Termination" (as defined herein) by the Company. The term "Constructive Termination" shall mean any of the following: any breach by the Company of any material provision of this Agreement, including, without limitation, the assignment to the Executive of duties inconsistent with his position specified in Section 2.01 hereof or any breach by the Company of such Section, which is not cured within 60 days after written notice of same by Executive, describing in detail the breach asserted and stating that it constitutes notice pursuant to this Section 5.04.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Voluntary Termination</u>. Executive's resignation for reasons other than as specified in Section 5.04(a) and (b).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.05 <u>Consequences of Termination</u>. Upon any termination of Executive's employment with the Company, except for a termination by the Company for Cause as provided in Section 5.03(b) hereof or for a termination by the Executive pursuant to Section 5.04(c) hereof, the Executive shall be entitled to (a) a payment equal to the length of the remaining term hereof worth of the then-existing Base (the "Severance") and (b) retain the benefits set forth in Article IV for the lesser of the length of the remaining term hereof. The Severance shall be paid, at Company's option, either (x) in a lump sum upon termination with such payments discounted by the U.S. Treasury rate most closely comparable to the applicable time period left in the Agreement or (y) as and when normal payroll payments are made. Executive expressly acknowledges and agrees that the payment of Severance to Executive hereunder shall be liquidated damages for and in full satisfaction of any and all claims Executive may have relating to or arising out of Executive's employment or termination of Executive's employment by the Company or relating to or arising out of this Agreement and the termination thereof, including, without limitation, those causes of action arising under the Age Discrimination in Employment Act of 1967, as amended, 29 U.S.C. §621 *et seq.,* Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. §2000e *et seq.,* the Americans with Disabilities Act of 1990, as amended, 42

U.S.C. §12101 *et seq.*, the Fair Labor Standards Act of 1938, as amended, 29 U.S.C. §201 *et seq.,* the Civil Rights Act of April 9, 1866.1 42 U.S.C. §1981 *et seq.,* the National Labor Management Relations Act, 29 U.S.C. §141 *et seq.,* the Occupational Safety and Health Act, 29 U.S.C. §651 *et seq.,* and the Family Medical Leave Act of 1993, 29 U.S.C. §2601 *et seq.* Notwithstanding the foregoing, Executive's right to receive Severance Pay is contingent upon Executive not violating any of his on-going obligations under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.06 <u>Representations</u>. Executive represents, warrants, and covenants to Company that

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) there is no other agreement or relationship which is binding on him which prevents him from entering into or performing under the terms hereof and (b) the Company may contact any past, present, or future entity with whom he has a business relationship and inform such entity of the existence of this Agreement and the terms and conditions set forth herein.

**<u>ARTICLE VI</u>**

**<u>Covenants</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.01 <u>Solicitation</u>. (a) During the period in which Executive performs services for the Company and for a period of three (3) months after termination of Executive's employment with the Company, regardless of the reason, Executive hereby covenants and agrees that he shall not, directly or indirectly, except in connection with his duties hereunder or otherwise for the sole account and benefit of the Company, whether as a sole proprietor, partner, member, shareholder, employee, director, officer, guarantor, consultant, independent contractor, or in any other capacity as principal or agent, or through any person, subsidiary, affiliate, or employee acting as nominee or agent, except with the consent of the Company:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Solicit, attempt to solicit, or accept business from, or cause to be solicited or have business accepted from, any then-current customers of Company, any persons or entities who were customers of the Company within the three (3) months preceding the Termination Date, or any prospective customers of the Company for whom bids were being prepared or had been submitted as of the Termination Date; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Induce, or attempt to induce, hire or attempt to hire, or cause to be induced or hired, any employee of the Company, or persons who were employees of the Company within the three (3) months preceding the Termination Date, to leave or terminate his or her employment with the Company, or hire or engage as an independent contractor any such employee of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Notwithstanding the foregoing, Executive shall not be prevented from (i) investing in or owning up to sixty five percent (65%) of the outstanding stock of any corporation engaged in any business provided that such shares are regularly traded on a national securities exchange or in any over-the-counter market or (ii) retaining any shares of stock in any corporation which Executive owned before the date of his employment with the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.02 <u>Confidential Information</u>. Executive acknowledges that in his employment he is or will be making use of, acquiring, or adding to the Company's confidential information which includes, but is not limited to, memoranda and other materials or records of a proprietary nature;

technical information regarding the operations of the Company; and records and policy matters relating to finance, personnel, market research, strategic planning, current and potential customers, lease arrangements, service contracts, management, and operations. Therefore, to protect the Company's confidential information and to protect other employees who depend on the Company for regular employment, Executive agrees that he will not in any way use any of said confidential information except in connection with his employment by the Company, and except in connection with the business of the Company he will not copy, reproduce, or take with him the original or any copies of said confidential information and will not directly or indirectly divulge any of said confidential information to anyone without the prior written consent of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.03 <u>Inventions</u>. All discoveries, designs, and inventions, whether patentable or not, relating to (or suggested by or resulting from) products, services of the Company or any Affiliate or relating to (or suggested by or resulting from) methods or processes used or usable in connection with the business of the Company or any Affiliate that may be conceived, developed, or made by Executive during employment with the Company (hereinafter "Inventions"), either solely or jointly with others, shall automatically become the sole property of the Company or an Affiliate. Executive shall immediately disclose to the Company all such Inventions and shall, without additional compensation, execute all assignments and other documents deemed necessary to perfect the property rights of the Company or any Affiliate therein. These obligations shall continue beyond the termination of Executive's employment with respect to Inventions conceived, developed, or made by Executive during employment with the Company. The provisions of this Section 6 shall not apply to any Invention for which no equipment, supplies, facility, or trade secret information of the Company or any Affiliate is used by Executive and which is developed entirely on Executive's own time, unless (a) such Invention relates (i) to the actual or demonstrably anticipated research or development of the Company or an Affiliate, or (b) such Invention results from work performed by Executive for the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.04 <u>non-Disparagement</u>. For a period commencing on the date hereof and continuing indefinitely, Executive hereby covenants and agrees that he shall not, directly or indirectly, defame, disparage, create false impressions, or otherwise put in a false or bad light the Company, its products or services, its business, reputation, practices, past or present employees or otherwise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.05 <u>Blue Penciling</u>. If at the time of enforcement of any provision of this Agreement, a court shall hold that the duration, scope, or area restriction of any provision hereof is unreasonable under circumstances now or then existing, the parties hereto agree that the maximum duration, scope or area reasonable under the circumstances shall be substituted by the court for the stated duration, scope, or area.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.06 <u>Remedies</u>. Executive acknowledges that any breach by him of the provisions of this Article VI of this Agreement shall cause irreparable harm to the Company and that a remedy at law for any breach or attempted breach of Article VI of this Agreement will be inadequate, and agrees that the Company shall be entitled to exercise all remedies available to it, including specific performance and injunctive and other equitable relief, without the necessity of posting any bond, in the case of any such breach or attempted breach.

**<u>ARTICLE VII</u>**

**<u>Assignment</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.01 This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the Company and shall relieve the Company of its obligations hereunder if the assignment is pursuant to a Change in Control. Neither this Agreement nor any rights hereunder shall be assignable by Executive and any such purported assignment by him shall be void.

**<u>ARTICLE VIII</u>**

**<u>Entire Agreement</u>**

This Agreement constitutes the entire understanding between the Company and Executive concerning his employment by the Company or subsidiaries and supersedes any and all previous agreements between Executive and the Company or any of its affiliates or subsidiaries concerning such employment, and/or any compensation, bonuses or incentives. Each party hereto shall pay its own costs and expenses (including legal fees) except as otherwise expressly provided herein incurred in connection with the preparation, negotiation, and execution of this Agreement. This Agreement may not be changed orally, but only in a written instrument signed by both parties hereto.

**<u>ARTICLE IX</u>**

**<u>Applicable Law; Miscellaneous</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.01 <u>Governing Law</u>. This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada. All actions brought to interpret or enforce this Agreement shall be brought in federal or state courts located in Nevada.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.02 <u>Attorneys' Fees</u>. In addition to all other rights and benefits under this Agreement, each party agrees to reimburse the other for, and indemnify and hold harmless such party against, all costs and expenses (including attorney's fees) incurred by such party (whether or not during the term of this Agreement or otherwise), if and to the extent that such party prevails on or is otherwise successful on the merits with respect to any action, claim or dispute relating in any manner to this Agreement or to any termination of this Agreement or in seeking to obtain or enforce any right or benefit provided by or claimed under this Agreement, taking into account the relative fault of each of the parties and any other relevant considerations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.03 <u>Indemnification of Executive</u>. The Company shall indemnify and hold harmless Executive to the full extent authorized or permitted by law with respect to any claim, liability, action, or proceeding instituted or threatened against or incurred by Executive or his legal representatives and arising in connection with Executive's conduct or position at any time as a director, officer, employee, or agent of the Company or any subsidiary thereof. The Company shall not change, modify, alter, or in any way limit the existing indemnification and reimbursement provisions relating to and for the benefit of its directors and officers without the prior written consent of the Executive, including any modification or limitation of any directors and officers' liability insurance policy.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.04 <u>Waiver</u>. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a continuing waiver or a waiver of any similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party hereto which are not set forth expressly in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.05 <u>Unenforceability</u>. The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.06 <u>Counterparts</u>. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original and all of which together shall constitute one and the same instrument.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.07 <u>Section Headings</u>. The section headings contained in this Agreement are inserted for reference purposes only and shall not affect the meaning or interpretation of this Agreement.

**IN WITNESS WHEREOF**, the parties have executed this Agreement as of the date first written above.

**FAVO CAPITAL, INC.**

By: <u>.s. Vincent Napolitano</u>

Name: Vincent Napolitano Its: CEO and Director

**EXECUTIVE**

 <u>/s/ Vaughan Korte</u>

Vaughan Korte

**DIRECTOR**

**<u> </u>**<u>/s/ Shaun Quin</u>

Shaun Quin

**DIRECTOR**

<u>/s/ Glen Steward</u>

Glen Steward

## Exhibit 10.8

**FAVO CAPITAL, INC.**

**(the "Company")**

**2024 INCENTIVE PLAN**

**Section 1. PURPOSE**

The purpose of the Favo Capital, Inc. 2024 Incentive Plan is to attract, retain and motivate employees, officers, directors, consultants, agents, advisors and independent contractors of the Company and its Related Companies by providing them the opportunity to acquire a proprietary interest in the Company and to align their interests and efforts to the long-term interests of the Company's stockholders.

**Section 2. DEFINITIONS**

Certain capitalized terms used in the Plan have the meanings set forth in Appendix A.

**Section 3. ADMINISTRATION**

3.1 <u>Administration of the Plan</u>

The Plan shall be administered by the Board or its Compensation Committee. The Compensation Committee shall be composed of two or more directors, each of whom is a "non-employee director" within the meaning of Rule 16b-3(b)(3) promulgated under the Exchange Act, or any successor definition adopted by the Securities and Exchange Commission. As used in this Plan, the term "Compensation Committee" shall be construed as if followed by the words "(if any)"; nothing in this Plan requires the Board to have a Compensation Committee.

3.2 <u>Delegation</u>

Notwithstanding the foregoing, the Board may delegate responsibility for administering the Plan with respect to designated classes of Eligible Persons to different committees consisting of one or more members of the Board, subject to such limitations as the Board deems appropriate, except with respect to Awards to any Participants who are then subject to Section 16 of the Exchange Act. Members of any committee shall serve for such term as the Board may determine, subject to removal by the Board at any time. To the extent consistent with applicable law, the Board or the Compensation Committee may authorize one or more officers of the Company to grant Awards to designated classes of Eligible Persons, within limits specifically prescribed by the Board or the Compensation Committee; provided, however, that no such officer shall have or obtain authority to grant Awards to himself or herself or to any person then subject to Section 16 of the Exchange Act. All references in the Plan to the "Committee" shall be, as applicable, to the Board, the Compensation Committee or any other committee or any officer to whom the Board or the Compensation Committee has delegated authority to administer the Plan.

3.3 <u>Administration and Interpretation by Committee</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Except for the terms and conditions explicitly set forth in the Plan and to the extent permitted by applicable law, the Committee shall have full power and exclusive authority, subject to such orders or resolutions not inconsistent with the provisions of the Plan as may from time to time be adopted by the Board, to</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>select the Eligible Persons to whom Awards may from time to time be granted under the Plan;</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <u>determine the type or types of Awards to be granted to each Participant under the Plan;</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) <u>determine the number of shares of Common Stock, if any, to be covered by each Award granted under the Plan;</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) <u>determine the terms and conditions of any Award granted under the Plan;</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) <u>approve the forms of notice or agreement for use under the Plan;</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) <u>determine whether, to what extent and under what circumstances Awards may be settled in cash, shares of Common Stock or other property or canceled or suspended;</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) <u>determine whether, to what extent and under what circumstances cash, shares of Common Stock, other property and other amounts payable with respect to an Award shall be deferred either automatically or at the election of the Participant;</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) <u>interpret and administer the Plan and any instrument evidencing an Award, notice or agreement executed or entered into under the Plan;</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) <u>establish such rules and regulations as it shall deem appropriate for the proper administration of the Plan;</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) <u>delegate ministerial duties to such of the Company's employees as it so determines; and</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi) <u>make any other determination and take any other action that the Committee deems necessary or desirable for administration of the Plan.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>The Committee shall have the right, without stockholder approval, to cancel or amend outstanding Options or SARs for the purpose of repricing, replacing or regranting such Options or SARs with Options or SARs that have a purchase or grant price that is less than the purchase or grant price for the original Options or SARs except in connection with adjustments provided in Section 15.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>The effect on the vesting of an Award of a Company-approved leave of absence or a Participant's working less than full-time shall be determined by the Company's chief human resources officer or other person performing that function or, with respect to directors or executive officers, by the Committee, whose determination shall be final.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Decisions of the Committee shall be final, conclusive and binding on all persons, including the Company, any Participant, any stockholder and any Eligible Person. A majority of the members of the Committee may determine its actions.</u>

**Section 4. SHARES SUBJECT TO THE PLAN**

4.1 <u>Authorized Number of Shares</u>

Subject to adjustment from time to time as provided in subsection 15.1, a maximum of 20,000,000 shares of Common Stock shall be available for issuance under the Plan. Shares issued under the Plan shall be drawn from authorized and unissued shares or shares now held or subsequently acquired by the Company as treasury shares.

4.2 <u>Share Usage</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Shares of Common Stock covered by an Award shall not be counted as used unless and until they are actually issued and delivered to a Participant. If any Award lapses, expires, terminates or is canceled prior to the issuance of shares thereunder or if shares of Common Stock are issued under the Plan to a Participant and thereafter are forfeited to or otherwise reacquired by the Company, the shares subject to such Awards and the forfeited or reacquired shares shall again be available for issuance under the Plan. Any shares of Common Stock</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>tendered by a Participant or retained by the Company as full or partial payment to the Company for the purchase price of an Award or to satisfy tax withholding obligations in connection with an Award, or</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <u>covered by an Award that is settled in cash, or in a manner such that some or all of the shares of Common Stock covered by the Award are not issued,</u>

shall be available for Awards under the Plan. The number of shares of Common Stock available for issuance under the Plan shall not be reduced to reflect any dividends or dividend equivalents that are reinvested into additional shares of Common Stock or credited as additional shares of Common Stock subject or paid with respect to an Award.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>The Committee shall also, without limitation, have the authority to grant Awards as an alternative to or as the form of payment for grants or rights earned or due under other compensation plans or arrangements of the Company.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Notwithstanding anything in the Plan to the contrary, the Committee may grant Substitute Awards under the Plan. Substitute Awards shall not reduce the number of shares authorized for issuance under the Plan. In the event that an Acquired Entity has shares available for awards or grants under one or more preexisting plans not adopted in contemplation of such acquisition or combination, then, to the extent determined by the Committee, the shares available for grant pursuant to the terms of such preexisting plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or formula used in such acquisition or combination to determine the consideration payable to holders of common stock of the entities that are parties to such acquisition or combination) may be used for Awards under the Plan and shall not reduce the number of shares of Common Stock authorized for issuance under the Plan; provided, however, that Awards using such available shares shall not be made after the date awards or grants could have been made under the terms of such preexisting plans, absent the acquisition or combination, and shall only be made to individuals who were not employees or directors of the Company or a Related Company prior to such acquisition or combination. In the event that a written agreement between the Company and an Acquired Entity pursuant to which a merger or consolidation is completed is approved by the Board and that agreement sets forth the terms and conditions of the substitution for or assumption of outstanding awards of the Acquired Entity, those terms and conditions shall be deemed to be the action of the Committee without any further action by the Committee, except as may be required for compliance with Rule 16b-3 under the Exchange Act, and the persons holding such awards shall be deemed to be Participants.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Notwithstanding the other provisions in this subsection, the maximum number of shares that may be issued upon the exercise of Incentive Stock Options shall equal the aggregate share number stated in subsection 4.1, subject to adjustment as provided in subsection 15.1.</u>

**Section 5. ELIGIBILITY**

An Award may be granted to any employee, officer or director of the Company or a Related Company whom the Committee from time to time selects. An Award may also be granted to any consultant, agent, advisor or independent contractor for bona fide services rendered to the Company or any Related Company that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>are not in connection with the offer and sale of the Company's securities in a capital-raising transaction, and</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>do not directly or indirectly promote or maintain a market for the Company's securities.</u>

**Section 6. AWARDS**

6.1 <u>Form, Grant and Settlement of Awards</u>

The Committee shall have the authority, in its sole discretion, to determine the type or types of Awards to be granted under the Plan. Such Awards may be granted either alone or in addition to or in tandem with any other type of Award. Any Award settlement may be subject to such conditions, restrictions and contingencies as the Committee shall determine.

6.2 <u>Evidence of Awards</u>

Awards granted under the Plan shall be evidenced by a written, including an electronic, notice or agreement that shall contain such terms, conditions, limitations and restrictions as the Committee shall deem advisable and that are not inconsistent with the Plan.

6.3 <u>Deferrals</u>

The Committee may permit or require a Participant to defer receipt of the payment of any Award if and to the extent set forth in the instrument evidencing the Award at the time of grant. If any such deferral election is permitted or required, the Committee, in its sole discretion, shall establish rules and procedures for such payment deferrals, which may include the grant of additional Awards or provisions for the payment or crediting of interest or dividend equivalents, including converting such credits to deferred stock unit equivalents; provided, however, that the terms of any deferrals under this subsection shall comply with all applicable law, rules and regulations, including, without limitation, Section 409A of the Code.

6.4 <u>Dividends and Distributions</u>

Participants may, if and to the extent the Committee so determines and sets forth in the instrument evidencing the Award at the time of grant, be credited with dividends paid with respect to shares of Common Stock underlying an Award in a manner determined by the Committee in its sole discretion. The Committee may apply any restrictions to the dividends or dividend equivalents that the Committee deems appropriate. The Committee, in its sole discretion, may determine the form of payment of dividends or dividend equivalents, including cash, shares of Common Stock, Restricted Stock or Stock Units.

**Section 7. OPTIONS**

7.1 <u>Grant of Options</u>

The Committee may grant Options designated as Incentive Stock Options or Nonqualified Stock Options.

7.2 <u>Option Exercise Price</u>

The exercise price for shares purchased under an Option shall be at least 100% of the Fair Market Value on the Grant Date (and shall not be less than the minimum exercise price required by Section 422 of the Code with respect to Incentive Stock Options), except in the case of Substitute Awards.

7.3 <u>Term of Options</u>

Subject to earlier termination in accordance with the terms of the Plan and the instrument evidencing the Option, the maximum term of a Nonqualified Stock Option shall be ten years from the Grant Date.

7.4 <u>Exercise of Options</u>

The Committee shall establish and set forth in each instrument that evidences an Option the time at which, or the installments in which, the Option shall vest and become exercisable, any of which provisions may be waived or modified by the Committee at any time.

To the extent an Option has vested and become exercisable, the Option may be exercised in whole or from time to time in part by delivery to or as directed or approved by the Company of a properly executed stock option exercise agreement or notice, in a form and in accordance with procedures established by the Committee, setting forth the number of shares with respect to which the Option is being exercised, the restrictions imposed on the shares purchased under such exercise agreement, if any, and such representations and agreements as may be required by the Committee, accompanied by payment in full as described in subsection 7.5 and Section 13. An Option may be exercised only for whole shares and may not be exercised for less than a reasonable number of shares at any one time, as determined by the Committee.

7.5 <u>Payment of Exercise Price</u>

The exercise price for shares purchased under an Option shall be paid in full to the Company by delivery of consideration equal to the product of the Option exercise price and the number of shares purchased. Such consideration must be paid before the Company will issue the shares being purchased and must be in a form or a combination of forms acceptable to the Committee for that purchase, which forms may include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>cash;</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>check or wire transfer;</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>having the Company withhold shares of Common Stock that would otherwise be issued on exercise of the Option that have an aggregate Fair Market Value equal to the aggregate exercise price of the shares being purchased under the Option;</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>tendering (either actually or, so long as the Common Stock is registered under Section 12(b) or 12(g) of the Exchange Act, by attestation) shares of Common Stock owned by the Participant that have an aggregate Fair Market Value equal to the aggregate exercise price of the shares being purchased under the Option;</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>so long as the Common Stock is registered under Section 12(b) or 12(g) of the Exchange Act, and to the extent permitted by law, delivery of a properly executed exercise notice, together with irrevocable instructions to a brokerage firm designated or approved by the Company to deliver promptly to the Company the aggregate amount of proceeds to pay the Option exercise price and any withholding tax obligations that may arise in connection with the exercise, all in accordance with the regulations of the Federal Reserve Board; or</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>such other consideration as the Committee may permit.</u>

7.6 <u>Effect of Termination of Service</u>

The Committee shall establish and set forth in each instrument that evidences an Option whether the Option shall continue to be exercisable, and the terms and conditions of such exercise, after a Termination of Service, any of which provisions may be waived or modified by the Committee at any time. If not so established in the instrument evidencing the Option, the Option shall be exercisable according to the following terms and conditions, which may be waived or modified by the Committee at any time:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Any portion of an Option that is not vested and exercisable on the date of a Participant's Termination of Service shall expire on such date.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Any portion of an Option that is vested and exercisable on the date of a Participant's Termination of Service shall expire on the earliest to occur of:</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>if the Participant's Termination of Service occurs for reasons other than Cause, Retirement, Disability or death, the date that is three months after such Termination of Service;</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <u>if the Participant's Termination of Service occurs by reason of Retirement, Disability or death, the one-year anniversary of such Termination of Service; and</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) <u>the Option Expiration Date.</u>

Notwithstanding the foregoing, if a Participant dies after his or her Termination of Service but while an Option is otherwise exercisable, the portion of the Option that is vested and exercisable on the date of such Termination of Service shall expire upon the earlier to occur of (y) the Option Expiration Date and (z) the one-year anniversary of the date of death, unless the Committee determines otherwise. Also notwithstanding the foregoing, in case a Participant's Termination of Service occurs for Cause, all Options granted to the Participant shall automatically expire upon first notification to the Participant of such termination, unless the Committee determines otherwise. If a Participant's employment or service relationship with the Company is suspended pending an investigation of whether the Participant shall be terminated for Cause, all the Participant's rights under any Option shall likewise be suspended during the period of investigation. If any facts that would constitute termination for Cause are discovered after a Participant's Termination of Service, any Option then held by the Participant may be immediately terminated by the Committee, in its sole discretion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>If the exercise of the Option following a Participant's Termination of Service, but while the Option is otherwise exercisable, would be prohibited solely because the issuance of Common Stock would violate either the registration requirements under the Securities Act or the Company's insider trading policy, then the Option shall remain exercisable until the earlier of (i) the Option Expiration Date and (ii) the expiration of a period of three months (or such longer period of time as determined by the Committee in its sole discretion) after the Participant's Termination of Service during which the exercise of the Option would not be in violation of such Securities Act or insider trading policy requirements.</u>

**Section 8. INCENTIVE STOCK OPTION LIMITATIONS**

Notwithstanding any other provisions of the Plan, the terms and conditions of any Incentive Stock Options shall also comply in all respects with Section 422 of the Code, or any successor provision, and any applicable regulations thereunder, including, to the extent required thereunder, the following:

8.1 <u>Dollar Limitation</u>

To the extent the aggregate Fair Market Value (determined as of the Grant Date) of Common Stock with respect to which a Participant's Incentive Stock Options become exercisable for the first time during any calendar year (under the Plan and all other stock option plans of the Company and its parent and subsidiary corporations) exceeds $100,000, such portion in excess of $100,000 shall be treated as a Nonqualified Stock Option. In the event the Participant holds two or more such Options that become exercisable for the first time in the same calendar year, such limitation shall be applied on the basis of the order in which such Options are granted.

8.2 <u>Eligible Employees.</u>

Individuals who are not employees of the Company or one of its parent or subsidiary corporations may not be granted Incentive Stock Options.

8.3 <u>Exercise Price</u>

The exercise price of an Incentive Stock Option shall be at least 100% of the Fair Market Value of the Common Stock on the Grant Date, and in the case of an Incentive Stock Option granted to a Participant who owns more than 10% of the total combined voting power of all classes of the stock of the Company or of its parent or subsidiary corporations (a "Ten Percent Stockholder"), shall not be less than 110% of the Fair Market Value of the Common Stock on the Grant Date. The determination of more than 10% ownership shall be made in accordance with Section 422 of the Code.

8.4 <u>Option Term</u>

Subject to earlier termination in accordance with the terms of the Plan and the instrument evidencing the Option, the maximum term of an Incentive Stock Option shall not exceed ten years, and in the case of an Incentive Stock Option granted to a Ten Percent Stockholder, shall not exceed five years.

8.5 <u>Exercisability</u>

An Option designated as an Incentive Stock Option shall cease to qualify for favorable tax treatment as an Incentive Stock Option to the extent it is exercised (if permitted by the terms of the Option) (a) more than three months after the date of a Participant's Termination of Service if termination was for reasons other than death or disability, (b) more than one year after the date of a Participant's Termination of Service if termination was by reason of disability, or (c) after the Participant has been on leave of absence for more than 90 days, unless the Participant's reemployment rights are guaranteed by statute or contract.

8.6 <u>Taxation of Incentive Stock Options</u>

In order to obtain certain tax benefits afforded to Incentive Stock Options under Section 422 of the Code, the Participant must hold the shares acquired upon the exercise of an Incentive Stock Option for two years after the Grant Date and one year after the date of exercise.

A Participant may be subject to the alternative minimum tax at the time of exercise of an Incentive Stock Option. The Participant shall give the Company prompt notice of any disposition of shares acquired on the exercise of an Incentive Stock Option prior to the expiration of such holding periods.

8.7 <u>Code Definitions</u>

For the purposes of this Section, "disability" "parent corporation" and "subsidiary corporation" shall have the meanings attributed to those terms for purposes of Section 422 of the Code.

**Section 9. STOCK APPRECIATION RIGHTS**

9.1 <u>Grant of Stock Appreciation Rights</u>

The Committee may grant Stock Appreciation Rights to Participants at any time on such terms and conditions as the Committee shall determine in its sole discretion. An SAR may be granted in tandem with an Option or alone ("freestanding"). The grant price of a tandem SAR shall be equal to the exercise price of the related Option. The grant price of a freestanding SAR shall be established in accordance with procedures for Options set forth in subsection 7.2. An SAR may be exercised upon such terms and conditions and for the term as the Committee determines in its sole discretion; provided, however, that, subject to earlier termination in accordance with the terms of the Plan and the instrument evidencing the SAR, the maximum term of a freestanding SAR shall be ten years, and in the case of a tandem SAR, (a) the term shall not exceed the term of the related Option and (b) the tandem SAR may be exercised for all or part of the shares subject to the related Option upon the surrender of the right to exercise the equivalent portion of the related Option, except that the tandem SAR may be exercised only with respect to the shares for which its related Option is then exercisable.

9.2 <u>Payment of SAR Amount</u>

Upon the exercise of an SAR, a Participant shall be entitled to receive payment in an amount determined by multiplying:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>the difference between the Fair Market Value of the Common Stock on the date of exercise over the grant price of the SAR by</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>the number of shares with respect to which the SAR is exercised.</u>

At the discretion of the Committee as set forth in the instrument evidencing the Award, the payment upon exercise of an SAR may be in cash, in shares, in some combination thereof or in any other manner approved by the Committee in its sole discretion.

9.3 <u>Waiver of Restrictions</u>

Subject to subsection 18.5, the Committee, in its sole discretion, may waive any other terms, conditions or restrictions on any SAR under such circumstances and subject to such terms and conditions as the Committee shall deem appropriate.

**Section 10. STOCK AWARDS, RESTRICTED STOCK AND STOCK UNITS**

10.1 <u>Grant of Stock Awards, Restricted Stock and Stock Units</u>

The Committee may grant Stock Awards, Restricted Stock and Stock Units on such terms and conditions and subject to such repurchase or forfeiture restrictions, if any, which may be based on continuous service with the Company or a Related Company or the achievement of any performance goals, as the Committee shall determine in its sole discretion, which terms, conditions and restrictions shall be set forth in the instrument evidencing the Award.

10.2 <u>Vesting of Restricted Stock and Stock Units</u>

Upon the satisfaction of any terms, conditions and restrictions prescribed with respect to Restricted Stock or Stock Units, or upon a Participant's release from any terms, conditions and restrictions of Restricted Stock or Stock Units, as determined by the Committee, and subject to the provisions of Section 13:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>the shares of Restricted Stock covered by each Award of Restricted Stock shall become freely transferable by the Participant, and</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Stock Units shall be paid in shares of Common Stock or, if set forth in the instrument evidencing the Awards, in cash or a combination of cash and shares of Common Stock.</u>

Any fractional shares subject to such Awards shall be paid to the Participant in cash.

10.3 <u>Waiver of Restrictions</u>

Subject to subsection 18.5, the Committee, in its sole discretion, may waive the repurchase or forfeiture period and any other terms, conditions or restrictions on any Restricted Stock or Stock Unit under such circumstances and subject to such terms and conditions as the Committee shall deem appropriate.

**Section 11. PERFORMANCE AWARDS**

11.1 <u>Performance Shares</u>

The Committee may grant Awards of Performance Shares, designate the Participants to whom Performance Shares are to be awarded and determine the number of Performance Shares and the terms and conditions of each such Award. Performance Shares shall consist of a unit valued by reference to a designated number of shares of Common Stock, the value of which may be paid to the Participant by delivery of shares of Common Stock or, if set forth in the instrument evidencing the Award, of such property as the Committee shall determine, including, without limitation, cash, shares of Common Stock, other property, or any combination thereof, upon the attainment of performance goals, as established by the Committee, and other terms and conditions specified by the Committee. Subject to subsection 18.5, the amount to be paid under an Award of Performance Shares may be adjusted on the basis of such further consideration as the Committee shall determine in its sole discretion.

11.2 <u>Performance Units</u>

The Committee may grant Awards of Performance Units, designate the Participants to whom Performance Units are to be awarded and determine the number of Performance Units and the terms and conditions of each such Award. Performance Units shall consist of a unit valued by reference to a designated amount of property other than shares of Common Stock, which value may be paid to the Participant by delivery of such property as the Committee shall determine, including, without limitation, cash, shares of Common Stock, other property, or any combination thereof, upon the attainment of performance goals, as established by the Committee, and other terms and conditions specified by the Committee. Subject to subsection 18.5, the amount to be paid under an Award of Performance Units may be adjusted on the basis of such further consideration as the Committee shall determine in its sole discretion.

**Section 12. OTHER STOCK OR CASH-BASED AWARDS**

Subject to the terms of the Plan and such other terms and conditions as the Committee deems appropriate, the Committee may grant other incentives payable in cash or in shares of Common Stock under the Plan.

**Section 13. WITHHOLDING**

The Company may require the Participant to pay to the Company the amount of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>any taxes that the Company is required by applicable federal, state, local or foreign law to withhold with respect to the grant, vesting or exercise of an Award ("tax withholding obligations"); and</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>any amounts due from the Participant to the Company or to any Related Company ("other obligations").</u>

The Company shall not be required to issue any shares of Common Stock or otherwise settle an Award under the Plan until such tax withholding obligations and other obligations are satisfied. The Committee may permit or require a Participant to satisfy all or part of the Participant's tax withholding obligations and other obligations by:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>paying cash to the Company,</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <u>having the Company withhold an amount from any cash amounts otherwise due or to become due from the Company to the Participant,</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) <u>having the Company withhold a number of shares of Common Stock that would otherwise be issued to the Participant (or become vested, in the case of Restricted Stock) having a Fair Market Value equal to the tax withholding obligations and other obligations, or</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) <u>surrendering a number of shares of Common Stock the Participant already owns having a value equal to the tax withholding obligations and other obligations.</u>

The value of the shares so withheld or tendered may not exceed the employer's minimum required tax withholding rate.

**Section 14. ASSIGNABILITY**

No Award or interest in an Award may be sold, assigned, pledged (as collateral for a loan or as security for the performance of an obligation or for any other purpose) or transferred by a Participant or made subject to attachment or similar proceedings otherwise than by will or by the applicable laws of descent and distribution, except to the extent the Participant designates one or more beneficiaries on a Company-approved form who may exercise the Award or receive payment under the Award after the Participant's death. During a Participant's lifetime, an Award may be exercised only by the Participant. Notwithstanding the foregoing and to the extent permitted by Section 422 of the Code, the Committee, in its sole discretion, may permit a Participant to assign or transfer an Award subject to such terms and conditions as the Committee shall specify.

**Section 15. ADJUSTMENTS**

15.1 <u>Adjustment of Shares</u>

In the event, at any time or from time to time, a stock dividend, stock split, spin-off, combination or exchange of shares, recapitalization, merger, consolidation, distribution to stockholders other than a normal cash dividend, or other change in the Company's corporate or capital structure results in

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>the outstanding shares of Common Stock, or any securities exchanged therefor or received in their place, being exchanged for a different number or kind of securities of the Company or</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>new, different or additional securities of the Company or any other company being received by the holders of shares of Common Stock,</u>

then the Committee shall make proportional adjustments in

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>the maximum number and kind of securities available for issuance under the Plan;</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <u>the maximum number and kind of securities issuable as Incentive Stock Options as set forth in subsection 4.2; and</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) <u>the number and kind of securities that are subject to any outstanding Award and the per share price of such securities, without any change in the aggregate price to be paid therefor.</u>

The determination by the Committee, as to the terms of any of the foregoing adjustments shall be conclusive and binding. Notwithstanding the foregoing, the issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, for cash or property, or for labor or services rendered, either upon direct sale or upon the exercise of rights or warrants to subscribe therefor, or upon conversion of shares or obligations of the Company convertible into such shares or other securities, shall not affect, and no adjustment by reason thereof shall be made with respect to, outstanding Awards. Also notwithstanding the foregoing, a dissolution or liquidation of the Company or a Company Transaction shall not be governed by this subsection but shall be governed by subsections 15.2 and 15.3, respectively.

15.2 <u>Dissolution or Liquidation</u>

To the extent not previously exercised or settled, and unless otherwise determined by the Committee in its sole discretion, Awards shall terminate immediately prior to the dissolution or liquidation of the Company. To the extent a vesting condition, forfeiture provision or repurchase right applicable to an Award has not been waived by the Committee, the Award shall be forfeited immediately prior to the consummation of the dissolution or liquidation.

15.3 <u>Change in Control</u>

Notwithstanding any other provision of the Plan to the contrary, unless the Committee shall determine otherwise in the instrument evidencing the Award or in a written employment, services or other agreement between the Participant and the Company or a Related Company, in the event of a Change in Control:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>All outstanding Awards, other than Performance Shares and Performance Units, shall become fully and immediately exercisable, and all applicable deferral and restriction limitations or forfeiture provisions shall lapse, immediately prior to the Change in Control and shall terminate at the effective time of the Change in Control; provided, however, that with respect to a Change in Control that is a Company Transaction, such Awards shall become fully and immediately exercisable, and all applicable deferral and restriction limitations or forfeiture provisions shall lapse, only if and to the extent such Awards are not converted, assumed or replaced by the Successor Company. For the purposes of this paragraph, an Award shall be considered converted, assumed or replaced by the Successor Company if following the Company Transaction the option or right confers the right to purchase or receive, for each share of Common Stock subject to the Award immediately prior to the Company Transaction, the consideration (whether stock, cash or other securities or property) received in the Company Transaction by holders of Common Stock for each share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding shares); provided, however, that if such consideration received in the Company Transaction is not solely common stock of the Successor Company, the Committee may, with the consent of the Successor Company, provide for the consideration to be received upon the exercise of the Option, for each share of Common Stock subject thereto, to be solely common stock of the Successor Company substantially equal in fair market value to the per share consideration received by holders of Common Stock in the Company Transaction. The determination of such substantial equality of value of consideration shall be made by the Committee, and its determination shall be conclusive and binding.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>All Performance Shares or Performance Units earned and outstanding as of the date the Change in Control is determined to have occurred shall be payable in full at the target level in accordance with the payout schedule pursuant to the instrument evidencing the Award. Any remaining Performance Shares or Performance Units (including any applicable performance period) for which the payout level has not been determined shall be prorated at the target payout level up to and including the date of such Change in Control and shall be payable in full at the target level in accordance with the payout schedule pursuant to the instrument evidencing the Award. Any existing deferrals or other restrictions not waived by the Committee in its sole discretion shall remain in effect.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Notwithstanding paragraphs 15.3(a) and 15.3(b), the Committee, in its sole discretion, may (unless otherwise provided in the instrument evidencing the Award or in a written employment, services or other agreement between the Participant and the Company or a Related Company) instead provide in the event of a Change in Control that is a Company Transaction</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>for adjustments to the Plan and outstanding Awards as contemplated by subsection 15.1 or</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <u>that a Participant's outstanding Awards shall terminate upon or immediately prior to such Company Transaction and that such Participant shall receive, in exchange therefor, a cash payment equal to the amount (if any) by which (x) the value of the per share consideration received by holders of Common Stock in the Company Transaction, or, if the Company Transaction is a sale of assets or otherwise does not result in direct receipt of consideration by holders of Common Stock, the value of the deemed per share consideration received, in each case as determined by the Committee in its sole discretion, multiplied by the number of shares of Common Stock subject to such outstanding Awards (to the extent then vested and exercisable or whether or not then vested and exercisable, as determined by the Committee in its sole discretion) exceeds (y) if applicable, the respective aggregate exercise price or grant price for such Awards.</u>

15.4 <u>Further Adjustment of Awards</u>

Subject to subsections 15.2 and 15.3, the Committee shall have the discretion, exercisable at any time before a sale, merger, consolidation, reorganization, liquidation, dissolution or change in control of the Company, as defined by the Committee, to take such further action as it determines to be necessary or advisable with respect to Awards. Such authorized action may include (but shall not be limited to) establishing, amending or waiving the type, terms, conditions or duration of, or restrictions on, Awards so as to provide for earlier, later, extended or additional time for exercise, lifting restrictions and other modifications, and the Committee may take such actions with respect to all Participants, to certain categories of Participants or only to individual Participants. The Committee may take such action before or after granting Awards to which the action relates and before or after any public announcement with respect to such sale, merger, consolidation, reorganization, liquidation, dissolution or change in control that is the reason for such action.

15.5 <u>No Limitations</u>

The grant of Awards shall in no way affect the Company's right to adjust, reclassify, reorganize or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets.

15.6 <u>Fractional Shares</u>

In the event of any adjustment in the number of shares covered by any Award, each such Award shall cover only the number of full shares resulting from such adjustment.

15.7 <u>Section 409A of the Code</u>

Notwithstanding anything in this Plan to the contrary,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>any adjustments made pursuant to this Section 15 or any other amendments to Awards that are considered "deferred compensation" within the meaning of Section 409A of the Code shall be made in compliance with the requirements of Section 409A of the Code and</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>any adjustments made pursuant to this Section 15 or any other amendments to Awards that are not considered "deferred compensation" subject to Section 409A of the Code</u>

shall be made in such a manner as to ensure that after such adjustment or amendment the Awards either

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>continue not to be subject to Section 409A of the Code or</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <u>comply with the requirements of Section 409A of the Code.</u>

**Section 16. MARKET STANDOFF**

In the event of an underwritten public offering by the Company of its equity securities pursuant to an effective registration statement filed under the Securities Act, no person may sell, make any short sale of, loan, hypothecate, pledge, grant any option for the purchase of, or otherwise dispose of or transfer for value or otherwise agree to engage in any of the foregoing transactions with respect to any shares issued pursuant to an Award granted under the Plan without the prior written consent of the Company or its underwriters. Such limitations shall be in effect for such period of time as may be requested by the Company or such underwriters; provided, however, that in no event shall such period exceed

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>180 days after the effective date of the registration statement for such public offering or</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>such longer period requested by the underwriter as is necessary to comply with regulatory restrictions on the publication of research reports (including, but not limited to, NYSE Rule 472 or NASD Conduct Rule 2711).</u>

In the event of any stock split, stock dividend, recapitalization, combination of shares, exchange of shares or other change affecting the Company's outstanding Common Stock effected as a class without the Company's receipt of consideration, any new, substituted or additional securities distributed with respect to any shares issued as or pursuant to an Award under the Plan shall be immediately subject to the provisions of this Section 16, to the same extent such shares are at such time covered by such provisions. In order to enforce the limitations of this Section 16, the Company may impose stop-transfer instructions with respect to the purchased shares until the end of the applicable standoff period.

**Section 17. AMENDMENT AND TERMINATION**

17.1 <u>Amendment, Suspension or Termination</u>

The Board or the Compensation Committee may amend, suspend or terminate the Plan or any portion of the Plan at any time and in such respects as it shall deem advisable; provided, however, that, to the extent required by applicable law, regulation or stock exchange rule, stockholder approval shall be required for any amendment to the Plan; and provided, further, that any amendment that requires stockholder approval may be made only by the Board and not by the Compensation Committee. Subject to subsection 17.3, the Committee may amend the terms of any outstanding Award, prospectively or retroactively.

17.2 <u>Term of the Plan</u>

Unless sooner terminated as provided herein, the Plan shall terminate 10 years from the Effective Date. After the Plan is terminated, no future Awards may be granted, but Awards previously granted shall remain outstanding in accordance with their applicable terms and conditions and the Plan's terms and conditions. Notwithstanding the foregoing, no Incentive Stock Options may be granted more than 10 years after the later of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>the adoption of the Plan by the Board and</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>the adoption by the Board of any amendment to the Plan that constitutes the adoption of a new plan for purposes of Section 422 of the Code.</u>

17.3 <u>Consent of Participant</u>

The amendment, suspension or termination of the Plan or a portion thereof or the amendment of an outstanding Award shall not, without the Participant's consent, materially adversely affect any rights under any Award theretofore granted to a Participant under the Plan. Any change or adjustment to an outstanding Incentive Stock Option shall not, without the consent of the Participant, be made in a manner so as to constitute a "modification" that would cause such Incentive Stock Option to fail to continue to qualify as an Incentive Stock Option. Notwithstanding the foregoing, any adjustments made pursuant to Section 15 shall not be subject to these restrictions.

**Section 18. GENERAL**

18.1 <u>No Individual Rights</u>

No individual or Eligible Person shall have any claim to be granted any Award under the Plan, and the Company has no obligation for uniformity of treatment of Eligible Persons or Participants under the Plan. Furthermore, nothing in the Plan or any Award granted under the Plan shall be deemed to constitute an employment contract or confer or be deemed to confer on any Participant any right to continue in the employ of, or to continue any other relationship with, the Company or any Related Company or limit in any way the right of the Company or any Related Company to terminate a Participant's employment or other relationship at any time, with or without cause.

18.2 <u>Issuance of Shares</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>the Participant to represent and warrant at the time of any such exercise or receipt that such shares are being purchased or received only for the Participant's own account and without any present intention to sell or distribute such shares and</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>such other action or agreement by the Participant as may from time to time be necessary to comply with the federal, state and foreign securities laws.</u>

At the option of the Company, a stop-transfer order against any such shares may be placed on the official stock books and records of the Company, and a legend indicating that such shares may not be pledged, sold or otherwise transferred, unless an opinion of counsel (satisfactory to the Company, in its sole discretion) is provided stating that such transfer is not in violation of any applicable law or regulation, may be stamped on stock certificates to ensure exemption from registration. The Committee may also require the Participant to execute and deliver to the Company a purchase agreement or such other agreement as may be in use by the Company at such time that describes certain terms and conditions applicable to the shares. To the extent the Plan or any instrument evidencing an Award provides for issuance of stock certificates to reflect the issuance of shares of Common Stock, the issuance may be effected on a noncertificated basis, to the extent not prohibited by applicable law or the applicable rules of any stock exchange.

18.3 <u>Indemnification</u>

Each person who is or shall have been a member of the Board, or a committee appointed by the Board, or an officer of the Company to whom authority was delegated in accordance with Section 3, shall be indemnified and held harmless by the Company against and from any loss, cost, liability or expense that may be imposed upon or reasonably incurred by such person in connection with or resulting from any claim, action, suit or proceeding to which such person may be a party or in which such person may be involved by reason of any action taken or failure to act under the Plan and against and from any and all amounts paid by such person in settlement thereof, with the Company's approval, or paid by such person in satisfaction of any judgment in any such claim, action, suit or proceeding against such person; provided, however, that such person shall give the Company an opportunity, at its own expense, to handle and defend the same before such person undertakes to handle and defend it on such person's own behalf. This duty to indemnify shall not apply to the extent that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>such loss, cost, liability or expense is a result of such person's own willful misconduct or</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>such indemnification is expressly prohibited by statute.</u>

The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such person may be entitled under the Company's certificate of incorporation or bylaws, as a matter of law, or otherwise, or of any power that the Company may have to indemnify or hold harmless.

18.4 <u>No Rights as a Stockholder</u>

Unless otherwise provided by the Committee or in the instrument evidencing the Award or in a written employment, services or other agreement, no Award, other than a Stock Award, shall entitle the Participant to any cash dividend, voting or other right of a stockholder unless and until the date of issuance under the Plan of the shares that are the subject of such Award.

18.5 <u>Compliance with Laws and Regulations</u>

In interpreting and applying the provisions of the Plan, any Option granted as an Incentive Stock Option pursuant to the Plan shall, to the extent permitted by law, be construed as an "incentive stock option" within the meaning of Section 422 of the Code. Any Award granted pursuant to the Plan is intended to comply with the requirements of Section 409A of the Code, including any applicable regulations and guidance issued thereunder, and including transition guidance, to the extent Section 409A of the Code is applicable thereto, and the terms of the Plan and any Award granted under the Plan shall be interpreted, operated and administered in a manner consistent with this intention to the extent the Committee deems necessary or advisable to comply with Section 409A of the Code and any official guidance issued thereunder. Any payment or distribution that is to be made under the Plan (or pursuant to an Award under the Plan) to a Participant who is a "specified employee" of the Company within the meaning of that term under Section 409A of the Code and as determined by the Committee, on account of a "separation from service" within the meaning of that term under Section 409A of the Code, may not be made before the date which is six months after the date of such "separation from service" unless the payment or distribution is exempt from the application of Section 409A of the Code by reason of the short-term deferral exemption or otherwise. Notwithstanding any other provision in the Plan, the Committee, to the extent it deems necessary or advisable in its sole discretion, reserves the right, but shall not be required, to unilaterally amend or modify the Plan and any Award granted under the Plan so that the Award qualifies for exemption from or complies with Section 409A of the Code; provided, however, that the Committee makes no representations that Awards granted under the Plan shall be exempt from or comply with Section 409A of the Code and makes no undertaking to preclude Section 409A of the Code from applying to Awards granted under the Plan.

18.6 <u>Participants in Other Countries or Jurisdictions</u>

Without amending the Plan, the Committee may grant Awards to Eligible Persons who are foreign nationals on such terms and conditions different from those specified in the Plan as may, in the judgment of the Committee, be necessary or desirable to foster and promote achievement of the purposes of the Plan and shall have the authority to adopt such modifications, procedures, subplans and the like as may be necessary or desirable to comply with provisions of the laws or regulations of other countries or jurisdictions in which the Company or any Related Company may operate or have employees to ensure the viability of the benefits from Awards granted to Participants employed in such countries or jurisdictions, meet the requirements that permit the Plan to operate in a qualified or tax-efficient manner, comply with applicable foreign laws or regulations and meet the objectives of the Plan.

18.7 <u>No Trust or Fund</u>

The Plan is intended to constitute an "unfunded" plan. Nothing contained herein shall require the Company to segregate any monies or other property, or shares of Common Stock, or to create any trusts, or to make any special deposits for any immediate or deferred amounts payable to any Participant, and no Participant shall have any rights that are greater than those of a general unsecured creditor of the Company.

18.8 <u>Successors</u>

All obligations of the Company under the Plan with respect to Awards shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all the business and/or assets of the Company.

18.9 <u>Severability</u>

If any provision of the Plan or any Award is determined to be invalid, illegal or unenforceable in any jurisdiction, or as to any person, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to applicable laws, or, if it cannot be so construed or deemed amended without, in the Committee's determination, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, person or Award, and the remainder of the Plan and any such Award shall remain in full force and effect.

18.10 <u>Choice of Law and Venue</u>

The Plan, all Awards granted thereunder and all determinations made and actions taken pursuant hereto, to the extent not otherwise governed by the laws of the United States, shall be governed by the laws of the State of Nevada without giving effect to principles of conflicts of law. Participants irrevocably consent to the nonexclusive jurisdiction and venue of the state and federal courts located in the State of Nevada.

18.11 <u>Legal Requirements</u>

The granting of Awards and the issuance of shares of Common Stock under the Plan are subject to all applicable laws, rules and regulations and to such approvals by any governmental agencies or national securities exchanges as may be required.

**Section 19. EFFECTIVE DATE**

The effective date (the "Effective Date") is the date on which the Plan is adopted by the Board. If the stockholders of the Company do not approve the Plan within 12 months after the Board's adoption of the Plan, any Incentive Stock Options granted under the Plan will be treated as Nonqualified Stock Options.

**APPENDIX A**

**DEFINITIONS**

"Acquired Entity" means any entity acquired by the Company or a Related Company or with which the Company or a Related Company merges or combines.

"Award" means any Option, Stock Appreciation Right, Stock Award, Restricted Stock, Stock Unit, Performance Share, Performance Unit, or other incentive payable in shares of Common Stock as may be designated by the Committee from time to time.

"Board" means the Board of Directors of the Company.

"Cause" means, unless otherwise defined in the instrument evidencing an Award or in a written employment, services or other agreement between the Participant and the Company or a Related Company, dishonesty, fraud, serious or willful misconduct, unauthorized use or disclosure of confidential information or trade secrets, or conduct prohibited by law (except minor violations), in each case as determined by the Company's chief human resources officer or other person performing that function or, in the case of directors and executive officers, the Committee, whose determination shall be conclusive and binding.

"Change in Control" means, unless the Committee determines otherwise with respect to an Award at the time the Award is granted or unless otherwise defined for purposes of an Award in a written employment, services or other agreement between the Participant and the Company or a Related Company, the occurrence of any of the following events:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>An acquisition by any individual, entity or group, within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act, (a "Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of more than fifty percent (50%) of either:</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>the then outstanding shares of Common Stock of the Company (the "Outstanding Common Stock") or</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <u>the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the "Outstanding Voting Securities");</u>

excluding, however, the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) <u>any acquisition directly from the Company, other than an acquisition by virtue of the exercise, exchange or conversion of any Convertible Securities unless such securities were themselves acquired directly from the Company,</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) <u>any acquisition by the Company;</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) <u>any acquisition by any Person pursuant to a transaction which complies with clauses (b)(i), (b)(ii) and (b)(iii) of the definition of Company Transaction; or</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Within any period of 24 consecutive months, a change in the composition of the Board such that the individuals who, immediately prior to such period, constituted the Board (such Board shall be hereinafter referred to as the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, for purposes hereof, that any individual who becomes a member of the Board during such period, whose election, or nomination for election by the Company's stockholders, was approved by a vote of at least a majority of those individuals who are members of the Board and who were also members of the Incumbent Board (or deemed to be such pursuant to this proviso) shall be considered as though such individual were a member of the Incumbent Board; but, provided further, that any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Board shall not be so considered as a member of the Incumbent Board; or</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>A Company Transaction; or</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>The approval by the stockholders of the Company of a complete liquidation or dissolution of the Company, other than to an entity pursuant to a transaction which would comply with clauses (1), (2) and (3) of the definition of "Company Transaction", assuming for this purpose that such transaction were a Company Transaction.</u>

For purposes of the definition of "Change of Control" and "Company Transaction", a series of transactions undertaken with a common purpose shall be treated as a single transaction that begins at the consummation of the first transaction in the series and ends at the consummation of the last transaction in the series.

"Company Transaction" means the consummation of

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>a reorganization, merger or consolidation of the Company or</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>the sale or other disposition of all or substantially all of the assets of the Company and its direct and indirect subsidiaries taken as a whole, except in each case a transaction pursuant to which</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>all or substantially all of the individuals and entities who are the beneficial owners, respectively, of the Outstanding Common Stock and Outstanding Voting Securities immediately prior to such transaction will beneficially own, directly or indirectly, more than sixty percent (60%) of, respectively, the outstanding shares of common stock, and the combined voting power of the outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the entity resulting from such transaction (including, without limitation, an entity which as a result of such transaction owns the Company or all or substantially all of the Company's assets, either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such transaction, of the Outstanding Common Stock and Outstanding Voting Securities, as the case may be,</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <u>no person (other than the Company) will beneficially own, directly or indirectly, more than twenty-five percent (25%) of, respectively, the outstanding shares of common stock of the Company resulting from such transaction or the combined voting power of the outstanding voting securities of such Company entitled to vote generally in the election of directors, except to the extent that such ownership existed with respect to the Company prior to the transaction, and</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) <u>individuals who were members of the Board immediately prior to the approval by the stockholders of the Company of such transaction will constitute at least a majority of the members of the board of directors of the Company resulting from such transaction.</u>

"Convertible Security" means any security convertible into or exchangeable for shares of Common Stock of the Company, or any option, warrant or other right to acquire shares of Common Stock of the Company.

"Code" means the Internal Revenue Code of 1986, as amended from time to time.

"Committee" has the meaning set forth in subsection 3.2.

"Common Stock" means the common stock of the Company.

"Company" means Favo Capital, Inc., a Nevada corporation

"Compensation Committee" means the Compensation Committee (if any) of the Board.

"Disability" means, unless otherwise defined by the Committee for purposes of the Plan or in the instrument evidencing an Award or in a written employment, services or other agreement between the Participant and the Company or a Related Company, a mental or physical impairment of the Participant that is expected to result in death or that has lasted or is expected to last for a continuous period of 12 months or more and that causes the Participant to be unable to perform his or her material duties for the Company or a Related Company and to be engaged in any substantial gainful activity, in each case as determined by the Company's chief human resources officer or other person performing that function or, in the case of directors and executive officers, the Committee, whose determination shall be conclusive and binding.

"Effective Date" has the meaning set forth in Section 19.

"Eligible Person" means any person eligible to receive an Award as set forth in Section 5.

"Entity" means any individual, entity or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act).

"Exchange Act" means the Securities Exchange Act of 1934, as amended from time to time.

"Fair Market Value" means the closing price for the Common Stock on any given date during regular trading, or if not trading on that date, such price on the last preceding date on which the Common Stock was traded, unless determined otherwise by the Committee using such methods or procedures as it may establish.

"Grant Date" means the later of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>the date on which the Committee completes the corporate action authorizing the grant of an Award or such later date specified by the Committee and</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>the date on which all conditions precedent to an Award have been satisfied, provided that conditions to the exercisability or vesting of Awards shall not defer the Grant Date.</u>

"Incentive Stock Option" means an Option granted with the intention that it qualify as an "incentive stock option" as that term is defined for purposes of Section 422 of the Code or any successor provision.

"including", "include", "includes" and words of similar import shall be construed broadly as if followed by the phrase "without limitation".

"Nonqualified Stock Option" means an Option other than an Incentive Stock Option.

"Option" means a right to purchase Common Stock granted under Section 7. .

"Option Expiration Date" means the last day of the maximum term of an Option.

"Outstanding Company Common Stock" has the meaning set forth in the definition of "Change in Control."

"Outstanding Company Voting Securities" has the meaning set forth in the definition of "Change in Control."

"Parent Company" means a company or other entity which as a result of a Company Transaction owns the Company or all or substantially all of the Company's assets either directly or through one or more subsidiaries.

"Participant" means any Eligible Person to whom an Award is granted.

"Performance Award" means an Award of Performance Shares or Performance Units granted under Section 11.

"Performance Share" means an Award of units denominated in shares of Common Stock granted under subsection 11.1.

"Performance Unit" means an Award of units denominated in cash or property other than shares of Common Stock granted under subsection 11.2.

"Plan" means this Favo Capital, Inc. 2024 Incentive Plan.

''Related Company" means any entity that is directly or indirectly controlled by, in control of or under common control with the Company.

"Restricted Stock" means an Award of shares of Common Stock granted under Section 10. , the rights of ownership of which are subject to restrictions prescribed by the Committee.

"Retirement" means, unless otherwise defined in the instrument evidencing the Award or in a written employment, services or other agreement between the Participant and the Company or a Related Company, retirement as defined for purposes of the Plan by the Committee or the Company's chief human resources officer or other person performing that function or, if not so defined, means Termination of Service on or after the date the Participant reaches "normal retirement age" as that term is defined in Section 411(a)(8) of the Code.

"Securities Act" means the Securities Act of 1933, as amended from time to time.

"Stock Appreciation Right" or "SAR" means a right granted under subsection 9.1 to receive the excess of the Fair Market Value of a specified number of shares of Common Stock over the grant price.

"Stock Award" means an Award of shares of Common Stock granted under Section 10, the rights of ownership of which are not subject to restrictions prescribed by the Committee.

"Stock Unit" means an Award denominated in units of Common Stock granted under Section 10.

"Substitute Awards" means Awards granted or shares of Common Stock issued by the Company in substitution or exchange for awards previously granted by an Acquired Entity.

"Successor Company" means the surviving company, the successor company or Parent Company, as applicable, in connection with a Company Transaction.

"Termination of Service" means a termination of employment or service relationship with the Company or a Related Company for any reason, whether voluntary or involuntary, including by reason of death, Disability or Retirement. Any question as to whether and when there has been a Termination of Service for the purposes of an Award and the cause of such Termination of Service shall be determined by the Company's chief human resources officer or other person performing that function or, with respect to directors and executive officers, by the Committee, whose determination shall be conclusive and binding. Transfer of a Participant's employment or service relationship between the Company and any Related Company shall not be considered a Termination of Service for purposes of an Award. Unless the Committee determines otherwise, a Termination of Service shall be deemed to occur if the Participant's employment or service relationship is with an entity that has ceased to be a Related Company. A Participant's change in status from an employee of the Company or a Related Company to a consultant, advisor or independent contractor of the Company or a Related Company or a change in status from a consultant, advisor or independent contractor of the Company or a Related Company to an employee of the Company or a Related Company, shall not be considered a Termination of Service.

"Vesting Commencement Date" means the Grant Date or such other date selected by the Committee as the date from which an Award begins to vest.

**PLAN ADOPTION AND AMENDMENTS/ADJUSTMENTS**

**SUMMARY PAGE**

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| | | | |
|:---|:---|:---|:---|
| &nbsp;&nbsp; Date of Board<br> Action | &nbsp;&nbsp;Action | &nbsp;&nbsp; Section/Effect<br> of Amendment | &nbsp;&nbsp; Date of Shareholder<br> Approval |
| **<u>August 8</u>, 2024** | **Initial Plan Adoption** |  | **<u>August 8</u>, 2024** |

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## Exhibit 10.9

**CONSULTING AGREEMENT**

This Consulting Agreement (the "Agreement") is made and entered into this 25<sup>th</sup>, day of October 2024 (the "Executed Date") and the 01<sup>st</sup>, day of June 2023 (the "Effective Date") by and between Favo Capital, Inc., a Nevada corporation with its principal place of business located at 4300 N. University Drive Suite D-105 Lauderhill, Florida 33351 (the "Company") and Favo Holdings, LLC, a Delaware limited liability company with his principal place of business located at 1025 Old Country Road, Westbury, NY 11590 (the "Consultant") (hereinafter referred to individually as a "Party" and collectively as "the Parties").

WHEREAS, the Company has two divisions with a dual investment strategy consisting of: (1) a Funding Division for providing Small and Medium Sized Businesses with Funding Solutions through Merchant Cash Advances ("MCA's"), with the majority of its portfolio to be invested in the MCA Business; and 2. a Real Estate Holdings Division, which has not yet commenced operations, to engage in various Real Estate Holdings that can provide durable, predictable cash flow to the Company;

WHEREAS, the Consultant has expertise in the areas of the Company's business; and

WHEREAS, the Company desires to engage the Consultant to provide certain management services in the area of Consultant's expertise and the Consultant is willing to provide such services to the Company;

NOW, THEREFORE, in consideration of the premises and promises, warranties and representations herein contained, it is agreed as follows:

**1. <u>Engagement and Services</u>**

(a) <u>Engagement</u>. The Company hereby engages the Consultant to provide and perform the services set forth in Exhibit A attached hereto (the "Services"), and the Consultant hereby accepts the engagement.

(b) <u>Standard of Services</u>. All Services to be provided by Consultant shall be performed with promptness and diligence in a workmanlike manner and at a level of proficiency to be expected of a consultant with the background and experience that Consultant has represented it has. The Company shall provide such access to its information, property and personnel as may be reasonably required in order to permit the Consultant to perform the Services.

(c) <u>Tools, Instruments and Equipment</u>. Consultant shall be provided the tools, instruments and equipment and place of performing the Services, as agreed between the Parties.

(d) <u>Representation and Warranty</u>. Consultant represents and warrants to the Company that it is under no contractual or other restrictions or obligations which are inconsistent with the execution of this Agreement or which will interfere with the performance of the Services.

**2. <u>Consultancy Period</u>**

(a) <u>Commencement</u>. This Agreement shall commence on the Effective Date and shall remain in effect until the completion of the Services or the earlier termination of this Agreement as provided in Article 2 (b) (the "Consultancy Period").

(b) <u>Termination</u>. This Agreement may be terminated by the Company, without cause and without liability, by giving thirty (30) calendar days written notice of such termination to the Consultant, after the term set forth in the "Exhibit A". This Agreement may be terminated by either Party by giving seven (7) calendar days written notice of such termination to the other Party in the event of a material breach by the other Party. "Material breach" shall include: (i) any violation of the terms of Articles 1 (d), 3, 4, 5, 6, 7, 8, 10 and 11, (ii) any other breach that a Party has failed to cure within fourteen (14) calendar days after receipt of written notice by the other Party, (iii) the death or physical or mental incapacity of Consultant or any key person performing the Services on its behalf as a result of which the Consultant or such key person becomes unable to continue the proper performance of the Services, (iv) an act of gross negligence or wilful misconduct of a Party, and (v) the insolvency, liquidation or bankruptcy of a Party.

(c) <u>Effect of Termination</u>. Upon the effective date of termination of this Agreement, all legal obligations, rights and duties arising out of this Agreement shall terminate except for such legal obligations, rights and duties as shall have accrued prior to the effective date of termination and except as otherwise expressly provided in this Agreement.

**3. <u>Consultancy Fee and Expenses</u>**

(a) <u>Consultancy Fee</u>. In consideration of the Services to be rendered hereunder, the Company shall pay Consultant a Consultancy fee payable at the time and pursuant to the procedures set forth in Exhibit A (the "Consultancy Fee").

(b) <u>Expenses</u>. Consultant shall be entitled to reimbursement for all pre-approved expenses reasonably incurred in the performance of the Services, upon submission and approval of written statements and receipts in accordance with the then regular procedures of the Company.

**4. <u>Work Product and License</u>**

(a) <u>Defined</u>. In this Agreement the term "Work Product" shall mean all work product generated by Consultant solely or jointly with others in the performance of the Services, including, but not limited to, any and all information, notes, material, drawings, records, coding, diagrams, formulae, processes, technology, firmware, software, know-how, designs, ideas, discoveries, inventions, improvements, copyrights, trademarks and trade secrets.

(b) <u>Ownership</u>. Consultant agrees to assign and does hereby assign to Company all right, title and interest in and to the Work Product. All Work Product shall be the sole and exclusive property of the Company and Consultant will not have any rights of any kind whatsoever in such Work Product. Consultant agrees, at the request and cost of Company, to promptly sign, execute, make and do all such deeds, documents, acts and things as Company may reasonably require or desire to perfect Company's entire right, title, and interest in and to any Work Product. Consultant will not make any use of any of the Work Product in any manner whatsoever without the Company's prior written consent. All Work Product shall be promptly communicated to Company.

**5. <u>Confidential Information</u>**

(a) <u>Defined</u>. In this Agreement the term "Confidential Information" shall mean the Work Product and any and all information relating to the Company's business, including, but not limited to, research, developments, product plans, products, services, diagrams, formulae, processes, techniques, technology, firmware, software, coding, know-how, designs, ideas, discoveries, inventions, improvements, copyrights, trademarks, trade secrets, customers, suppliers, markets, marketing, finances disclosed by Company either directly or indirectly in writing, orally or visually, to Consultant. Confidential Information does not include information which: (i) is in or comes into the public domain without breach of this Agreement by the Consultant; (ii) was in the possession of the Consultant prior to receipt from the Company and was not acquired by the Consultant from the Company under an obligation of confidentiality or non-use; (iii) is acquired by the Consultant from a third party not under an obligation of confidentiality or non-use to the Company; or (iv) is independently developed by the Consultant without use of any Confidential Information of the Company.

(b) <u>Obligations of Non-Disclosure and Non-Use</u>. Unless otherwise agreed to in advance and in writing by the Company, Consultant will not, except as required by law or court order, use the Confidential Information for any purpose whatsoever other than the performance of the Services or disclose the Confidential Information to any third party. Consultant may disclose the Confidential Information only to those of its employees who need to know such information. In addition, prior to any disclosure of such Confidential Information to any such employee, such employee shall be made aware of the confidential nature of the Confidential Information and shall execute, or shall already be bound by, a non-disclosure agreement containing terms and conditions consistent with the terms and conditions of this Agreement. In any event, Consultant shall be responsible for any breach of the terms and conditions of this Agreement by any of its employees. Consultant shall use the same degree of care to avoid disclosure of the Confidential Information as it employs with respect to its own Confidential Information of like importance, but not less than a reasonable degree of care.

(c) <u>Return of Confidential Information</u>. Upon the termination or expiration of this Agreement for any reason, or upon Company's earlier request, Consultant will deliver to Company all of Company's property or Confidential Information in tangible form that Consultant may have in its possession or control.

**6. <u>Interference with Business</u>**

(a) <u>Non-Competition</u>. During the term of this Agreement and for one (1) year thereafter, Consultant will engage in no business or other activities which are, directly or indirectly, competitive with the business activities of the Company without obtaining the prior written consent of the Company.

(b) <u>Non-Solicitation</u>. During the term of this Agreement and for one (1) year thereafter, Consultant shall not: (i) divert or attempt to divert from the Company any business of any kind in which it is engaged, including, without limitation, the solicitation of or interference with any of its suppliers or customers, or (ii) employ, solicit for employment, or recommend for employment any person employed by the Company.

**7. <u>Insurance</u>**

Consultant shall maintain at its sole expense liability insurance covering the performance of the Services by Consultant. Such insurance coverage shall have limits and terms reasonably satisfactory to Company, and Company may require Consultant to provide to Company a certificate of insurance evidencing such coverage.

**8. <u>Independent Contractor</u>**

The Consultant agrees that all Services will be rendered by it as an independent contractor and that this Agreement does not create an employer-employee relationship between the Consultant and the Company. The Consultant shall have no right to receive any employee benefits provided by the Company to its employees. Consultant agrees to pay all taxes due in respect of the Consultancy Fee and to indemnify the Company in respect of any obligation that may be imposed on the Company to pay any such taxes or resulting from Consultant's being determined not to be an independent contractor. This Agreement does not authorize the Consultant to act for the Company as its agent or to make commitments on behalf of the Company.

**9. <u>Force Majeure</u>**

Either Party shall be excused from any delay or failure in performance required hereunder if caused by reason of any occurrence or contingency beyond its reasonable control, including, but not limited to, acts of God, acts of war, fire, insurrection, strikes, lock-outs or other serious labor disputes, riots, earthquakes, floods, explosions or other acts of nature. The obligations and rights of the Party so excused shall be extended on a day-to-day basis for the time period equal to the period of such excusable interruption.

**10. <u>Non-Publicity</u>**

Each of Company and Consultant agree not to disclose outside of their regulatory scope, the existence or contents of this Agreement to any third party without the prior written consent of the other Party except: (i) to its advisors, attorneys or auditors who have a need to know such information, (ii) as required by law or court order, (iii) as required in connection with the reorganization of a Party, or its merger into any other corporation, or the sale by a Party of all or substantially all of its properties or assets, or (iv) as may be required in connection with the enforcement of this Agreement.

**11. <u>Assignment</u>**

The Services to be performed by Consultant hereunder are personal in nature, and Company has engaged Consultant as a result of Consultant's expertise relating to such Services. Consultant, therefore, agrees that it will not assign, sell, transfer, delegate or otherwise dispose of this Agreement or any right, duty or obligation under this Agreement without the Company's prior written consent. Nothing in this Agreement shall prevent the assignment by the Company of this Agreement or any right, duty or obligation hereunder to any third party.

**12. <u>Injunctive Relief</u>**

Consultant acknowledges that a violation of Articles 4, 5 or 6 would cause immediate and irreparable harm to the Company for which money damages would be inadequate. Therefore, the Company will be entitled to injunctive relief for Consultant's breach of any of its obligations under the said Articles without proof of actual damages and without the posting of bond or other security. Such remedy shall not be deemed to be the exclusive remedy for such violation, but shall be in addition to all other remedies available at law or in equity.

**13. <u>Governing Law and Dispute Resolution</u>**

This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada, without giving effect to any choice of law or conflict of law provisions. The Parties consent to the exclusive jurisdiction and venue in the courts of Nevada in the city of Las Vegas.

**14. <u>General</u>**

This Agreement constitutes the entire agreement of the Parties on the subject hereof and supersedes all prior understandings and instruments on such subject. This Agreement may not be modified other than by a written instrument executed by duly authorized representatives of the Parties.

No waiver of any provision of this Agreement shall constitute a waiver of any other provision(s) or of the same provision on another occasion. Failure of either Party to enforce any provision of this Agreement shall not constitute a waiver of such provision or any other provision(s) of this Agreement.

Should any provision of this Agreement be held by a court of competent jurisdiction to be illegal, invalid or unenforceable, such provision may be modified by such court in compliance with the law giving effect to the intent of the Parties and enforced as modified. All other terms and conditions of this Agreement shall remain in full force and effect and shall be construed in accordance with the modified provision.

**15. <u>Survival of Provisions</u>**

The following provision of this Agreement shall survive the termination of this Agreement: Articles 2 (c), 3, 4, 5, 6, 7, 8, 10 and 15 and all other provisions of this Agreement that by their nature extend beyond the termination of this Agreement.

IN WITNESS WHEREOF, and intending to be legally bound, the Parties have duly executed this Agreement by their authorized representatives as of the date first written above.

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| | |
|:---|:---|
| &nbsp;&nbsp; Favo Capital, Inc.<br>By: <u>/s/ Vincent Napolitano</u><br> Name: Vincent Napolitano<br> Title: Director<br>By:<u>/s/ Glen Steward</u><br> Name: Glen Steward<br> Title: Director | &nbsp;&nbsp; Favo Holdings, LLC<br><u>/s/ Shaun Quin</u><br> Name: Shaun Quin<br> Title: Manager<br>|

---

**Exhibit A (the "Consultancy Services, Fee and Term")**

1. <u>Services.</u> Contribute services to the Company including but not limited to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Meeting with the Company's staff to understand its internal processes and procedures

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Mapping out the Company's organizational structure and analysing its culture

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Reviewing Company's policies, procedures, data, and accounts

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Implementation of the Company's Policies and Procedures

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Identifying weaknesses in the Company's operations

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Making suggestions and implementation strategies for improving systems and processes

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Making introductions to the Company for possible mergers, acquisitions, joint ventures, and strategic agreements

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Assisting with introductions of debt or equity funding for the Company

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Training staff in new systems and processes; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Monitoring outcomes and rates of improvement

2. <u>Term.</u> The initial term of the Agreement shall be for 12 months and will be reviewed annually based on performance of services in this agreement. The annual renewal of this Agreement will be reviewed 60 days prior to the Annual Board of Directors meeting of 12<sup>th</sup> April of each year for renewal and approval or decline as agreed to by the Board of Directors of FAVO Capital, Inc.

3. Compensation. $85,000 monthly.

## Exhibit 10.10

**BUSINESS COMMISSION AGREEMENT**

**THIS BUSINESS COMMISSION AGREEMENT** (this "***Agreement***") is effective as of December 21st 2023 (the "***Effective Date***") by and between **FAVO CAPITAL, INC.**, a Nevada corporation with its principal place of business at 1025 Old Country Road, Suite 421 Westbury, NY 11590 ("***Favo Capital***"), and **ROBINPAWS LLC**, a Florida limited liability company with a principal place of business at 4300 N. University Drive Suite D-105 Lauderhill Florida 3335 ("LLC") which is solely owned by ROBIN NADEAU-CAMUS ("***Camus***").

**WHEREAS,** Favo Capital, Camus and certain other entities owned by Camus identified in the definition of Business below (the "***Other Entities***") are parties to that certain Asset Purchase Agreement (the "***Purchase Agreement***") dated as of even date herewith.

**WHEREAS,** Favo Capital and LLC are entering into this Agreement as a condition of the Purchase Agreement for LLC, through Camus or its other authorized parties to refer both new business clients and renewals of existing business clients of the LLC or the Other Entities to services provided by Favo Capital in exchange for commissions, as set forth herein.

**NOW, THEREFORE,** in consideration of these premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. DEFINED TERMS

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.1** "***Business***" shall mean the business acquired by Favo Capital in connection with the Purchase Agreement with Camus and her companies, DBOSS Funding, LLC (dba Simplified Funding), a Florida limited liability company, LendTech CRM Solutions, LLC, a Florida limited liability company and Believe PMF EIRL, a company formed in the Dominican Republic.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.2** "***Favo Capital Marks***" shall mean all Favo Capital's trademarks, service marks and/or logos that Favo Capital acquired in the Purchase Agreement are reasonably applicable to the Business, including, without limitation, those listed on **Exhibit A** hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.3** "***Favo Capital Sales***" shall mean gross fees, and/or all other amounts actually received by Favo Capital, its affiliates and/or its and their respective licensees or sublicensees, with respect to any services provided in connection with the Business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. PAYMENTS

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.1** **Compensation to the LLC.** Favo Capital shall pay and deliver to the LLC for a period of four

&nbsp;&nbsp;&nbsp;&nbsp;(4) years from the Effective Date the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(a)** an amount of $230,000 per year which will be paid out weekly;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(b)** a commission of 0.75% on all new business referred by the LLC resulting in Favo Capital Sales of $0.01 to $3,750,000 per quarter;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(c)** an additional commission of 1.25% on all new business referred by the LLC resulting in Favo Capital Sales of $3,750,000 and upward per quarter. For the avoidance of doubt, all sales in each month of a quarter shall be aggregated to determine the amount of the additional commission earned hereunder during such quarter;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(d)** a commission of 50% for all of the existing book of Business derived from the Purchase Agreement that has been renewed with Favo Capital of 50% of what remains after payment to the commissioned sales agent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(e)** With respect to the existing book of Business derived from the Purchase Agreement not funded by Favo Capital but funded by an outside party, a commission of 50% of what remains after payment to the commissioned sales agent; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(f)** a commission of 50% for all lender bonuses and other financial rewards for all of the existing book of Business derived from the Purchase Agreement; including but not limited to Professional Service Fees (PSF's).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(g)** All commissions will be paid quarterly as described in Section 2.2 below, in line with Favo Capital's Financial Reporting Requirements of the OTC Markets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.2** **Payment; Reports.** Except for Section 2.1(a) where all commissions will be paid by the second week of the following month in which the commission is generated on all amounts owed to the LLC which, shall be reconciled, calculated and reported for each calendar quarter and shall be paid within 30 days after the end of each calendar quarter. Each payment shall be accompanied by a report of all Favo Capital Sales, which report shall include a description of the method used to calculate the commissions payable, the exchange rates used, and the gross Favo Capital Sales for such calendar quarter, in each case presented on a region-by-region basis.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.3** **Arm's-Length Compensation.** The parties hereto agree that the compensation provided herein has been determined in arm's-length bargaining and is consistent with fair market value in arm's- length transactions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.4** **Exchange Rate; Manner and Place of Payment.** All payments hereunder shall be payable in U.S. dollars. When conversion of Favo Capital Sales (for purposes of calculating respective commissions) from any foreign currency is required, such conversion shall be calculated using an exchange rate equal to the weighted average of the rates of exchange for the currency of the country from which the royalties are payable as published by *The Wall Street Journal*, Eastern U.S. Edition, during the calendar quarter for which a payment is due. All payments owed under this Agreement shall be made by wire transfer in immediately available funds to the bank and account designated in writing by The LLC. All payments hereunder are non-refundable and non-creditable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.5** **Income Tax Withholding.** The LLC will pay any and all taxes levied on account of any payments made to it under this Agreement. If any taxes are paid or required to be withheld by Favo Capital for the benefit of the LLC on account of any payments due to the LLC under this Agreement, Favo Capital will (a) deduct such taxes from the amount of royalties or other payments otherwise due to the LLC, (b) timely pay the taxes to the proper taxing authority, and (c) send proof of payment to the LLC and certify its receipt by the taxing authority within 30 days following such payment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.6** **Audits and Inspection of Bank Accounts and Records.** Favo Capital shall keep (and shall cause its affiliates and sublicensees to keep) complete and accurate records pertaining to the Business in sufficient detail to permit the LLC to confirm the accuracy of all payments due hereunder for a period of three (3) years from the end of the calendar year to which such records relate. The LLC shall have the right, once annually, to cause an independent, certified public accountant reasonably acceptable to Favo Capital (the "***Auditor***") to audit such records solely to confirm Favo Capital Sales and corresponding commission payments for a period covering not more than the preceding three (3) years. Such audits may be exercised during normal business hours, reasonably scheduled for mutual accommodation between the parties, upon reasonable prior, written notice delivered to Favo Capital at least thirty (30) days in advance. The Auditor will execute a reasonable written confidentiality agreement with Favo Capital and will disclose to the LLC only such information as is reasonably necessary to provide the LLC with information regarding any actual or potential discrepancies between amounts reported and actually paid and amounts payable under this Agreement. The Auditor will send a copy of the report to Favo Capital at the same time it is sent to the LLC. The report sent to both parties will include the methodology and calculations used to determine the results. Prompt adjustments shall be made by the parties to reflect the results of such audit. The LLC shall bear the

full cost of such audit unless such audit discloses an underpayment by Favo Capital of more than 5% of the commission amounts due for any six (6)-month period under this Agreement, in which case, Favo Capital shall bear the full cost of such audit and shall promptly remit to the LLC the amount of any such underpayment. If such audit discloses an overpayment by Favo Capital, then Favo Capital will deduct the amount of such overpayment from amounts otherwise owed to the LLC under this Agreement.

Additionally, Favo Capital Agrees that at all times in which the LLC is entitled to earn compensation under this Agreement, the LLC shall have ongoing access to the following solely for the purposes of verifying the accuracy of Favo Capital's records and amounts of payments the LLC was entitled to received under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) all bank accounts relating to the LLC;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) all accounting records realting to the LLC

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) all contract lender agreements relating to the LLC

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.7** **Late Payments.** In the event that any payment due hereunder is not made when due, such payment shall accrue interest from the date due at the rate of 1.5% per month; *provided, however,* that in no event shall such rate exceed the maximum legal annual interest rate. The payment of such interest shall

not limit the LLC from exercising any other rights it may have as a consequence of the lateness of any payment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.8** **Control of Applications**. Notwithstanding anything to the contrary herein or in any other agreement among any of the Parties, it is agreed that the first six hundred (600) applications produced by Believe PMF EIRL will be for the exclusive use of the Florida sales team, for the term of this agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. PROPRIETARY RIGHTS

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.1** **Ownership.** Nothing in this Agreement will (a) serve to transfer to the LLC any patent, copyright, trademark or other intellectual property rights in or to the Business, Favo Capital Marks, or other intellectual property owned or claimed by Favo Capital or (b) constitute a license or sub-license to the LLC of any intellectual property rights owned or licensed by Favo Capital in the Business. The LLC acknowledges and agrees that Favo Capital has sole right, title and interest in and to all intellectual property rights covering, claiming or associated with the Business, the Favo Capital Marks and all goodwill associated therewith.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.2** **No Trademark License.** The LLC shall have no authorization to use the Favo Capital Marks for any purpose or reason whatsoever except as set forth in or to accomplish the purposes of this Agreement or any Ancillary Agreement, as such term is defined in the Purchase Agreement. The LLC acknowledges Favo Capital's exclusive ownership of the Favo Capital Marks and all goodwill arising from the use thereof, and the LLC agrees not to take any action inconsistent with such ownership and will cooperate, at Favo Capital's request and expense, in any action (including the conduct of legal proceedings) which Favo Capital reasonably deems necessary or desirable to establish or preserve Favo Capital's exclusive rights in and to the Favo Capital Marks and associated goodwill.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. TERM AND TERMINATION

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.1** **Term.** The term of this Agreement will commence on the Effective Date and continue for a period of four (4) years. Regardless of any termination of this Agreement, The LLC shall continue to be entitled to, and Favo Capital shall be required to pay, all compensation detailed in and as set forth in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2 Termination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(a)** **Material Breach.** Each party shall have the right to terminate this Agreement immediately upon written notice to the other party if such other party is in material breach of this Agreement and has not cured such breach within thirty (30) days (or ten (10) days with respect to any payment breach) after its receipt of a written notice from the terminating party requesting cure of the breach. Any such termination shall become effective at the end of such thirty (30)-day (or ten (10)-day with respect to any payment breach) period unless the breaching party has cured such breach prior to the end of such period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(b)** **Bankruptcy.** Each party shall have the right to terminate this Agreement upon sixty (60) days' prior written notice to the other party upon or after the filing or institution of bankruptcy, reorganization, liquidation or receivership proceedings by or against the other party, or upon an assignment of a substantial portion of the other party's assets for the benefit of creditors; *provided, however,* that, in the case of any involuntary bankruptcy proceeding, such right to terminate shall only become effective if the other party consents to the involuntary bankruptcy or such proceeding is not dismissed within ninety

&nbsp;&nbsp;&nbsp;&nbsp;(90) days after the filing thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3 Effect of Termination

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(a)** **Generally**. Upon any expiration or termination of this Agreement, all rights and obligations under this Agreement shall automatically terminate, except as provided in this Section 4.3.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(b)** **Return of Confidential Information**. Within thirty (30) days following any expiration or termination of this Agreement and at the disclosing party's request, each party shall return to the other party, at its own expense, all Confidential Information of the other party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(c)** **Accrued Obligations; Survival**. Neither expiration nor any termination of this Agreement shall relieve either party of any obligation or liability accruing prior to such expiration or termination, including any obligation to make payments hereunder, nor shall expiration or any termination of this Agreement preclude either party from pursuing all rights and remedies it may have under this Agreement, at law or in equity, with respect to breach of this Agreement. In addition, the parties' rights and obligations under Article 2, and Articles 4, 5, 6 and 7 shall survive expiration or any termination of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. CONFIDENTIAL INFORMATION.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.1** **Confidential Information.** Except to the extent expressly authorized by this Agreement or otherwise agreed in writing by the parties, the parties agree that, during the Term and continuing for ten (10) years thereafter, each party (in such capacity, the "***receiving party***") shall keep confidential and shall not publish or otherwise disclose and shall not use for any purpose other than as expressly provided for in this Agreement any Confidential Information of the other party (in such capacity, the "***disclosing party***"). The receiving party may use Confidential Information of the other party only to the extent required to accomplish the purposes of this Agreement. The receiving party will use at least the same standard of care as it uses to protect proprietary or confidential information of its own (but not less than reasonable care) to ensure that its employees, agents, consultants and other representatives do not disclose or make any unauthorized use of the Confidential Information of the disclosing party. The receiving party will promptly notify the disclosing party upon discovery of any unauthorized use or disclosure of the Confidential Information of the disclosing party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.2** **Exceptions.** Confidential Information shall not include any information which the receiving party can demonstrate by competent evidence: (a) is now, or hereafter becomes, through no act or failure to act on the part of the receiving party, generally known or available; (b) is known by the receiving party at the time of receiving such information, as evidenced by its records; (c) is hereafter furnished to the receiving party by a third party, as a matter of right and without restriction on disclosure; or (d) is independently discovered or developed by the receiving party without the use of or reference to the Confidential Information of the disclosing party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.3** **Authorized Disclosure.** The receiving party may disclose Confidential Information of the disclosing party as expressly permitted by this Agreement or if and to the extent such disclosure is reasonably necessary in the following instances:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(a)** complying with applicable court orders or governmental regulations; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(b)** disclosure to affiliates, subcontractors, employees, consultants, agents or other third parties who need to know such information in connection with performance of such party's obligations under this Agreement, and disclosure to potential third party investors or acquirers in connection with due diligence or similar investigations by such third parties or in confidential financing documents with such third parties, provided, in each case, that any such Affiliate, subcontractor, employee, consultant, agent or third party agrees to be bound by similar terms of confidentiality and non-use at least equivalent in scope to those set forth in this Article 7. In addition, the receiving party may disclose Confidential Information of the disclosing party to its attorneys and other advisors under a similar duty of confidentiality, to the extent such disclosure is reasonably necessary.

Notwithstanding the foregoing, in the event the receiving party is required to make a disclosure of the disclosing party's Confidential Information pursuant to Section 5.3(a), it will, except where impracticable, give reasonable advance notice to the disclosing party of such disclosure and use efforts to secure confidential treatment of such information at least as diligent as the receiving party would use to protect its own confidential information, but in no event less than reasonable efforts. In any event, the receiving party agrees to take all reasonable action to avoid disclosure of Confidential Information of the disclosing party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.4** **Confidentiality of this Agreement and its Terms.** Except as otherwise provided in this Article 5, each party agrees not to disclose to any third party the existence of this Agreement or the terms of this Agreement without the prior, written consent of the other party hereto, except that each party may disclose the terms of this Agreement that are not otherwise made public as contemplated by Section 5.3.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.5** **Injunctive Relief.** Any breach of the restrictions contained in this section is a breach of this Agreement that may cause irreparable harm to the disclosing party. Any such breach will entitle the receiving party to injunctive relief, in addition to all other legal or equitable remedies that may be available.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. INDEMNIFICATION

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.1** **Indemnification by Favo Capital.** Favo Capital shall indemnify, defend and hold harmless the LLC and its directors, officers, managers, owners, employees and agents from and against any and all costs, expenses, damages, judgments and liabilities including attorneys' fees incurred by or rendered against the LLC arising from any claim made or suit brought by a third party arising out of (a) a breach by Favo Capital of its representations, warranties or obligations under this Agreement, (b) Favo Capital's gross negligence or willful misconduct, or (c) any claims that the Business infringes any patent or other intellectual property rights of any third party. The LLC shall give Favo Capital prompt, written notice of any such claim or suit, and shall permit Favo Capital to undertake the defense thereof, at Favo Capital's expense. The LLC shall cooperate in such defense to the extent reasonably requested by Favo Capital, at Favo Capital's expense. In any claim made or suit brought for which the LLC seeks indemnification under this Section, the LLC shall not settle, offer to settle or admit liability or damages without the prior, written consent of Favo Capital.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.2** **Indemnification by the LLC.** The LLC shall indemnify, defend and hold harmless Favo Capital and its directors, officers, employees and agents from and against any and all costs, expenses, damages, judgments and liabilities including attorneys' fees incurred by or rendered against Favo Capital arising from any claim made or suit brought by a third party arising out of (a) a breach by the LLC of its representations, warranties or obligations under this Agreement, or (b) the LLC's gross negligence or willful misconduct. Favo Capital shall give the LLC prompt written notice of any such claim or suit, and shall permit the LLC to undertake the defense thereof, at the LLC's expense. Favo Capital shall cooperate in such defense

to the extent reasonably requested by the LLC, at the LLC's expense. In any claim made or suit brought for which Favo Capital seeks indemnification under this Section, Favo Capital shall not settle, offer to settle or admit liability or damages without the prior, written consent of the LLC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. GENERAL

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.1** **Independent Contractor.** The parties expressly acknowledge and agree that each of the LLC and all parties acting through or on behalf of the LLC have been, are and at all times will be an independent contractor in all matters relating to this Agreement. None of the aforementioned parties is an agent of Favo Capital for any purpose and none has any power or authority to bind or commit Favo Capital to any obligation in any way, nor will any of the aforementioned purport to have such power or authority. None of the aforementioned is and none will act as an employee of Favo Capital for any purpose within the meaning or application of any federal, state, or local laws or regulations that might impute any obligation or liability to Favo Capital by reason of any employment relationship.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.2** **Assignment.** Neither party may assign or transfer, by operation of law or otherwise, any of its rights, or delegate any of its obligations, under this Agreement to any third party without the other party's prior, written consent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.3** **Notices.** All notices, consents and approvals under this Agreement must be delivered in writing by courier, by electronic mail, or by certified or registered mail (postage prepaid and return receipt requested) to the other party at the address set forth beneath such party's signature, and will be effective upon receipt or five (5) business days after being deposited in the mail as required above, whichever occurs sooner. Either party may change its address by giving notice of the new address to the other party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.4** **Governing Law.** This Agreement will be governed by the laws of the State of Nevada, excluding its conflicts of laws principles.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.5** **Waivers.** All waivers must be in writing, and any waiver or failure to enforce any provision of this Agreement on one occasion will not be deemed a waiver of any other provision or of such provision on any other occasion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.6** **Severability.** If any provision of this Agreement is unenforceable, such provision will be changed and interpreted to accomplish the objectives of such provision to the greatest extent possible under applicable law and the remaining provisions will continue in full force and effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.7** **Construction.** The headings of Sections of this Agreement are for convenience and are not to be used in interpreting this Agreement. As used in this Agreement, the word "including" means "including but not limited to".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.8** **Counterparts; Execution.** This Agreement may be executed (including via electronic signature (.PDF format included)) in counterparts, each of which will be considered an original, but all of which together will constitute the same instrument.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.9** **Entire Agreement.** This Agreement constitutes the entire agreement between the parties regarding the subject hereof and supersedes all prior or contemporaneous agreements, understandings, and communication, whether written or oral. This Agreement may be amended only by a written document signed by both parties. The terms on any purchase order or similar document submitted by the LLC to Favo Capital will have no effect.

**IN WITNESS WHEREOF,** the parties have executed this **BUSINESS COMMISSION AGREEMENT** as of the Effective Date.

---

| | |
|:---|:---|
| **FAVO CAPITAL, INC.** | **ROBIN NADEAU-CAMUS** |
| By: <u>/s/ Vincent Napolitano</u> | <u>/s/ Robin Nadeau-Camus</u> |
| L. Vincent Napolitano | Individually and as manager of RobinPaws LLC |
| Chief Executive Officer |  |

---

## Exhibit 10.11

**<u>Amendment to Business Commission Agreement</u>**

This Amendment to Business Commission Agreement ("**Amendment**") is entered into this 24<sup>th</sup> day of January 2025, effective 01<sup>st</sup> day of April 2024 by and between **FAVO CAPITAL, INC.**, a Nevada corporation with its principal place of business at 1025 Old Country Road, Suite 421 Westbury, NY 11590 ("***Favo Capital***"), and **ROBINPAWS LLC**, a Florida limited liability company with a principal place of business at 4300 N. University Drive Suite D-105 Lauderhill Florida 3335 (the "**LLC**") which is solely owned by ROBIN NADEAU-CAMUS ("***Camus***").

<u>RECITALS</u>

WHEREAS Favo Capital, the LLC and Camus executed a Business Commission Agreement ("Commission Agreement") effective as of December 21, 2023; and

WHEREAS Favo Capital, the LLC and Camus have mutually agreed to the following terms which shall be incorporated into the Commission Agreement as if such Commission Agreement originally included such terms;

NOW, THEREFORE, in consideration of the foregoing and in consideration of the mutual promises set forth herein as well as other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by all parties, the parties hereto agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. **<u>Recitals</u>**. The Recitals set forth above are true and correct and are incorporated into this Amendment by this reference.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. The clause "Except as set forth in Section 2.9," shall be inserted into the first paragraph of Section 2.1 immediately before the words "Favo Capital". The resulting sentence shall read "Except as set forth in Section 2.9, Favo Capital shall pay and deliver to the LLC for a period of four (4) years from the Effective Date the following:"

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. A new Section 2.9, set forth below is hereby added to the Commission Agreement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.9 Reduction in Compensation to the LLC.** Notwithstanding anything to the contrary herein, for the term as described in the Commission Agreement, the Compensation to the LLC as set forth in Section 2.1 hereof shall be modified as set forth below and Favo Capital shall pay and deliver to the LLC:

A commission of 50% on all Renewals shall be paid if the Renewal meets one of the criteria below and if they do not meet one of the criteria below the commission will be calculated as new business on the terms set forth in Section 2.1 hereof.

<u>Renewals payable at 50%</u>:

o **Renewal - Same Lender:** This means a renewal of a merchant with the same lender used for a previous funding and that same lender paid off their existing position, so merchant only has 1 payment with specific lender.

o **Renewal - Paid Off Position:** This means a renewal of a merchant with a different lender than the one used for a previous funding and that this new lender paid off the merchant's existing position and replaced it with their new payment instead.

o **Renewal - Non-Refi LOC:** This means either: (i) the LLC secured a LOC for the merchant as a position behind any of the financial products Favo Capital offers or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the LLC renewed that client into a LOC. For example, the LLC renewed an Ondeck MCA into an OD or HC LOC.

o **Renewal - Non-Refi Equip-Fi:** This means the LLC secured the merchant Equipment financing as a position behind any of the financial products FAVO Capital offers.

o **Renewal – Collateral:** This means that the LLC renewed a merchant with a different lender than the one used for a previous funding and that this new lender did not pay off any position, but the LLC was able to fund the merchant with a Collateral program.

o **Renewal – 1 Position PIF:** This means the merchant had only 1 lender and paid that lender in full and then later acquired a new 1st position with the same or different lender.

The following shall be treated as **"New Business"** and payable at the rates set forth in Section 2.1(b) and 2.1(c) and shall be unaffected by modifications to other compensation.

o **Renewal – Stack:** This means that the LLC renewed a merchant with a different lender than the one previously used to fund such merchant and this new lender did not pay off any position, but the LLC was able to fund the merchant with another MCA program, resulting in merchant having two (2) or more payments.

o **Renewal – Reverse:** This means that the LLC renewed a merchant with a different lender than the one previously used to fund such merchant and this new lender did not pay off any position, but the LLC was able to fund the merchant with a Reverse MCA program.

o **Renewal - Add On:** This means that the LLC renewed a merchant with the same lender previously used to fund such merchant and that same lender did not pay off their existing position, and instead just gave the merchant additional capital. Now the merchant has two (2) payments with the same lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.** All other payments earned pursuant to Section 2.1(f) during the period of the amended agreement **- Shall be Reduced to Thirty Percent (30%)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. Other than as set forth in this Amendment, all other terms of the Commission Agreement remain unchanged. This amendment can be revised from time to time as deemed necessary by the Board of Directors of FAVO Capital, Inc. under agreement and approval by both parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.** This Amendment may be executed (including via electronic signature (.PDF format included)) in counterparts, each of which will be considered an original, but all of which together will constitute the same instrument

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. This Amendment shall be governed by and construed and enforced in accordance with and governed by the laws of the State of Nevada (without giving effect to any conflicts or choice of law provisions thereof that would cause the application of the domestic substantive laws of any other jurisdiction).

IN WITNESS WHEREOF, the parties have executed this Amendment to Business Commission Agreement as of the Date first set forth above.

---

| | |
|:---|:---|
| **FAVO CAPITAL, INC.** | **ROBIN NADEAU-CAMUS** |
| By: <u>/s/ Vincent Napolitano</u> | <u>/s/ Robin Nadeau-Camus</u> |
| NAME: VINCENT NAPOLITANO | INDIVIDUALLY AND AS MANAGER OF |
| TITLE: CEO | ROBINPAWS LLC |
| By: <u>/s/ Shaun Quin</u> |  |
| NAME: SHAUN QUIN |  |
| TITLE: PRESIDENT |  |
| By: <u>/s/ Glen Steward</u> |  |
| NAME: GLEN STEWARD |  |
| TITLE: CHIEF STRATEGY OFFICER |  |

---

## Exhibit 10.12

**<u>AMENDMENT TO EMPLOYMENT AGREEMENT</u>**

This Amendment to Employment Agreement ("Amendment") is made this 01<sup>st</sup> day of March, 2025, between Favo Capital, Inc., a Nevada corporation, (the "Company") and Vaughan Korte ("Employee").

WHEREAS, the Company and Employee previously entered into an Employment Agreement on August 21, 2024 (the "Employment Agreement");

WHEREAS, the Company and Employee desire to amend Section 3.01 of the Employment Agreement concerning the Employee's Base Compensation;

NOW THEREFORE, in consideration of the promises and mutual covenants set forth herein, the parties hereto hereby agree to amend the Employment Agreement as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. Section 3.01 of the Employment Agreement is deleted in its entirety and now reads as follows:

"3.01 The Company will compensate Executive for the duties performed by him hereunder by payment of a base salary at a rate of Eleven Thousand Six Hundred and One US Dollars and 60/100 Cents ($11,601.60 USD) payable bi-weekly via W2 Payroll from Favo Group Human Resources the HR Division of Favo Capital, Inc. (the "Base"), subject to customary withholding for federal, state, and local taxes and other normal and customary withholding items."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. In all other respects, the remaining terms, covenants, conditions and provisions of the Employment Agreement shall continue in full force and effect to the extent provided in the Employment Agreement.

**IN WITNESS WHEREOF,** the parties hereto have executed this Agreement as of the date first written above.

---

| | |
|:---|:---|
| **FAVO CAPITAL, INC.** | **EMPLOYEE:** |
| By: <u>/s/ Vincent Napolitano</u> | By: <u>/s/ Vaughan Korte</u> |
| By: Vincent Napolitano | Vaughan Korte |
| Its: CEO |  |

---

## Exhibit 10.13

**CONVERSION AGREEMENT**

THIS CONVERSION AGREEMENT (this "Agreement") is executed as of August 25, 2025 (the "Effective Date") by and between Favo Capital, Inc., a Nevada corporation ("FAVO") and Forfront Capital, LLC, a Delaware limited liability company (the "Shareholder").

WHEREAS, the Board of Directors of FAVO has designated a series of preferred stock, known as "Series B Preferred Stock," with the features contained in the Certificate of Designation to be filed with the State of Nevada and attached hereto as Exhibit A;

WHEREAS, the Shareholder owns thirty-seven million twenty thousand (37,020,000) shares of Series A Preferred Stock in FAVO and desires to convert ten million (10,000,000) of those shares into ten million (10,000,000) shares of Series B Preferred Stock;

WHEREAS, the Board of Directors of FAVO and the majority of shareholders have determined that this conversion is fair to FAVO and has been approved in accordance with Nevada law;

NOW THEREFORE, in exchange for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, FAVO and the Shareholder agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Conversion. As of the Effective Date, the Shareholder hereby elects to convert ten million (10,000,000) shares of Series A Preferred Stock in FAVO into ten million (10,000,000) shares of Series B Preferred Stock, and FAVO agrees to the conversion. Upon delivery by the Shareholder of the certificate(s) representing the 10,000,000 shares of Series A Preferred Stock (or an affidavit of loss if applicable) to FAVO or its transfer agent, FAVO shall issue or cause its transfer agent to issue 10,000,000 shares of Series B Preferred Stock to the Shareholder, and the converted shares of Series A Preferred Stock shall be cancelled and retired. Management of FAVO and the Shareholder shall coordinate with the transfer agent for FAVO to complete the conversion. Upon the conversion, the Shareholder hereby waives and forfeits all economic rights associated with the converted shares of Series A Preferred Stock, including but not limited to any rights to dividends, liquidation preferences, and conversion into common stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Representations, Warranties and Covenants.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. FAVO hereby makes the following representations, warranties and covenants in favor of the Shareholder:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. Authority. FAVO has full power and authority to enter into this Agreement, and this Agreement, when executed and delivered, will constitute a valid and legally binding obligation of FAVO.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. Organization and Standing. FAVO is a corporation duly organized, validly existing, and in good standing under the laws of the State of Nevada.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii. No Conflicts. The execution, delivery, and performance of this Agreement by FAVO do not violate any provision of its Articles of Incorporation, Bylaws, or any material agreement to which it is a party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iv. Issuance of Shares. The shares of Series B Preferred Stock to be issued hereunder, when issued, will be duly authorized, validly issued, fully paid, and non-assessable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. The Shareholder hereby makes the following representations, warranties and covenants in favor of FAVO:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. Title to Series A Preferred Stock. The Shareholder is the owner of record of the shares of Series A Preferred Stock to be converted hereunder and owns such shares free and clear of all liens, claims and encumbrances. The Shareholder has not transferred the Series A Preferred Stock to be converted hereunder to any other party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. Authority. The Shareholder has full power and authority to enter into this Agreement, and this Agreement, when executed and delivered, will constitute a valid and legally binding obligation of the Shareholder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii. Purchase Entirely for Own Account. The Shareholder hereby confirms that the Series B Preferred Stock is being and will be acquired for investment for Shareholder's own account, not as nominee or agent, and not with a view to the resale or distribution of any part thereof, and that neither the Shareholder nor any of its officers, members, managers or representatives with the authority, responsibility or power to make a decision with regard to the purchase or sale of the preferred stock or any portion thereof (collectively, such "Shareholder Representatives") has any present intention of selling, granting any participation in or otherwise distributing the same. The Shareholder and Shareholder Representatives are familiar with the phrase "acquired for investment and not with a view to distribution" as it relates to the Securities Act of 1933, as amended (the "Securities Act") and state securities laws and the special meaning given to such term by the Securities and Exchange Commission (the "SEC").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iv. Receipt of Information. Shareholder and Shareholder Representatives have received all the information they consider necessary or appropriate for deciding whether to acquire the Series B Preferred Stock. The Shareholder further represents that it and Shareholder Representatives have had an opportunity to ask questions and receive answers from FAVO regarding the Series B Preferred Stock and the business, properties, prospects and financial condition of FAVO and to obtain additional information necessary to verify the accuracy of any information furnished to Shareholder or Shareholder Representatives or to which Shareholder or Shareholder Representatives had access.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;v. Investment Experience. The Shareholder represents that it and Shareholder Representatives are experienced in evaluating and investing in private placement transactions of securities of companies in a similar stage of development as FAVO and acknowledges that Shareholder can bear the economic risk of Shareholder's investment and that Shareholder Representatives have such knowledge and experience in financial and business matters that they are capable of evaluating the merits and risks of the investment in the Series B Preferred Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;vi. Accredited Investor. The Shareholder is an Accredited Investor, as such term is defined in Regulation D promulgated under the Securities Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;vii. Restricted Securities. The Shareholder and each of Shareholder Representatives understands that neither the Series B Preferred Stock nor any portion thereof may be sold, transferred or otherwise disposed of without registration under the Securities Act or an

exemption therefrom, and that in the absence of an effective registration statement covering the Series B Preferred Stock or an available exemption from registration under the Securities Act, the Series B Preferred Stock must be held indefinitely.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;viii. Legends. To the extent applicable, each certificate or other document evidencing any of the Series B Preferred Stock shall be endorsed with the legends substantially in the form set forth below:

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER SUCH ACT, OR UNLESS FAVO CAPITAL, INC. (THE "COMPANY") HAS RECEIVED AN OPINION OF COUNSEL OR OTHER EVIDENCE, SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Governing Law. The validity, construction and interpretation of this Agreement shall be governed by the laws of the State of Nevada. Any dispute arising from or related to this Agreement shall be subject to the exclusive jurisdiction of the state or federal courts sitting in Clark County, Nevada. The prevailing party shall be entitled to recover the actual attorneys' fees and costs incurred in connection with that litigation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. Further Actions. The parties agree to take such further action and execute such additional documents as may be necessary to implement the terms and conditions of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. No Oral Modifications. No supplement, modification, waiver, or termination of this Agreement shall be binding unless executed in writing by the party to be bound thereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. Binding Effect. This Agreement shall be binding upon and shall inure to the benefit of the parties, their representatives, heirs, estates, parent and subsidiary entities, members, managers, shareholders, principals, affiliates, successors, officers, directors, partners, administrators, trustees, receivers, agents, employees, executors, assigns, and all other persons and entities that could in any way have legal responsibility for, or claim any rights through, any of them.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. Authority. Each of the parties represents and warrants to all the other parties that the person signing this document on its behalf is duly authorized to execute this Agreement on its behalf.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. Severability. If any term or provision of this Agreement or any application thereof shall be held invalid or unenforceable, the remainder of this Agreement and any other application of such term or provision shall not be affected thereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. Entire Agreement. This Agreement constitutes the entire agreement of the parties with respect to the subject matter hereof, and may not be changed or modified except by an agreement in writing signed by the parties hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. Interpretation. All provisions of this Agreement shall be interpreted according to their fair meaning and shall not be strictly construed against any party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. Counterparts; Facsimile Signature. This Agreement may be executed in one or more counterparts, each of which shall be an original, but all of which, taken together, shall constitute one agreement.

An original signature or copy thereof transmitted by facsimile, email (including PDF), or electronic signature service shall constitute an original signature for purposes of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. Indemnification. Each party agrees to indemnify and hold harmless the other party from any losses, claims, damages, liabilities, or expenses (including reasonable attorneys' fees) arising out of any breach of its representations, warranties, or covenants hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. Tax Matters. Each party shall be responsible for its own taxes arising from this transaction. The Shareholder represents that it has consulted its tax advisors regarding the tax consequences of this conversion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14. Survival. The representations and warranties herein shall survive the closing of the transaction for a period of one year.

Favo Capital, Inc.

<u>/s/ Vincent Napolitano</u>

By: Vincent Napolitano Its: CEO

Forfront Capital, LLC

<u>/s/ Glen Steward</u>

By: Glen Steward

Its: Authorized Representative

## Exhibit 10.14

**VOTING AGREEMENT**

THIS VOTING AGREEMENT (this "Agreement") is executed as of August 25, 2025 (the "Effective Date") by and between Favo Capital, Inc., a Nevada corporation ("FAVO" or the "Company") and Forfront Capital, LLC, a Delaware limited liability company (the "Shareholder").

WHEREAS, the Shareholder owns ten million (10,000,000) shares of Series B Preferred Stock of FAVO (the "Series B Shares"), which entitle the holder to fifty (50) votes per share on all matters submitted to a vote of the stockholders of FAVO;

WHEREAS, the Series B Shares were issued to the Shareholder pursuant to a Conversion Agreement dated August 20, 2025, in exchange for certain shares of Series A Preferred Stock;

WHEREAS, to promote the stability and effective governance of FAVO, the Shareholder desires to agree to vote the Series B Shares in accordance with the directions of the founders of FAVO, which includes Vincent Napolitano, Shaun Quin, and Glen Steward (the "Founders");

WHEREAS, this Agreement is entered into pursuant to NRS 78.365(3), providing for the voting of the Series B Shares in accordance with the provisions and procedures set forth herein; and

WHEREAS, this Agreement is intended to comply with Nevada Revised Statutes ("NRS") § 78.365 (as amended) regarding stockholder voting agreements and NRS § 78.355 regarding proxies;

NOW THEREFORE, in exchange for good and valuable consideration, including $10, the receipt and sufficiency of which are hereby acknowledged, FAVO and the Shareholder agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Voting of Shares</u>. During the Term (as defined below), the Shareholder hereby agrees to vote (or cause to be voted) all of the Series B Shares owned by the Shareholder, whether beneficially or of record, on all matters submitted to a vote or consent of the stockholders of FAVO, in such manner as may be directed from time to time by a majority of the Founders (including, for the avoidance of doubt, any directors affiliated with the Shareholder, if applicable). The Shareholder shall not vote the Series B Shares in any manner inconsistent with such directions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Irrevocable Proxy</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. To secure the Shareholder's obligations under this Agreement, the Shareholder hereby appoints the President of FAVO (or such other person as may be designated in writing by the Founders from time to time) (the "Proxy Holder"), as the Shareholder's true and lawful proxy and attorney-in-fact, with full power of substitution, to vote (or consent with respect to) the Series B Shares at any annual, special, or adjourned meeting of the stockholders of FAVO, or in any action by written consent, in accordance with the directions of the Founders as provided in Section 1 above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. This proxy is irrevocable and coupled with an interest (including the Company's interest in maintaining governance stability and aligning stockholder voting with the Founders's strategic direction) and shall be deemed to be so as long as it is in effect pursuant to NRS

§ 78.355. The Shareholder hereby revokes any and all prior proxies granted with respect to the Series B Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. The Proxy Holder may exercise this proxy at any time during the Term if the Shareholder fails or refuses to vote the Series B Shares as required under Section 1. The Shareholder shall take all necessary actions to ensure that the Series B Shares are present (in person or by proxy) for purposes of establishing a quorum at any stockholder meeting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. Upon request, the Shareholder shall execute and deliver any additional documents necessary to confirm or effectuate this proxy.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. <u>Term</u>. This Agreement shall commence on the Effective Date and continue in full force and effect until the earliest of: (i) fifteen (15) years from the Effective Date; (ii) the mutual written agreement of the parties to terminate this Agreement; (iii) the Shareholder no longer owns any Series B Shares; or (iv) the dissolution or liquidation of FAVO (the "Term"). The proxy granted hereunder shall terminate automatically upon the end of the Term. At any time within the two (2) years preceding the expiration of this Agreement, the parties may extend its duration for an additional period not exceeding fifteen (15) years by written agreement, in accordance with NRS 78.365.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. <u>Representations, Warranties and Covenants</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. FAVO hereby makes the following representations, warranties and covenants in favor of the Shareholder:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Authority</u>. FAVO has full power and authority to enter into this Agreement, and this Agreement, when executed and delivered, will constitute a valid and legally binding obligation of FAVO.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Organization and Standing</u>. FAVO is a corporation duly organized, validly existing, and in good standing under the laws of the State of Nevada.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. <u>No Conflicts</u>. The execution, delivery, and performance of this Agreement by FAVO do not violate any provision of its Articles of Incorporation, Bylaws, or any material agreement to which it is a party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. The Shareholder hereby makes the following representations, warranties and covenants in favor of FAVO:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Ownership</u>. The Shareholder is the sole beneficial and record owner of the Series B Shares, free and clear of any liens, claims, or encumbrances that would prevent the performance of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Authority</u>. The Shareholder has full power and authority to enter into this Agreement, and this Agreement, when executed and delivered, will constitute a valid and legally binding obligation of the Shareholder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. <u>No Conflicts</u>. The execution, delivery, and performance of this Agreement by the Shareholder do not violate any provision of its organizational documents or any material agreement to which it is a party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. <u>Enforceability Against Transferees</u>. Pursuant to NRS 78.365(4), this Agreement shall be enforceable against any transferee of the Series B Shares only if (a) the transferee agrees in writing

to be bound by this Agreement, or (b) the existence of this Agreement is noted conspicuously on the front or back of the stock certificate representing the Series B Shares or is contained in any written statement of information required by NRS 78.235. The Company shall cause the existence of this Agreement to be so noted on any certificate or book-entry statement for the Series B Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. <u>Specific Performance</u>. The parties acknowledge that any breach of this Agreement would cause irreparable harm for which monetary damages would be inadequate. Accordingly, the non- breaching party shall be entitled to seek injunctive relief or specific performance to enforce this Agreement, in addition to any other remedies available at law or in equity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. <u>Indemnification</u>. Each party agrees to indemnify and hold harmless the other party from any losses, claims, damages, liabilities, or expenses (including reasonable attorneys' fees) arising out of any breach of its representations, warranties, or covenants hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. <u>Governing Law</u>. The validity, construction and interpretation of this Agreement shall be governed by the laws of the State of Nevada, without regard to conflicts of law principles. Any dispute arising from or related to this Agreement shall be subject to the exclusive jurisdiction of the state or federal courts sitting in Clark County, Nevada. The prevailing party shall be entitled to recover its actual attorneys' fees and costs incurred in connection with that litigation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. <u>Further Actions</u>. The parties agree to take such further action and execute such additional documents as may be necessary to implement the terms and conditions of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. <u>No Oral Modifications</u>. No supplement, modification, waiver, or termination of this Agreement shall be binding unless executed in writing by the party to be bound thereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. <u>Binding Effect</u>. This Agreement shall be binding upon and shall inure to the benefit of the parties, their representatives, heirs, estates, parent and subsidiary entities, members, managers, shareholders, principals, affiliates, successors, officers, directors, partners, administrators, trustees, receivers, agents, employees, executors, assigns, and all other persons and entities that could in any way have legal responsibility for, or claim any rights through, any of them.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. <u>Severability</u>. If any term or provision of this Agreement or any application thereof shall be held invalid or unenforceable, the remainder of this Agreement and any other application of such term or provision shall not be affected thereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. <u>Entire Agreement</u>. This Agreement constitutes the entire agreement of the parties with respect to the subject matter hereof, and may not be changed or modified except by an agreement in writing signed by the parties hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14. <u>Interpretation</u>. All provisions of this Agreement shall be interpreted according to their fair meaning and shall not be strictly construed against any party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15. <u>Counterparts; Electronic Signature</u>. This Agreement may be executed in one or more counterparts, each of which shall be an original, but all of which, taken together, shall constitute one agreement. An original signature or copy thereof transmitted by facsimile, email (including PDF), or electronic signature service shall constitute an original signature for purposes of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16. <u>Survival</u>. The representations and warranties herein shall survive the termination of this Agreement for a period of one year.

Favo Capital, Inc.

By: <u>/s/ Vincent Napolitano</u>

Name: Vincent Napolitano Title: CEO

Forfront Capital, LLC

By: <u>/s/ Glen Steward</u>

Name: Glen Steward

Title: Authorized Representative

## Exhibit 10.15

**EMPLOYMENT AGREEMENT**

This Employment Agreement (the "Agreement") entered into September 1<sup>st</sup>, 2025 between Favo Capital, Inc., a Nevada corporation (the "Company"), and Katy Murless ("Executive").

**<u>RECITALS</u>**

The Company is in business from December 1999. The Company desires to employ Executive, and the Executive desires to accept such employment, on the terms and subject to the conditions set forth in this Agreement.

In consideration of the mutual promises set forth in this Agreement the parties hereto agree as follows:

**<u>ARTICLE I</u>**

**<u>Term of Employment</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.01 Subject to the provisions of Article V, and upon the terms and subject to the conditions set forth in this Agreement, the Company will employ Executive for the period beginning on the date first written above (the "Commencement Date") and ending on 25<sup>th</sup> August 2028 (the "Initial Term"). The Initial Term shall be automatically renewed for up to one (1) successive consecutive one (1) year periods (each, a "Renewal Term" and the Initial Term and Renewal Term are collectively referred to as the "term of employment") thereafter unless either party sends notice to the other party, not more than 90 days before the end of the then-existing term of employment, of such party's desire to terminate the Agreement at the end of the then- existing term, in which case this Agreement will terminate at the end of the then-existing term. The parties understand and acknowledge that if Executive remains employed by the Company after the end of the last Renewal Term, then such employment shall be "at-will" unless this Agreement is extended, or different terms are established, by the parties in writing.

**<u>ARTICLE II</u>**

**<u>Duties</u>**

2.01(a) During the term of employment, Executive will:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Promote the interests, within the scope of his duties, of the Company and

devote his time and efforts to the Company's business and affairs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Serve as Chief Financial Officer of the Company, reporting directly to the

Company's Board of Directors (the "Board"); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Perform the duties and services consistent with the title and function of such office, including without limitation, those as specifically set forth from time to time by the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Notwithstanding anything contained in clause 2.01(a)(i) above to the contrary, nothing contained herein or under law shall be construed as preventing Executive from (i) investing

Executive's personal time and assets in such form or manner as they see fit. The Executive may perform services and devote time to other business interests, represent other companies as a director or Shareholder, sit as a Board member of other private and public companies and participate in Syndication or Direct funding opportunities with the company through its current business activities as approved by the Board of Directors of the Company.

**<u>ARTICLE III</u>**

**<u>Base Compensation</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.01 The Company will compensate Executive for the duties performed by her hereunder by payment of a base salary at a rate of three thousand five hundred fifty-seven dollars and sixty- nine cents ($3,557.69) weekly via W2 Payroll from Favo Capital, Inc. (the "Base"), subject to customary withholding for federal, state, and local taxes and other normal and customary withholding items.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.02 <u>Bonus</u>. The Company will develop a Bonus/ Incentive based program to be rolled out from January 01<sup>st</sup>, 2026, of which the Executive will be liable to participate.

**<u>ARTICLE IV</u>**

**<u>Reimbursement and Employment Benefits</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.01 <u>Health and Other Medical</u>. Executive shall be eligible to participate in all health, medical, dental, and life insurance employee benefits as are available from time to time to other key executive employees (and their families) of the Company, including a Life Insurance Plan, Medical and Dental Insurance Plan (the "Plan"). This will cover 100% of the company benefit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.02 <u>Vacation</u>. Executive shall be entitled to three (3 weeks of vacation, to be taken in such amounts and at such times as shall be mutually convenient for Executive and the Company. Any time not taken by Executive in one year shall be forfeited and not carried forward to subsequent years. Executive shall not be entitled to be reimbursed for any unused vacation or personal time, except as may be required under law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.03 <u>Equity</u>. The parties agree that any tax issues, or payments that are due to the IRS or comparable foreign entity as a result of issuance of the equity to Executive, are the sole responsibility of Executive. Executive understands that its own obligation to consult with and take his own independent tax advice on this matter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Restricted Shares</u>. Executive will be issued an agreed number of restricted shares of common stock in the Company annually as agreed to by the Board of Directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Incentive Plan Shares</u>. In addition to the issuance of restricted shares in Section 4.03(a) above, Executive will be eligible to participate in the Company's 2025 Incentive Plan, where executive may be issued equity in the Company, as determined by and within the sole discretion of the Board of Directors of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.04 <u>Reimbursable Expenses</u>. The Company shall in accordance with its standard policies in effect from time to time reimburse Executive for all reasonable out-of-pocket expenses actually incurred by him in the conduct of the business of the Company provided that Executive submits all substantiation of such expenses to the Company on a timely basis in accordance with such standard policies, ie. Meals & Entertainment allowance, not exceeding the previous year's tax filed expenses.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.05 <u>Savings Plan</u>. Executives will be eligible to enroll and participate, and be immediately vested in, all Company savings and retirement plans, including any 401(k) plans, as are available from time to time to other key executive employees.

**<u>ARTICLE V</u>**

**<u>Termination</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.01 <u>General Provisions</u>. Except as otherwise provided in this Article V, at such time as Executive's employment is terminated by the Executive or the Company, any and all of the Company's obligations under this Agreement shall terminate, other than the Company's obligation to pay Executive, within thirty (30) days of Executive's termination of employment, the full amount of any unpaid Base and accrued but unpaid benefits, including any vacation pay, earned by Executive pursuant to this Agreement through and including the date of termination and to observe the terms and conditions of any plan or benefit arrangement which, by its terms, survives such termination of Executive's employment. The payments to be made under this Section 5.01 shall be made to Executive, or in the event of Executive's death, to such beneficiary as Executive may designate in writing to the Company for that purpose, or if Executive has not so designated, then to the spouse of Executive, or if none is surviving, then to the personal representative of the estate of Executive. Notwithstanding the foregoing, termination of employment shall not affect the obligations of Executive under Article VI hereof that, pursuant to the express provisions of this Agreement, continue in full force and effect. Upon termination of employment with the Company for any reason, Executive shall promptly deliver to the Company all Company property including without limitation all writings, records, data, memoranda, contracts, orders, sales literature, price lists, client lists, data processing materials, and other documents, whether or not obtained from the Company or any Affiliate, which pertain to or were used by Executive in connection with his employment by the Company or which pertain to any Affiliate, including, but not limited to, Confidential Information, as well as any automobiles, computers or other furniture, fixtures or equipment which were purchased by the Company for Executive or otherwise in Executive's possession or control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.02 <u>Automatic Termination</u>. This Agreement shall be automatically terminated upon the first to occur of the following (a) the expiration of this Agreement in accordance with Section 1.01 hereof, (b) the Company's termination pursuant to section 5.03, (c) the Executive's termination pursuant to section 5.04 or (d) the Executive's death.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.03 <u>By the Company</u>. This Agreement may be terminated by the Company upon written notice to the Executive upon the first to occur of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Disability</u>. Upon the Executive's Disability (as defined herein). The term "Disability" shall mean, in the sole determination of the Company's Board, whose determination shall be final and binding, the reasonable likelihood that the Executive will be unable to perform his duties and responsibilities to the Company by reason of a physical or mental disability or infirmity for either:

(i) a continuous period of four months; or (ii) 180 days during any consecutive twelve (12) month period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Cause</u>. Upon the Executive's commission of Cause (as defined herein). The term "Cause" shall mean the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Any violation by Executive of any material provision of this Agreement (including without limitation any violation of any provision of Sections 6.01, 6.02 or 6.03 hereof any and all of which are material in all respects), upon notice of same by the Company describing in detail the breach asserted and stating that it constitutes notice pursuant to this Section 5.03(b)(i), which breach, if capable of being cured, has not been cured to the Company's sole and absolute satisfaction within 30 days after such notice (except for breaches of any provisions of sections 6.01, 6.02 or 6.03 which are not subject to cure or any notice);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Embezzlement by Executive of funds or property of the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Habitual absenteeism, bad faith, fraud, refusal to perform his duties, gross negligence or willful misconduct on the part of Executive in the performance of his duties as an employee of the Company, provided that the Company has given written notice of and an opportunity of not less than 30 days to cure such breach, which notice describes in detail the breach asserted and stating that it constitutes notice pursuant to this Section 5.03(b)(iii), provided that no such notice or opportunity needs to be given if (x) in the judgment of the Company's Board of Directors, such conduct is habitual or would unnecessarily or unreasonably expose the Company to undue risk or harm or (y) one previous notice had already been given under this section or under section (i) above; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) a felonious act, conviction, or plea of nolo contendere of Executive under the laws of the United States or any state (except for any conviction or plea based on a vicarious liability theory and not the actual conduct of the Executive).

\*NOTE - If the Company terminates the Executive for any reason other than stated in this agreement from section 5.01, 5.02 and 5.03, the Company will be liable to reimburse the Executive for the balance of the term of this agreement as per Base Compensation plus benefits agreed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.04 <u>By the Executive</u>. This Agreement may be terminated by the Executive upon written notice to the Company upon the first to occur of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Change in Control</u>. Within six (6) months after a "Change in Control" (as defined herein) of the Company (unless Executive is not offered a position in the buying or succeeding owner with equal or better economic terms as this Agreement). The term "Change in Control" shall be deemed to have occurred at such time as (i) any person or entity (or person or entities which are affiliated or acting as a group or otherwise in concert) is or becomes the beneficial

owner, directly or indirectly, of securities representing 50% or more of the combined voting power for election of directors of the then outstanding securities of the Company (other than stockholders which own greater than fifty percent (50%) of the stock of the Company as of the effective date of this Agreement); (ii) the shareholders of the Company approve any merger or consolidation as a result of which its membership interests shall be changed, converted, or exchanged (other than a merger with a wholly-owned subsidiary of the Company) or any liquidation of the Company or any sale or other disposition of all or substantially all of the assets or earning power of the Company; or (iii) the shareholders of the Company approve any merger or consolidation to which the Company is a party as a result of which the persons who were members of the Company immediately before the effective date of the merger or consolidation shall have beneficial ownership of less than 50% of the combined voting power for election of directors or the equivalent of the surviving corporation following the effective date of such merger or consolidation; provided, however, that no Change in Control shall be deemed to have occurred as a result of the sale or transfer of membership interests of the Company to an employee benefit plan sponsored by the Company or an affiliate thereof or if the new employer offers to employ the Executive on substantially the same terms and conditions as set forth in this Agreement (except that the Base shall not be reduced below the then-existing Base).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Constructive Termination</u>. Upon the occurrence of a "Constructive Termination" (as defined herein) by the Company. The term "Constructive Termination" shall mean any of the following: any breach by the Company of any material provision of this Agreement, including, without limitation, the assignment to the Executive of duties inconsistent with his position specified in Section 2.01 hereof or any breach by the Company of such Section, which is not cured within 60 days after written notice of same by Executive, describing in detail the breach asserted and stating that it constitutes notice pursuant to this Section 5.04.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Voluntary Termination</u>. Executive's resignation for reasons other than as specified in

Section 5.04(a) and (b).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.05 <u>Consequences of Termination</u>. Upon any termination of Executive's employment with the Company, except for a termination by the Company for Cause as provided in Section 5.03(b) hereof or for a termination by the Executive pursuant to Section 5.04(c) hereof, the Executive shall be entitled to (a) a payment equal to the length of the remaining term hereof worth of the then-existing Base (the "Severance") and (b) retain the benefits set forth in Article IV for the lesser of the length of the remaining term hereof. The Severance shall be paid, at Company's option, either (x) in a lump sum upon termination with such payments discounted by the U.S. Treasury rate most closely comparable to the applicable time period left in the Agreement or (y) as and when normal payroll payments are made. Executive expressly acknowledges and agrees that the payment of Severance to Executive hereunder shall be liquidated damages for and in full satisfaction of any and all claims Executive may have relating to or arising out of Executive's employment or termination of Executive's employment by the Company or relating to or arising out of this Agreement and the termination thereof, including, without limitation, those causes of action arising under the Age Discrimination in Employment Act of 1967, as amended, 29 U.S.C. §621 *et seq.,* Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. §2000e *et seq.,* the Americans with Disabilities Act of 1990, as amended, 42 U.S.C. §12101 *et seq.*, the Fair Labor Standards Act of 1938, as amended, 29 U.S.C. §201 *et seq.,* the Civil Rights Act of April 9, 1866.1

42 U.S.C. §1981 *et seq.,* the National Labor Management Relations Act, 29 U.S.C. §141 *et seq.,* the Occupational Safety and Health Act, 29 U.S.C. §651 *et seq.,* and the Family Medical Leave Act of 1993, 29 U.S.C. §2601 *et seq.* Notwithstanding the foregoing, Executive's right to receive Severance Pay is contingent upon Executive not violating any of his on-going obligations under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.06 <u>Representations</u>. Executive represents, warrants, and covenants to Company that (a) there is no other agreement or relationship which is binding on him which prevents him from entering into or performing under the terms hereof and (b) the Company may contact any past, present, or future entity with whom he has a business relationship and inform such entity of the existence of this Agreement and the terms and conditions set forth herein.

**<u>ARTICLE VI</u>**

**<u>Covenants</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.01 <u>Solicitation</u>. (a) During the period in which Executive performs services for the Company and for a period of three (3) months after termination of Executive's employment with the Company, regardless of the reason, Executive hereby covenants and agrees that he shall not, directly or indirectly, except in connection with his duties hereunder or otherwise for the sole account and benefit of the Company, whether as a sole proprietor, partner, member, shareholder, employee, director, officer, guarantor, consultant, independent contractor, or in any other capacity as principal or agent, or through any person, subsidiary, affiliate, or employee acting as nominee or agent, except with the consent of the Company:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Solicit, attempt to solicit, or accept business from, or cause to be solicited or have business accepted from, any then-current customers of Company, any persons or entities who were customers of the Company within the three (3) months preceding the Termination Date, or any prospective customers of the Company for whom bids were being prepared or had been submitted as of the Termination Date; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Induce, or attempt to induce, hire or attempt to hire, or cause to be induced or hired, any employee of the Company, or persons who were employees of the Company within the three (3) months preceding the Termination Date, to leave or terminate his or her employment with the Company, or hire or engage as an independent contractor any such employee of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Notwithstanding the foregoing, Executive shall not be prevented from (i) investing in or owning up to sixty five percent (65%) of the outstanding stock of any corporation engaged in any business provided that such shares are regularly traded on a national securities exchange or in any over-the-counter market or (ii) retaining any shares of stock in any corporation which Executive owned before the date of his employment with the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.02 <u>Confidential Information</u>. Executive acknowledges that in his employment he is or will be making use of, acquiring, or adding to the Company's confidential information which includes, but is not limited to, memoranda and other materials or records of a proprietary nature; technical information regarding the operations of the Company; and records and policy matters relating to finance, personnel, market research, strategic planning, current and potential customers,

lease arrangements, service contracts, management, and operations. Therefore, to protect the Company's confidential information and to protect other employees who depend on the Company for regular employment, Executive agrees that he will not in any way use any of said confidential information except in connection with his employment by the Company, and except in connection with the business of the Company he will not copy, reproduce, or take with him the original or any copies of said confidential information and will not directly or indirectly divulge any of said confidential information to anyone without the prior written consent of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.03 <u>Inventions</u>. All discoveries, designs, and inventions, whether patentable or not, relating to (or suggested by or resulting from) products, services of the Company or any Affiliate or relating to (or suggested by or resulting from) methods or processes used or usable in connection with the business of the Company or any Affiliate that may be conceived, developed, or made by Executive during employment with the Company (hereinafter "Inventions"), either solely or jointly with others, shall automatically become the sole property of the Company or an Affiliate. Executive shall immediately disclose to the Company all such Inventions and shall, without additional compensation, execute all assignments and other documents deemed necessary to perfect the property rights of the Company or any Affiliate therein. These obligations shall continue beyond the termination of Executive's employment with respect to Inventions conceived, developed, or made by Executive during employment with the Company. The provisions of this Section 6 shall not apply to any Invention for which no equipment, supplies, facility, or trade secret information of the Company or any Affiliate is used by Executive and which is developed entirely on Executive's own time, unless (a) such Invention relates (i) to the actual or demonstrably anticipated research or development of the Company or an Affiliate, or (b) such Invention results from work performed by Executive for the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.04 <u>non-Disparagement</u>. For a period commencing on the date hereof and continuing indefinitely, Executive hereby covenants and agrees that he shall not, directly or indirectly, defame, disparage, create false impressions, or otherwise put in a false or bad light the Company, its products or services, its business, reputation, practices, past or present employees or otherwise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.05 <u>Blue Penciling</u>. If at the time of enforcement of any provision of this Agreement, a court shall hold that the duration, scope, or area restriction of any provision hereof is unreasonable under circumstances now or then existing, the parties hereto agree that the maximum duration, scope or area reasonable under the circumstances shall be substituted by the court for the stated duration, scope, or area.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.06 <u>Remedies</u>. Executive acknowledges that any breach by him of the provisions of this Article VI of this Agreement shall cause irreparable harm to the Company and that a remedy at law for any breach or attempted breach of Article VI of this Agreement will be inadequate, and agrees that the Company shall be entitled to exercise all remedies available to it, including specific performance and injunctive and other equitable relief, without the necessity of posting any bond, in the case of any such breach or attempted breach.

**<u>ARTICLE VII</u>**

**<u>Assignment</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.01 This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the Company and shall relieve the Company of its obligations hereunder if the assignment is pursuant to a Change in Control. Neither this Agreement nor any rights hereunder shall be assignable by Executive and any such purported assignment by him shall be void.

**<u>ARTICLE VIII</u>**

**<u>Entire Agreement</u>**

This Agreement constitutes the entire understanding between the Company and Executive concerning his employment by the Company or subsidiaries and supersedes any and all previous agreements between Executive and the Company or any of its affiliates or subsidiaries concerning such employment, and/or any compensation, bonuses or incentives. Each party hereto shall pay its own costs and expenses (including legal fees) except as otherwise expressly provided herein incurred in connection with the preparation, negotiation, and execution of this Agreement. This Agreement may not be changed orally, but only in a written instrument signed by both parties hereto.

**<u>ARTICLE IX</u>**

**<u>Applicable Law; Miscellaneous</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.01 <u>Governing Law</u>. This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada. All actions brought to interpret or enforce this Agreement shall be brought in federal or state courts located in Nevada.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.02 <u>Attorneys' Fees</u>. In addition to all other rights and benefits under this Agreement, each party agrees to reimburse the other for, and indemnify and hold harmless such party against, all costs and expenses (including attorney's fees) incurred by such party (whether or not during the term of this Agreement or otherwise), if and to the extent that such party prevails on or is otherwise successful on the merits with respect to any action, claim or dispute relating in any manner to this Agreement or to any termination of this Agreement or in seeking to obtain or enforce any right or benefit provided by or claimed under this Agreement, taking into account the relative fault of each of the parties and any other relevant considerations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.03 <u>Indemnification of Executive</u>. The Company shall indemnify and hold harmless Executive to the full extent authorized or permitted by law with respect to any claim, liability, action, or proceeding instituted or threatened against or incurred by Executive or his legal representatives and arising in connection with Executive's conduct or position at any time as a director, officer, employee, or agent of the Company or any subsidiary thereof. The Company shall not change, modify, alter, or in any way limit the existing indemnification and reimbursement provisions relating to and for the benefit of its directors and officers without the prior written consent of the Executive, including any modification or limitation of any directors and officers' liability insurance policy.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.04 <u>Waiver</u>. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a continuing waiver or a waiver of any similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party hereto which are not set forth expressly in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.05 <u>Unenforceability</u>. The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.06 <u>Counterparts</u>. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original and all of which together shall constitute one and the same instrument.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.07 <u>Section Headings</u>. The section headings contained in this Agreement are inserted for reference purposes only and shall not affect the meaning or interpretation of this Agreement.

**IN WITNESS WHEREOF**, the parties have executed this Agreement as of the date first written above.

**FAVO CAPITAL, INC.**

By: <u>/s/ Vincent Napolitano</u>

Name: Vincent Napolitano

Its: CHIEF EXECUTIVE OFFICER

**EXECUTIVE**

 <u>/s/ Katy Murless</u> 

Katy Murless

**PRESIDENT**

<u>/s/ Shaun Quin</u>

Shaun Quin

**CHIEF STRAGEY OFFICER** 

<u>/s/ Glen Steward</u>

Glen Steward

## Exhibit 10.16

**LOAN AGREEMENT**

THIS LOAN AGREEMENT (this "Agreement") is made and entered into as of September [\*], 2025 (the "Effective Date"), by and between FAVO CAPITAL, INC., a Nevada corporation with its principal office at 4300 N. University Drive, Suite D-105, Lauderhill, Florida 33351 (the "Borrower" or "Issuer"), and STEWARDS INTERNATIONAL FUNDS PCC (on behalf of the STEWARDS PRIVATE CREDIT FUND), a limited company organized under the laws of Mauritius, acting for itself and on behalf of its clients or nominated third parties, with its principal office at 12th Floor, Nexteracom Tower, Tower 1, Ebene, Quatre Bornes, Mauritius 72201 (the "Lender" or "Noteholder").

**RECITALS**

WHEREAS, the Borrower is a diversified financial services company engaged in private credit and real estate operations, and seeks to issue up to $50,000,000 in aggregate principal amount of unsecured, unsubordinated debt notes (the "Notes") to the Lender, pursuant to the terms set forth in the Term Sheet dated September 9, 2025 (the "Term Sheet"), attached as Exhibit A, for the purpose of refinancing existing debt and funding the Company's general operational needs;

WHEREAS, the Lender agrees to purchase the Notes and receive warrants to purchase common stock of the Borrower, as described in the Term Sheet and a separate Warrant Agreement; and

WHEREAS, the Borrower and Lender intend to formalize their agreement regarding the issuance, repayment, and terms of the Notes under this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, the parties agree as follows:

**ARTICLE 1:**

**DEFINITIONS**

1.1 Definitions. As used in this Agreement, the following terms have the meanings set forth below:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ "Actual Principal Amount": The aggregate principal amount of Notes actually advanced by the Lender to the Borrower on or before the Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ "Business Day": Any day other than a Saturday, Sunday, or day on which banks in Las Vegas, Nevada, are required or permitted to be closed.

* "Closing Date": August 31, 2026, or such
earlier date as agreed by the parties.

* "Dealing Date": The first Business Day
of each calendar month between the Opening Date and the Closing Date.

* "Liquidity Event": (i) Any change of
control of the Borrower, as defined in the Warrant Agreement, or (ii) a sale of more than 75% of the Borrower's assets after the
Closing Date, expressly excluding any initial public offering of the Borrower's common stock.

* "Maturity Date": August 31, 2030, unless
extended pursuant to Section 4.3.

* "Notes": Unsecured, unsubordinated debt
obligations of the Borrower, each with a face value of $100,000, issued pursuant to this Agreement.

* "Opening Date": September 1, 2025.

* "Principal Amount": Up to $50,000,000
in aggregate principal of the Notes, subject to the Actual Principal Amount advanced.

* "Warrant Agreement": The agreement governing
the issuance and terms of warrants, to be dated September 30, 2026, between the Borrower and Lender.

* "Warrants": Rights to purchase common
stock of the Borrower at $0.76 per share, issued at a rate of one (1) Warrant per $0.76 of Actual Principal Amount, as described in the
Term Sheet and Warrant Agreement.

1.2 Other Terms. Capitalized terms not defined herein shall have the meanings set forth in the Term Sheet or Warrant Agreement, as applicable.

**ARTICLE 2:**

**THE LOAN**

2.1 Commitment. Subject to the terms and conditions herein, the Lender agrees to purchase, and the Borrower agrees to issue, up to 500 Notes with an aggregate Principal Amount of up to $50,000,000, in one or more closings on Dealing Dates between the Opening Date and the Closing Date. The proceeds will support the Borrower's private credit and real estate operations, including refinancing high-cost debt and funding the Company's general operational needs including but not limited to working capital, payroll, and other ordinary course business expenses.

2.2 Disbursement. The Lender shall advance the Actual Principal Amount in increments of $100,000 (each corresponding to one Note) by wire transfer to an account designated by the Borrower on each Dealing Date. There is no guarantee that the full Principal Amount will be advanced, and the Actual Principal Amount shall be the amount actually funded.

2.3 Promissory Notes. Each Note shall be evidenced by a promissory note in the form attached as Exhibit B, issued to the Lender or its nominees, bearing the terms herein and in the Term Sheet. The Notes are obligations of the Borrower, not its subsidiaries, but the Borrower's consolidated operations secure repayment through overall financial performance.

2.4 Warrants. In consideration of the Actual Principal Amount advanced, the Borrower shall issue Warrants to the Lender within one (1) calendar month of the Closing Date, at a rate of one (1) Warrant per $0.76 of Actual Principal Amount, pursuant to the Warrant Agreement. Warrants are exercisable only after the Maturity Date or a Liquidity Event.

**ARTICLE 3:**

**INTEREST AND PAYMENTS**

3.1 Interest Rate. The Notes shall bear interest at a fixed rate of 8.00% per annum on the Actual Principal Amount, calculated on a 365-day year basis.

3.2 First Interest Payment.

* The first interest payment shall be due on September
1, 2026, or the first Business Day thereafter.

* The amount shall be calculated as the pro-rated interest
accrued on the Actual Principal Amount from the date of each advance to the Closing Date.

3.3 Subsequent Interest Payments.

* After the First Interest Payment Date, interest shall
be payable quarterly on the first Business Day of each calendar quarter, commencing October 1, 2026 (or the first Business Day thereafter).

* Interest shall be calculated as (8.00% × Actual
Principal Amount × days in period / 365).

3.4 Payment Mechanics. All payments shall be made in U.S. dollars by wire transfer to an account designated by the Lender, free of any set-off, counterclaim, or withholding, except as required by law. Payments shall be applied first to accrued interest, then to principal.

**ARTICLE 4:**

**PREPAYMENT AND REDEMPTION**

4.1 Maturity Redemption. On the Maturity Date, the Borrower shall redeem the Notes at an amount equal to the Actual Principal Amount, plus any accrued and unpaid interest.

4.2 Early Redemption.

* By Lender Request: The Lender may request early redemption
of up to 50% of the Actual Principal Amount by providing sixty (60) Business Days' written notice to the Borrower, provided such
request is made no earlier than two (2) years after the Closing Date and no later than twenty (20) Business Days before the Maturity Date.

* Upon Event of Default: Upon an Event of Default (as
defined in Article 8), the Borrower shall redeem the Notes at the Actual Principal Amount, plus accrued interest, subject to the terms
herein.

4.3 Extension of Maturity.

* The Borrower may request an extension of the Maturity
Date, not to exceed six (6) calendar months, by providing twenty (20) Business Days' written notice to the Lender, subject to the
collective approval of the Noteholder(s).

* No extension shall be permitted if (i) an Event of
Default has occurred and is continuing, or (ii) the request is made less than twenty (20) Business Days before the Maturity Date.

* During the extension period, interest shall accrue
at 8.00% per annum pro rata, and the Borrower shall pay an additional 1% of the Actual Principal Amount per month in advance upon issuing
the extension request.

* Upon the extended Maturity Date, the Actual Principal
Amount and all accrued interest shall be payable.

**ARTICLE 5:** 

**USE OF PROCEEDS AND COVENANTS**

5.1 Use of Proceeds. The Borrower shall use the proceeds from the issuance of the Notes solely for refinancing existing debt and funding the Company's general operational needs including but not limited to working capital, payroll, and other ordinary course business expenses.

5.2 Affirmative Covenants. The Borrower shall:

* Provide the Lender with (i) quarterly financial statements
(P&L, balance sheet, cash flow) within 45 days of quarter-end, (ii) annual audited accounts within 90 days of year-end, and (iii)
prompt notice of any material litigation, default, or adverse events.

* Maintain its legal existence and good standing under
Nevada law.

* Comply with all applicable laws and regulations,
including those related to its private credit and real estate subsidiaries.

5.3 Negative Covenants. Without the prior written consent of the Lender, the Borrower shall not:

* Incur or issue any debt senior to or pari passu with
the Notes.

* Grant any new security interests over its assets.

* Issue any preference shares.

5.4 Ranking. The Notes are unsecured and unsubordinated obligations of the Borrower, ranking:

* After claims of (i) secured creditors and (ii) creditors
preferred by law (e.g., IRS for unpaid taxes).

* Equally with other unsecured, unsubordinated creditors.

* Prior to subordinated creditors and shareholders.

**ARTICLE 6:** 

**REPRESENTATIONS AND WARRANTIES**

6.1 Borrower Representations. The Borrower represents and warrants as of the Effective Date and each Dealing Date:

* It is a corporation duly organized and validly existing
under Nevada law, with principal executive offices at 4300 N. University Drive, Suite D-105, Lauderhill, Florida 33351.

* It has full power and authority to enter into and
perform this Agreement, the Notes, and the Warrant Agreement.

* This Agreement and the Notes are valid and binding
obligations, enforceable in accordance with their terms, subject to bankruptcy and similar laws.

6.2 Lender Representations. The Lender represents and warrants:

* It is an accredited investor under Rule 501(a) of
Regulation D.

* It is acquiring the Notes and Warrants for its own
account or for clients/nominees, with investment intent and not for distribution.

**ARTICLE 7:** 

**CONDITIONS PRECEDENT**

7.1 Conditions to Funding. The Lender's obligation to advance funds on each Dealing Date is subject to:

* Execution and delivery of this Agreement, and the
Warrant Agreement.

* No Event of Default or material breach of this Agreement.

**ARTICLE 8:** 

**EVENTS OF DEFAULT AND REMEDIES**

8.1 Events of Default. Each of the following constitutes an "Event of Default":

* Failure to pay principal or interest when due, continuing
for fourteen (14) Business Days after written notice from the Lender.

* Breach of any covenant under Article 5, continuing
for 30 days after written notice.

* Insolvency, bankruptcy, or similar proceedings involving
the Borrower or subsidiaries.

* Material litigation or adverse event materially impairing
the Borrower's ability to perform.

* Change in control without Lender consent.

8.2 Remedies. Upon an Event of Default, the Lender may, by written notice:

* Declare the Actual Principal Amount and accrued interest
immediately due and payable.

* Pursue early redemption.

* Exercise other rights under applicable law.

**ARTICLE 9:** 

**TRANSFERS**

9.1 Transfer Restrictions. The Notes and Warrants are restricted securities under the Securities Act and may not be transferred except to eligible investors through STEWARDS INTERNATIONAL FUNDS PCC (on behalf of the STEWARDS PRIVATE CREDIT FUND), with prior written consent of the Borrower, which shall not be unreasonably withheld.

9.2 Transfer Procedure. The Lender shall request transfers in writing, specifying the transferee and compliance with securities laws. The Borrower shall issue new Notes/Warrants to the transferee upon approval.

**ARTICLE 10:** 

**MISCELLANEOUS**

10.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to conflict of law principles.

10.2 Entire Agreement. The Term Sheet, this Agreement, and the Warrant Agreement constitute the entire agreement between the parties, superseding all prior agreements.

10.3 Amendments. Any amendment must be in writing and signed by both parties.

10.4 Notices. All notices shall be in writing, delivered to the addresses specified above.

10.5 Severability. If any provision is found invalid, the remaining provisions shall remain in effect.

10.6 Assignment. The Lender may assign its rights with Borrower consent, except as permitted under Section 9.1. The Borrower may not assign without Lender consent.

10.7 Counterparts. This Agreement may be executed in counterparts, each deemed an original, including electronic signatures.

IN WITNESS WHEREOF, the undersigned have executed this Loan Agreement as of the Effective Date.

**BORROWER:**

FAVO CAPITAL, INC.

By: <u>/s/ Shaun Quin</u><br> Name: Shaun Quin<br> Title: President

**LENDER:**

STEWARDS INTERNATIONAL FUNDS PCC (on behalf of the STEWARDS PRIVATE CREDIT FUND)

By: <u>/s/ Kowen Pareemamun</u><br> Name: Kowen Pareemamun

Title: Director

## Exhibit 10.17

**WARRANT AGREEMENT**

THIS WARRANT AGREEMENT (this "Agreement") is made and entered into as of September 30, 2026 (the "Effective Date"), by and between FAVO CAPITAL, INC., a Nevada corporation with its principal office at 4300 N. University Drive, Suite D-105, Lauderhill, Florida 33351 (the "Company"), and STEWARDS INTERNATIONAL FUNDS PCC (on behalf of the STEWARDS PRIVATE CREDIT FUND), a limited company organized under the laws of Mauritius, with its principal office at 12th Floor, Nexteracom Tower, Tower 1, Ebene, Quatre Bornes, Mauritius 72201 (the "Holder").

**RECITALS**

WHEREAS, the Company is a diversified financial services company engaged in private credit and real estate operations, with plans to issue up to $50,000,000 in aggregate principal amount of unsecured, unsubordinated debt notes (the "Notes") to the Holder pursuant to the Loan Agreement dated September [\*], 2025 (the "Loan Agreement");

WHEREAS, in connection with the Holder's purchase of the Notes, the Company agreed to issue warrants (the "Warrants") to purchase shares of the Company's common stock, par value $0.0001 per share (the "Warrant Shares"), at an exercise price of $0.76 per share, at a rate of one (1) Warrant per $0.76 of Actual Principal Amount advanced, as described in the Term Sheet dated September 9, 2025 (the "Term Sheet"), attached as Exhibit A to the Loan Agreement;

WHEREAS, the Warrants shall become exercisable following the later of (i) the Maturity Date of the Notes or (ii) a Liquidity Event, and shall remain exercisable for three (3) years thereafter, until August 31, 2033, as specified in the Term Sheet;

WHEREAS, the Holder has the option to use the Actual Principal Amount of the Notes, in whole or in part, as payment for the exercise of the Warrants, including anti-dilution protections and exemptions as specified in the Term Sheet;

WHEREAS, the Company and the Holder desire to set forth the terms and conditions governing the issuance, exercise, and transfer of the Warrants; and

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, the parties agree as follows:

**ARTICLE 1:** 

**DEFINITIONS**

1.1 Definitions. As used in this Agreement, the following terms have the meanings set forth below:

"Actual Principal Amount": The aggregate principal amount of Notes actually advanced by the Holder to the Company on or before the Closing Date, as defined in the Loan Agreement.

"Business Day": Any day other than a Saturday, Sunday, or day on which banks in Las Vegas, Nevada, are required or permitted to be closed.

"Closing Date": August 31, 2026, or such earlier date as agreed by the parties under the Loan Agreement.

"Debt Conversion Option": The Holder's option to use the Actual Principal Amount of the Notes, in whole or in part, as payment for the exercise of the Warrants, as described in Section 3.3 and the Term Sheet.

"Exercise Price": $0.76 per share of Common Stock, subject to adjustment as provided in Article 4.

"Expiration Date": The date that is three (3) years after the Maturity Date of the Notes, or August 31, 2033, unless extended or terminated earlier pursuant to this Agreement.

"Issuance Date": The date within one (1) calendar month of the Closing Date on which the Warrants are issued to the Holder, expected to be no later than September 30, 2026.

"Liquidity Event": (i) A change of control of the Company, meaning a transaction where any person or group acquires more than 50% of the voting power of the Company's outstanding voting securities, or (ii) a sale of more than 75% of the Company's assets.

"Warrants": Rights to purchase shares of Common Stock at the Exercise Price, issued at a rate of one (1) Warrant per $0.76 of Actual Principal Amount, as described in the Loan Agreement and Term Sheet.

**1.2 Other Terms**. Capitalized terms not defined herein shall have the meanings set forth in the Loan Agreement or Term Sheet, as applicable.

**ARTICLE 2:** 

**ISSUANCE OF WARRANTS**

**2.1 Issuance**. In consideration of the Actual Principal Amount advanced by the Holder under the Loan Agreement, the Company shall issue to the Holder or its nominees, on the Issuance Date, Warrants to purchase a number of shares of Common Stock equal to the Actual Principal Amount divided by $0.76, rounded down to the nearest whole share.

**2.2 Warrant Certificate**. The Warrants shall be evidenced by a warrant certificate in the form attached as Exhibit A, delivered to the Holder on the Issuance Date, specifying the number of shares, Exercise Price, and Expiration Date.

**2.3 No Fractional Warrants**. No fractional Warrants shall be issued. If the calculation of Warrants results in a fractional share, the number of Warrants shall be rounded down to the nearest whole number.

**ARTICLE 3:** 

**EXERCISE OF WARRANTS**

**3.1 Exercise Period**. The Warrants may be exercised, in whole or in part, at any time after the later of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The Maturity Date of the Notes (as may be extended per Section 4.3 of the Loan Agreement), or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Immediately after the occurrence of a Liquidity Event and shall remain exercisable for a period of three (3) years thereafter, until the Expiration Date.

**3.2 Exercise Procedure**. To exercise the Warrants, the Holder shall:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Deliver a written notice of exercise in the form attached to the warrant certificate, specifying the number of Warrant Shares to be purchased.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Pay the aggregate Exercise Price (number of Warrant Shares × $0.76, subject to adjustment) by wire transfer to an account designated by the Company, via cashless exercise pursuant to Section 3.4, or via the Debt Conversion Option pursuant to Section 3.3

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Surrender the warrant certificate to the Company or its transfer agent.

**3.3 Debt Conversion Option.** The Holder may, at its option, use the Actual Principal Amount of the Notes, in whole or in part, as payment for the aggregate Exercise Price of the Warrants, even in the case of a Liquidity Event. The number of Warrant Shares issued upon exercise via the Debt Conversion Option shall be calculated as:

* (Actual Principal Amount applied ÷ $0.76),
rounded down to the nearest whole share.

* The applied Actual Principal Amount shall reduce
the outstanding principal of the Notes accordingly, and any accrued but unpaid interest on the applied amount shall be paid in cash or
added to the principal, as per the Loan Agreement.

* The Holder shall specify in the notice of exercise
the portion of the Actual Principal Amount to be applied.

**3.4 Cashless Exercise**. If approved by the Company, the Holder may elect a cashless exercise, whereby the number of Warrant Shares issued shall be reduced by the number of shares with a fair market value (based on the average closing price of the Common Stock on the OTC Markets or any national exchange for the 10 trading days preceding the exercise date) equal to the aggregate Exercise Price.

**3.5 Issuance of Warrant Shares**. Upon exercise, the Company shall issue the Warrant Shares to the Holder within five (5) Business Days, registered in the name of the Holder or its nominee, bearing a restrictive legend as required by the Securities Act.

**ARTICLE 4:** 

**ADJUSTMENTS**

**4.1 Stock Splits and Dividends**. If the Company effects a stock split, reverse stock split, or stock dividend on the Common Stock, the number of Warrant Shares and the Exercise Price shall be proportionately adjusted to reflect such event.

**4.2 Anti-Dilution for Non-Exempt Issuances**. If, at any time after the Issuance Date and prior to the Expiration Date, the Company issues or sells (or is deemed to issue or sell pursuant to Section 4.4) any shares of Common Stock (or securities convertible into or exercisable for Common Stock) at a price per share (the "New Issuance Price") that is lower than the then-current Exercise Price (the "Dilutive Issuance"), and such issuance is not exempt under Section 4.3, the Exercise Price shall be automatically adjusted to the New Issuance Price, and the number of Warrant Shares shall be increased to the number determined by multiplying the then-current number of Warrant Shares by a fraction, (x) the numerator of which shall be the sum of (A) the number of shares of Common Stock outstanding immediately prior to the Dilutive Issuance plus (B) the number of shares of Common Stock so issued or deemed issued in the Dilutive Issuance, and (y) the denominator of which shall be the sum of (A) the number of shares of Common Stock outstanding immediately prior to the Dilutive Issuance plus (B) the number of shares of Common Stock which the aggregate consideration received (or deemed received) by the Company for the Dilutive Issuance would purchase at the New Issuance Price. Such adjustment shall be made successively whenever such a Dilutive Issuance occurs.

**4.3 Exemptions from Anti-Dilution**. No adjustment to the Exercise Price or number of Warrant Shares shall be made under Section 4.2 for the following exempt issuances, as specified in the Term Sheet:

* Issuance of shares under approved employee incentive
plans, capped at 5% of the Company's fully diluted capital.

* Issuance of shares upon conversion or exercise of
outstanding securities.

* Issuance of shares in connection with a bona fide
public offering.

**4.4 Deemed Issuances**. For purposes of Section 4.2, the following shall be deemed issuances of Common Stock:

* The issuance of any security convertible into or
exercisable for Common Stock at a price below the then-current Exercise Price.

* The issuance of options, warrants, or rights to acquire
Common Stock at a price below the then-current Exercise Price.

* The issuance of Common Stock in payment of dividends
or interest on securities convertible into Common Stock.

**4.5 Reorganizations**. In the event of a merger, consolidation, or reorganization (other than a Liquidity Event), the Holder shall be entitled to receive, upon exercise, the kind and amount of securities or property that the Holder would have received had the Warrants been exercised immediately prior to such event.

**4.6 Notice of Adjustments**. The Company shall notify the Holder in writing of any adjustment within ten (10) Business Days, specifying the new number of Warrant Shares and Exercise Price.

**ARTICLE 5:** 

**TRANSFER RESTRICTIONS**

**5.1 Restricted Securities**. The Warrants and Warrant Shares are restricted securities under the Securities Act and may not be sold, transferred, or assigned except in compliance with the Securities Act.

**5.2 Transfer Procedure**. To transfer the Warrants, the Holder shall:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Provide written notice to the Company, specifying the transferee and evidence of compliance with securities laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Surrender the warrant certificate to the Company or its transfer agent.

The Company shall issue a new warrant certificate to the transferee within five (5) Business Days of approval.

**5.3 Legends**. The warrant certificate and any certificates for Warrant Shares shall bear the following legend:

"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED."

**ARTICLE 6:**

**REPRESENTATIONS AND WARRANTIES**

**6.1 Company Representations**. The Company represents and warrants, as of the Effective Date and Issuance Date:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ It is a corporation duly organized, validly existing, and in good standing under Nevada law, with principal executive offices at 4300 N. University Drive, Suite D-105, Lauderhill, Florida 33351.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ It has full power and authority to execute this Agreement and issue the Warrants, which are valid and binding obligations, enforceable subject to bankruptcy and similar laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The issuance of the Warrants does not conflict with the Company's Articles of Incorporation, Bylaws, or existing agreements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The Warrant Shares, when issued upon exercise, will be duly authorized, validly issued, fully paid, and non-assessable.

**6.2 Holder Representations**. The Holder represents and warrants:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ It is an accredited investor under Rule 501(a) of Regulation D with sufficient knowledge to evaluate the investment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ It is acquiring the Warrants for investment purposes, not for distribution, and understands their illiquidity and restrictions on transfer.

**ARTICLE 7:** 

**COVENANTS**

**7.1 Reservation of Shares**. The Company shall reserve sufficient shares of Common Stock for issuance upon exercise of the Warrants.

**7.2 Information Rights**. The Company shall provide the Holder with quarterly and annual financial statements and notice of material events, as required by the Loan Agreement.

**ARTICLE 8:** 

**TERMINATION**

**8.1 Termination Events**. This Agreement shall terminate:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Upon the Expiration Date, if the Warrants remain unexercised.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Upon mutual written consent of the Company and the Holder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ If the Notes are not issued by the Closing Date (August 31, 2026), and no Actual Principal Amount is advanced.

**8.2 Effect of Termination**. Upon termination, unexercised Warrants shall be void, and the Holder shall have no further rights hereunder, except for provisions that survive termination (e.g., confidentiality, indemnification).

**ARTICLE 9:** 

**MISCELLANEOUS**

**9.1 Governing Law**. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to conflict of law principles.

**9.2 Entire Agreement**. This Agreement, together with the Loan Agreement, Term Sheet and warrant certificate, constitutes the entire agreement between the parties, superseding all prior agreements.

**9.3 Amendments**. Any amendment must be in writing and signed by both parties.

**9.4 Notices**. All notices shall be in writing and delivered to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Company: FAVO Capital, Inc., 4300 N. University Drive, Suite D-105, Lauderhill, Florida 33351.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Holder: STEWARDS INTERNATIONAL FUNDS PCC (on behalf of the STEWARDS PRIVATE CREDIT FUND), 12th Floor, Nexteracom Tower, Tower 1, Ebene, Quatre Bornes, Mauritius 72201.

**9.5 Severability**. If any provision is found invalid, the remaining provisions shall remain in full force and effect.

**9.6 Assignment**. The Holder may assign the Warrants only with the Company's prior written consent, except as permitted under Section 5.1. The Company may not assign its obligations without the Holder's consent.

**9.7 Counterparts**. This Agreement may be executed in counterparts, each deemed an original, including via electronic signatures, which are binding.

**9.8 Indemnification**. The Holder shall indemnify the Company against losses arising from the Holder's breach of representations or warranties. The Company shall indemnify the Holder against losses arising from the Company's breach.

**9.9 Confidentiality**. The Holder agrees to keep confidential all non-public information provided by the Company (e.g., financial projections, subsidiary performance), except as required by law or with the Company's consent.

IN WITNESS WHEREOF, the undersigned have executed this Warrant Agreement as of the Effective Date.

---

| | |
|:---|:---|
| &nbsp;&nbsp; FAVO CAPITAL, INC.<br>By: <u>/s/ Shaun Quin</u><br> Name: Shaun Quin<br> Title: President | &nbsp;&nbsp; STEWARDS INTERNATIONAL FUNDS PCC (on behalf of the STEWARDS PRIVATE CREDIT FUND),<br> By: <u>/s/ Kowen Pareemamun</u><br> Name: Kowen Pareemamun<br> Title: Director |

---

## Exhibit 14.1

**FAVO CAPITAL, INC.**

**<u>CODE OF BUSINESS CONDUCT AND ETHICS</u>**

**INTRODUCTION** 

Favo Capital, Inc. values honesty, integrity and adherence to the highest ethical standards. Each of us has a responsibility for upholding these values and maintaining a commitment to basic principles of business ethics and good judgment. This Code of Business Conduct and Ethics (the "Code") has been developed as a guide to our adherence to these legal and ethical responsibilities. This Code is designed to deter wrongdoing and to promote:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ full, fair, accurate, timely and understandable disclosure in reports and documents we file with or submit to the U.S. Securities and Exchange Commission (the "SEC") and in our other public communications;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ compliance with applicable laws, rules and regulations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ the prompt internal reporting of violations of this Code; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ accountability for adherence to this Code.

This Code applies to all directors, officers and employees of Favo Capital, Inc., its subsidiaries and any subsidiaries it may form in the future (collectively, "FAVO" or the "Company").

This Code should help guide your conduct in the course of our business. Many of the principles described in this Code, however, are general in nature, and the Code does not cover every situation that may arise. Use common sense and good judgment in applying this Code. If you have any questions about the Code, or are unsure about whether an action or inaction that you intend to take is permitted under the Code, please contact our Chief Financial Officer.

We are committed to continuously reviewing and updating our policies and procedures. We therefore reserve the right to amend, alter or terminate this Code at any time and for any reason, subject to applicable law.

Part of your job and ethical responsibility is to help enforce this Code. You should be alert to possible violations and report them pursuant to the "Reporting Procedures" described below.

Violations of law, this Code or other Company policies or procedures can lead to disciplinary action up to and including employment termination and forfeiture of any options granted.

**BASIC PRINCIPLES**

**Employment Practices** 

***Equal Opportunity and Diversity***

FAVO is fully committed to equal employment opportunity and compliance with the letter and spirit of the full range of fair employment practices and nondiscrimination laws, including all wage and hour laws. In addition, we believe that diversity is critical to our success. FAVO seeks to hire, develop and retain the most talented individuals from a diverse candidate pool.

***Harassment***

FAVO employees have the right to work in an environment free from discrimination, harassment and intimidation, whether committed by or against a co-worker, supervisor, customer, vendor or visitor. Harassment, whether based on a person's gender, sexual orientation, race, ethnicity, religion, national origin, citizenship, age, disability, socioeconomic status or marital status, is repugnant and completely inconsistent with FAVO's commitment to provide a respectful, professional and dignified workplace. Discrimination in any area of employment, including hiring, advancement, compensation, discipline, and termination, will not be tolerated. FAVO also prohibits any employee from making any claim known by that employee to be false.

***Safe and Healthy Workplace***

To meet our responsibilities to employees, customers, and investors, FAVO must maintain a healthy and productive workplace. Employees must report all safety concerns or accidents no matter how slight the problem. Violence or the threat of violence will not be tolerated, whether committed by or against a co-worker, supervisor, customer, vendor or visitor. Misusing controlled substances or selling, manufacturing, distributing, possessing, using or being under the influence of alcohol or illegal substances on the job is absolutely prohibited.

**Compliance with Government and Industry Regulation** 

You must comply with all applicable federal, state and local laws, regulations, rules and regulatory orders applicable to our business. Each employee, director, agent, contractor and consultant must acquire appropriate knowledge of the requirements of his or her locale relating to his or her duties sufficient to enable him or her to recognize potential dangers and to know when to seek advice from our legal counsel. Violations of laws, regulations, rules and orders may subject the employee, director, agent, contractor or consultant to individual criminal or civil liability, as well as to discipline by FAVO. These violations may also subject FAVO to civil or criminal liability and/or the loss of business.

**Insider Trading** 

All employees are required to comply with the federal laws and the Code regarding the disclosure and use of material non-public information. Anyone who possesses material non-public information and who buys or sells stock or other equity securities of FAVO or any other public company, or "tips" another investor, may be liable for damages, civil and criminal penalties and may also be subject to disciplinary action by FAVO. It is illegal to trade in securities based on inside information. Inside information is any information about FAVO or another company that has not reached the public and is likely to be considered important by investors in deciding whether to buy or sell publicly traded securities. Examples include news about FAVO's financial results before it is formally released, planned actions regarding FAVO stock, and unannounced senior management changes. Inside information also includes non-public information about other companies that you receive in the course of your employment. Employees who have access to inside information hold special positions of trust and confidence and must not abuse this trust. Never trade in securities or other property based on inside information, or "tip" others who might make an investment decision based on this information. Trading under such circumstances is illegal, whether you trade for your own benefit or for the benefit of others. Do not take advantage of inside information when buying or selling FAVO stock, options in FAVO stock, or the stock of any supplier or customer of FAVO or one of its subsidiaries. This applies whether you act directly or through someone else, such as a family member. Stricter standards apply to officers and certain other manager-level employees. Contact our Chief Financial Officer or legal counsel if you have any doubts about the information you use to help make buying or selling decisions. For more information regarding compliance with FAVO's insider trading policy, see our "Procedures And Guidelines Governing Insider Trading And Tipping."

**Prohibition against Short-Term or Speculative Transactions** 

All directors, officers, employees and holders of greater than 10% of the Company's securities are prohibited from engaging in short-term or speculative transactions involving Company securities, such as publicly traded options, short sales, puts, and calls, and hedging transactions. This prohibition also applies to holding Company securities in a margin account and "short sales against the box", which are sales of Company securities where a person does not deliver the shares he or she owns to settle the transaction but instead delivers other shares that his or her broker has borrowed from others. Notwithstanding the foregoing, the Company's Board of Directors may waive this policy on a case-by-case basis if: (i) the Board of Directors forms the opinion that such waiver is not adverse to the interests of the Company or its shareholders; (ii) where the director, officer, or 10% holder seeking such waiver has demonstrated to the satisfaction of the Board of Directors that he or she has sufficient assets to pay the obligation without resort to Company securities; and (iii) the director, officer, or 10% holder seeking such waiver otherwise is in compliance with Section 16(c) of the Securities Exchange Act of 1934, as amended. All other employees must obtain the specific prior written authorization of the Chief Executive Officer and the Chief Financial Officer before engaging in short-term or speculative transactions involving Company securities. Additionally, any executive officer or member of the Board of Directors shall seek approval of the Board of Directors prior to any pledge of the Company's securities, such approval to be included in the minutes of the meetings of the Board of Directors or consent resolutions.

**Free and Fair Competition** 

FAVO is committed to obeying both the letter and spirit of laws designed to encourage and protect free and fair competition, which generally address the following areas: pricing practices (including price discrimination), discounting, terms of sale, promotional allowances, product bundling, termination, and many other practices.

Competition laws also govern, usually quite strictly, relationships between FAVO and its competitors. As a general rule, contacts with competitors should be limited and should always avoid subjects such as prices or other terms and conditions of sale, customers and affiliates. Employees, directors, agents, contractors or consultants may not knowingly make false or misleading statements regarding FAVO's competitors or the products of its competitors, customers or suppliers. Participation with competitors in a trade association is acceptable when the association has been properly established, has a legitimate purpose, has limited its activities to that purpose and such participation has been approved by a supervisor.

You should never enter into an agreement or understanding, written or oral, express or implied, with any competitor concerning prices, discounts, other terms or conditions of sale, profits or profit margins, costs, rebates, referrals, allocation of product or geographic markets, allocation of customers, or boycotts of customers or suppliers, or even discuss or exchange information on these subjects. In some cases, legitimate joint ventures with competitors may permit exceptions to these rules, but our Chief Financial Officer must review all such proposed ventures in advance. These prohibitions are absolute and strict observances are required. Collusion among competitors is illegal, and the consequences of a violation are severe.

Although the spirit of these laws, known as "antitrust," or "competition," or "consumer protection" or "unfair competition" laws, is straightforward, their application to particular situations can be quite complex. To ensure that FAVO complies fully with these laws, each of us should have a basic knowledge of them and should involve our Chief Financial Officer early on when questionable situations arise.

**Environmental Laws** 

FAVO is committed to being an environmentally responsible corporate citizen. You are expected to comply with or exceed all applicable laws and regulations related to the environment in each of our facilities. We encourage employees to minimize the impact of the Company's business operations on the environment with methods that are socially responsible and economically sound.

**Business Records** 

***Accuracy***

FAVO requires its employees to honestly and accurately record and report financial and other business information in order to make responsible business decisions and full, fair, accurate, timely and understandable financial and other disclosures to regulatory agencies and the public. FAVO is legally required to maintain an effective system of internal controls to ensure that transactions are properly authorized, assets are safeguarded, financial records are reliable and operations are conducted in accordance with directives of the Board of Directors and management. All of our books, records, accounts and financial statements must be maintained in reasonable detail, most appropriately reflect FAVO's transactions and must conform both to applicable legal requirements and to our system of internal controls.

To maintain the integrity of the accounting records, all entries in FAVO's books and records must be prepared carefully and honestly and must be supported by adequate documentation to provide a complete, accurate, and auditable record. All employees have a responsibility to ensure that their work is fair and accurate. No false or misleading entry may be made for any reason, and no employee may assist any other person in making a false or misleading entry.

Employees must timely communicate required information to our management to enable decisions regarding disclosure. Public statements and filings regarding our business and financial status must be true, accurate, complete, and not misleading in all material respects. Business records and communications often become public and all officers, directors and employees should avoid exaggeration, derogatory remarks, guesswork, or inappropriate characterizations of people and companies.

Full disclosure reinforces responsibility and acts as a powerful deterrent to wrongdoing. Therefore, undisclosed or unrecorded transactions are not allowed for any purpose. Any employee having information or knowledge of any undisclosed or unrecorded transaction or the falsification of records should report it promptly as detailed under the heading "Reporting Procedures".

***Maintaining and Managing Records***

We are required by local, state, federal, foreign and other applicable laws, rules and regulations to retain certain records and to follow specific guidelines in managing our records. Records include email, paper documents, CDs, computer hard disks, floppy disks, and all other media. Civil and criminal penalties for failure to comply with such guidelines can be severe for employees, directors, agents, contractors and FAVO, and failure to comply with such guidelines may subject the employee, director, agent, contractor or consultant to disciplinary action, up to and including termination of employment or business relationship at FAVO's sole discretion.

A legal hold suspends all document destruction procedures in order to preserve appropriate records under special circumstances, such as litigation or government investigations. Our Chief Financial Officer determines and identifies what types of Company records or documents are required to be placed under a legal hold. Every employee, director, agent, contractor and consultant must comply with this policy. Failure to comply with this policy may subject the employee, director, agent, contractor or consultant to disciplinary action, up to and including termination of employment or business relationship at FAVO's sole discretion.

Our Chief Financial Officer will notify you if a legal hold is placed on records for which you are responsible. You then must preserve and protect the necessary records in accordance with instructions from our Chief Financial Officer. Records or supporting documents that have been placed under a legal hold must not be destroyed, altered or modified under any circumstances. A legal hold remains effective until it is officially released in writing by our Chief Financial Officer. If you are unsure whether a document has been placed under a legal hold, you should preserve and protect that document while you check with our Chief Financial Officer. If you have any questions about this policy you should contact our Chief Financial Officer.

**Confidential or Copyrighted Information** 

***FAVO Confidential Information***

FAVO's confidential information is a valuable asset. Our confidential information includes proprietary technology, product designs, names and lists of customers and employees, business plans and financial information. This information is the property of FAVO and may be protected by patent, trademark, copyright and trade secret laws. All confidential information must be used for FAVO business purposes only. Every employee, director, agent, contractor and consultant must safeguard it.

When you joined FAVO, you signed an agreement to protect and hold confidential FAVO's proprietary information. This agreement remains in effect for as long as you work for FAVO and after you leave FAVO. Under this agreement, you may not disclose FAVO's confidential information to anyone or use it to benefit anyone other than FAVO without the prior written consent of an authorized FAVO officer.

To further FAVO's business, from time to time, our confidential information may be disclosed to potential business partners. However, such disclosure should never be done without carefully considering its potential benefits and risks. If you determine in consultation with your manager and other appropriate management that disclosure of confidential information is necessary, you must then contact our Chief Financial Officer to ensure that an appropriate written nondisclosure agreement is signed prior to the disclosure. FAVO has standard nondisclosure agreements suitable for most disclosures. You must not sign another company's nondisclosure agreement or accept changes to our standard nondisclosure agreements without review and approval by our Chief Financial Officer. Nondisclosure agreements may only be signed by an authorized FAVO employee. You are also responsible for properly labeling any and all documentation shared with or correspondence sent to our outside counsel as "Attorney-Client Privileged."

***Confidential Information of Others***

You must take special care to handle the confidential information of others responsibly. You should never accept information offered by another company that is represented as confidential, or which appears from the context or circumstances to be confidential, unless an appropriate nondisclosure agreement has been signed with the party offering the information. Our Chief Financial Officer can provide nondisclosure agreements to fit any particular situation, and will coordinate appropriate execution of such agreements on behalf of FAVO. Even after a nondisclosure agreement is in place, you should accept only the information necessary to accomplish the purpose of receiving it. If more detailed or extensive confidential intonation is offered and it is not necessary for your immediate purposes, it should be refused.

Once another company's confidential informational has been disclosed to us, we have an obligation to abide by the terms of the relevant nondisclosure agreement and limit its use to the specific purpose for which it was disclosed and to disseminate it only to other employees with a need to know the information. Every employee, director, agent, contractor and consultant involved in a potential business relationship with another company must understand and strictly observe the restrictions on the use and handling of confidential information. When in doubt, consult our Chief Financial Officer.

You should never attempt to obtain a competitor's confidential information by improper means, and you should especially never contact a competitor regarding their confidential information. While we may interview and/or employ former employees of competitors, we recognize and respect the obligations of those employees not to use or disclose the confidential information of their former employers, and you should refrain from seeking such information.

You should never steal or unlawfully use the information, material, products, intellectual property, or proprietary or confidential information of third parties, including customers, business partners or competitors.

***Copyrighted Information***

FAVO subscribes to newsletters, reference works, online reference services, magazines, books, and other digital and printed works. FAVO also licenses copyrighted computer software. Copyright law generally protects these works, and their unauthorized copying and distribution constitute copyright infringement. Unauthorized duplication of copyrighted works violates the law and is contrary to our standards of conduct. You must first obtain the consent of the copyright holder before copying these works or significant parts of them. When in doubt about whether you may copy a publication, consult our Chief Financial Officer.

**Protection and Proper Use of FAVO Assets** 

***Computers and Other Equipment***

To the extent that FAVO has furnished you with equipment, you must care for that equipment and use it responsibly only for FAVO business purposes. While computers and other electronic devices are made available to certain employees to assist them to perform their jobs, all computers and electronic devices, whether used entirely or partially on FAVO's premises or with the aid of FAVO's equipment or resources, must remain fully accessible to FAVO and, to the maximum extent permitted by law, will remain the sole and exclusive property of FAVO. Any loss, misuse or suspected theft of computers or other equipment should be reported to a supervisor or the Chief Financial Officer.

You are expected to use electronic communication devices in a legal, ethical and appropriate manner. You should not maintain any expectation of privacy with respect to information transmitted over, received by, or stored in any electronic communications device owned, leased, or operated in whole or in part by or on behalf of FAVO. To the extent permitted by applicable law, FAVO retains the right to gain access to any information received by, transmitted by, or stored in any such electronic communications device, by and through its employees, directors, agents, contractors, or representatives, at any time, either with or without an employee's or third party's knowledge, consent or approval.

All software used by employees to conduct Company business must be appropriately licensed. Never make or use illegal or unauthorized copies of any software, whether in the office, at home, or on the road, since doing so may constitute copyright infringement and may expose you and FAVO to potential civil and criminal liability. In addition, use of illegal or unauthorized copies of software may subject the employee to disciplinary action, up to and including termination. ****

***Company Funds and Employees***

You are responsible for all FAVO funds and employees over which you exercise control. FAVO funds must be used only for Company business purposes and FAVO employees must perform work only for Company business purposes. You must take reasonable steps to ensure that FAVO receives good value for its funds spent and maintain accurate and timely records of each and every expenditure made using FAVO funds. Expense reports must be accurate and submitted in a timely manner. You must not use FAVO funds or employees for any personal or non-FAVO purpose.

**Corporate Opportunities** 

Employees, officers and directors may not exploit for their own personal gain opportunities that are discovered through the use of Company property, information or position unless the opportunity is disclosed fully in writing to our Board of Directors and the Board of Directors declines to pursue such opportunity.

**Conflicts of Interest** 

Each of us has a responsibility to FAVO, its stockholders and each other. Although this duty does not prevent us from engaging in personal transactions and investments, it does demand that we avoid situations where a conflict of interest might occur or appear to occur. FAVO is subject to scrutiny from many different individuals and organizations. We should always strive to avoid even the appearance of impropriety.

Two factors that will be considered when determining whether a conflict of interest exists are: (1) whether the employee or director is or could be in a position to influence FAVO's relationship with the competitor, partner, affiliate, or customer; and (2) whether the judgment of the employee or director could be affected, or could appear to be affected, as it relates to the competitor, partner, affiliate, or customer because of the significance of the personal interest of the employee or director. Conflicts of interest may also arise when an employee, officer or director (or his or her family members) receives improper personal benefits as a result of the employee's, officer's or director's position at FAVO.

Without limiting the general scope of this policy, the following relationships and courses of conduct will be considered to involve conflicts of interest unless in special circumstances they are specifically approved and compliance with this policy is waived (i) in the case of a director or executive officer, by our Board of Directors, and (ii) in all other cases, by our Chief Financial Officer:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Making personnel decisions based on family or social relationships rather than based on objective job-related criteria.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Initiating or approving (explicitly or implicitly) any form of harassment of employees.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Serving as an employee, officer or director of a company that (a) is in direct competition with FAVO or (b) is a significant customer, partner, affiliate or contractor of FAVO (meaning a customer, partner, affiliate or contractor whose transactions with FAVO since the beginning of the last fiscal year, or whose currently proposed transactions with FAVO, exceed $60,000).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Having a direct or indirect material financial interest in any privately held company that (a) is in direct competition with FAVO or (b) is a significant customer, partner, affiliate or contractor of FAVO.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Holding more than a 5% interest in any publicly held company that (a) is in direct competition with FAVO or (b) is a significant customer, partner, affiliate or contractor of FAVO.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Lending money to, guaranteeing debts of, or borrowing money from a direct competitor or a significant customer, partner, affiliate or contractor of FAVO by or for an employee or director or an immediate relative of an employee or director.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Knowingly and improperly using or disclosing to FAVO any proprietary information or trade secrets of any former or concurrent employer, or other person or entity with whom obligations of confidentiality exist.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Unlawfully discussing prices, costs, customers, sales or markets with competing companies or their agents, employees or directors, or making any unlawful agreements with respect to prices or markets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Improperly using or authorizing the use of any inventions that are the subject of patent claims of any other person or entity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Consummating any transaction between an executive officer or member of the Board of Directors, or any of their respective affiliates, with another executive officer or member of the Board of Directors, or any of their respective affiliates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Shall not receive compensation in connection with services performed relating to any transaction entered into by the Company, other than compensation received in the ordinary course of your employment by the Company or in connection with the performance of your duties as a director of the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Will avoid making any personal investment, acquiring any personal financial interest or entering into any association that interferes, might interfere, or might reasonably be thought to interfere, with your independent exercise of judgment on behalf of the Company and in its best interests; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Will not take or otherwise appropriate for your personal benefit, or for the benefit of any other person or enterprise, any opportunity or potential opportunity that arises or may arise in any line of business in which the Company engages or is considering engaging without first notifying and obtaining the written approval of the Company's CEO or CFO.

There is no "bright-line" test for, or comprehensive definition of what constitutes, a conflict of interest, however the minimum standard is compliance with all applicable laws, this Code of Ethics, and the Business Conduct Code. Accordingly, while not every situation that may give rise to a conflict of interest can be enumerated either in this Code of Ethics or the Insider Trading Policy, you must treat as a conflict of interest any situation in which you, or any person with whom you have a personal relationship, including but not limited to a family member, in-law, business associate, or a person living in your personal residence:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· solicits or accepts, directly or indirectly, from customers, suppliers or others dealing with the Company any kind of gift or other personal, unearned benefit as a result of your position with the Company (other than non-monetary items that are consistent with common business practices and do not interfere with your judgment and the best interests of the Company);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· has any known financial interest in any competitor, customer, supplier or other party dealing with the Company (other than actual ownership of: (i) any interest in a publicly traded mutual fund that holds an interest in such a company, or (ii) publicly traded securities of such a company in the aggregate amount of not greater than 1% of the outstanding common stock of such company);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· has a consulting, managerial or employment relationship in any capacity with a competitor, customer, supplier or other party dealing with the Company, including the provision of voluntary services; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· acquires, directly or indirectly, real property, leaseholds, patents or other property or rights in which the Company has, or you know or have reason to believe at the time of acquisition that the Company is likely to have, an interest.

With respect to FAVO directors and executive officers only, any questions on whether a relationship or course of conduct constitutes a conflict of interest should be submitted to our Chief Financial Officer, which will then make a recommendation to our independent directors. If a majority of the independent directors determines that a director or executive officer's relationship or course of conduct may constitute a conflict of interest, it will so notify that person and specify a reasonable period of time in which that person can take steps to remedy the possible conflict. If the possible conflict is not remedied within the specified period of time, the relationship or course of conduct will be deemed to be a conflict of interest in violation of this policy unless the relationship or course of conduct is specifically approved and compliance with this policy is waived by our independent directors.

With respect to FAVO non-executive employees only, any other employment, consulting or other business activity must be disclosed to and approved in writing by our Chief Financial Officer, in which case the activity will not be deemed to constitute a conflict of interest in violation of this policy. However, if that activity is prohibited by the terms of that person's employment agreement with the Company, the employee must also obtain a written waiver of the relevant terms of the employment agreement before engaging in such an activity. Because other conflicts of interest may arise, it would be impractical to attempt to list all possible situations. If a proposed transaction or situation raises any questions or doubts in your mind, you should consult our Chief Financial Officer.

**Payments or Gifts from Others** 

Under no circumstances may employees, directors, agents, contractors or consultants accept any offer, payment, promise to pay, or authorization to pay any money, gift, or anything of value from customers, vendors, consultants, etc. that is perceived as intended, directly or indirectly, to influence any business decision, any act or failure to act, any commitment of fraud, or any opportunity for the commission of any fraud. Inexpensive gifts, infrequent business meals, celebratory events and entertainment, provided that they are not excessive or create an appearance of impropriety, do not violate this policy. Questions regarding whether a particular payment or gift violates this policy are to be directed to our Chief Financial Officer.

Gifts given by FAVO to suppliers or customers or received from suppliers or customers should always be appropriate to the circumstances and should never be of a kind that could create an appearance of impropriety. The nature and cost of such gifts must always be accurately recorded in our books and records.

**Charitable Contributions and Political Activities** 

FAVO encourages our employees to become involved in community activities and charitable organizations. However, no employee may bring undue pressure on another employee to contribute to a charitable organization. FAVO respects the rights of our employees to participate in the political process. Indeed, engaging in the process builds a stronger community and a better political system. However, you must at all times make clear that your views and actions are your own, and not those of FAVO. Additionally, employees may not use Company time or resources to support personal political activities or use their position to coerce or pressure employees to make contributions or support a candidate or political cause.

**Foreign Corrupt Practices Act** 

FAVO requires full compliance with the Foreign Corrupt Practices Act ("FCPA") by all of its employees, directors, agents, contractors and consultants. All employees, directors, agents, contractors and consultants, whether located in the United States or abroad, are responsible for FCPA compliance and the procedures to ensure FCPA compliance. All managers and supervisory personnel are expected to monitor continued compliance with the FCPA to ensure compliance with applicable moral, ethical and professional standards. FCPA compliance includes our policy on Maintaining and Managing Records discussed above. In addition, no contract or agreement may be made with any business in which a government official or employee holds a significant interest, without the prior approval of our Chief Financial Officer. For more information regarding your obligations under the FCPA, see our "Foreign Corrupt Practices Act Policy."

**Company Spokespersons** 

Specific policies have been established regarding who may communicate information to the press and the financial analyst community. Any inquiries or calls from financial analysts should be referred to our Chief Financial Officer. All inquiries or calls from the press should be referred to our Chief Financial Officer.

FAVO has designated our Chief Executive Officer and Chief Financial Officer as our official spokespersons for all matters, including financial matters. These designees are the only people who may communicate with the press or financial analysts on behalf of FAVO.

No other person may communicate with the press or financial analysts on behalf of FAVO unless specifically authorized to do so in writing in advance by our Chief Executive Officer or Chief Financial Officer, for a specific purpose, and then only to the extent so authorized. Any employee or director publication or publicly made statement that might be perceived or construed as attributable to FAVO and that is made outside the scope of his or her employment or directorship must be reviewed and approved in writing in advance by our Chief Financial Officer and must include a disclaimer that the publication or statement represents the views of the specific author and not of FAVO.

**REPORTING PROCEDURES** 

Maintaining ethical standards is the responsibility and obligation of every FAVO employee. Early identification and resolution of conflict of interest and other ethical issues that may arise are critical to maintaining our commitments to our customers, vendors, investors, and to ourselves and our coworkers. FAVO employees are expected to treat compliance with ethical standards as a critical element of their responsibilities. While this Code sets forth a wide range of practices and procedures, it cannot address every issue that may arise. If you are unsure of what to do in a situation, you should seek additional guidance and information before you act. If something seems unethical or improper, or if you have questions regarding the best course of action, you should promptly contact any of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ FAVO's Chief Strategy Officer

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ FAVO's Chief Financial Officer

The Hotline is operated by specially trained third-party representatives. The Hotline is available 24 hours a day, 7 days a week. Hotline representatives will listen to your concerns, ask questions, and review the information provided. They will then forward your concern to the Company's Chief Financial Officer, which will take appropriate action.

It is against Company policy to retaliate against any employee who raises a concern in good faith and, if requested and to the extent possible, every effort will be made to maintain confidentiality. All reported violations will be acted on appropriately. If your concern requires an investigation, the Company will respond promptly. If possible, you will be informed about the status of the investigation and the outcome of the matter. However, FAVO has an obligation of confidentiality to all employees, including those being investigated.

**DISCIPLINARY ACTIONS** 

The matters covered in this Code are of the utmost importance to FAVO, its stockholders and its business partners, and are essential to our ability to conduct our business in accordance with our stated values. We expect all of our employees, directors, agents, contractors and consultants to adhere to these rules in carrying out their duties for FAVO.

FAVO will take appropriate action against any employee, director, agent, and contractor or consultant whose actions are found to violate these policies or any other Company policies. Disciplinary actions may include immediate termination of employment or business relationship at FAVO's sole discretion. Where FAVO has suffered a loss, it may pursue its remedies against the individuals or entities responsible. Where laws have been violated, FAVO will cooperate fully with the appropriate authorities.

**WAIVERS AND AMENDMENT OF THE CODE** 

Any waiver of any provision of this Code for a member of our Board of Directors or an executive officer, or any amendment of this Code, must be approved in writing by our Board of Directors and promptly disclosed pursuant to applicable laws and regulations. Any waivers of any provision of this Code with respect to any other employee, agent, contractor or consultant must be approved in writing by our Chief Financial Officer.

**ACKNOWLEDGEMENT OF RECEIPT**

I hereby acknowledge that I have received a copy of the "CODE OF BUSINESS CONDUCT AND ETHICS" and agree to comply with its terms. I understand that violation of CODE OF BUSINESS CONDUCT AND ETHICS may subject me to severe civil and/or criminal penalties and that violation of the terms of this policy may subject me to discipline by Favo Capital, Inc. and its subsidiaries up to and including termination for cause.

Signed: _______________________________________________________

Name (please print): _____________________________________________

Date: _________________________________________________________

## Exhibit 21.1

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| | | | | |
|:---|:---|:---|:---|:---|
| **Subsidiary Name** | **Domicile** | **Officer/Director/Manager** | **% Owned** | **Owned By** |
| &nbsp;&nbsp;Favo Holdings, LLC | Delaware | Vincent Napolitano | 65 | Vincent Napolitano |
| &nbsp;&nbsp;Favo Holdings, LLC | Delaware | Vincent Napolitano | 35 | Shaun Quin |
| &nbsp;&nbsp;FORE Funding CA, LLC | Delaware | Vincent Napolitano | 100 | FAVO Capital Inc |
| &nbsp;&nbsp;FAVO Funding CA, LLC | Delaware | Vincent Napolitano | 100 | FAVO Capital Inc |
| &nbsp;&nbsp;FAVO Funding, LLC | Delaware | Vincent Napolitano | 100 | FAVO Capital Inc |
| &nbsp;&nbsp;FAVO Group Human Resources LLC | <br>Delaware | <br>Vincent Napolitano | 100 | <br>FAVO Capital Inc |
| &nbsp;&nbsp;FAVO Group, LLC | Delaware | Vincent Napolitano | 100 | FAVO Capital Inc |
| &nbsp;&nbsp;Honeycomb, LLC | Delaware | Vincent Napolitano | 100 | FAVO Capital Inc |
| &nbsp;&nbsp;FORE Funding, LLC | Delaware | Vincent Napolitano | 100 | FAVO Capital Inc |
| &nbsp;&nbsp;FC Sub Fund LLC | Delaware | Vincent Napolitano | 100 | FAVO Capital Inc |
| &nbsp;&nbsp;LendTech CRM LLC | Florida | Shaun Quin | 100 | FAVO Capital Inc |
| &nbsp;&nbsp;DBOSS Funding LLC | Florida | Shaun Quin | 100 | FAVO Capital Inc |
| &nbsp;&nbsp;FAVO Capital | &nbsp;&nbsp;Dominican Republic | &nbsp;&nbsp;Shaun Quin | 100 | &nbsp;&nbsp;FAVO Capital Inc |
| &nbsp;&nbsp;FAVO Capital DR | &nbsp;&nbsp;Dominican Republic | Shaun Quin | 99 | FAVO Capital Inc. |
| &nbsp;&nbsp;Block 40, LLC | &nbsp;&nbsp;Florida | &nbsp;&nbsp;Block 40 Managers, LLC | 100 | FAVO Capital Inc. |
| &nbsp;&nbsp;Block 40 Managers, LLC | &nbsp;&nbsp;Florida | &nbsp;&nbsp;FAVO Capital Inc. | 100 | FAVO Capital Inc. |
| &nbsp;&nbsp;Block 40 Investments Holdings, LLC | &nbsp;&nbsp;Florida | &nbsp;&nbsp;FAVO Capital Inc. | 100 | FAVO Capital Inc. |

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## Exhibit 23.1

*Your Vision Our Focus*

 

**CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

We hereby consent to the use in this Registration Statement on Form S-1/A No. 1 (the "Registration Statement") of our report dated April 15, 2025, relating to the financial statements of Favo Capital, Inc. and its subsidiaries (the "Company"), which includes an explanatory paragraph relating to the Company's ability to continue as a going concern, appearing in the Annual Report (Form 10-K) of the Company for the years ended December 31, 2024 and 2023.

We also consent to the reference to our firm under the heading "Experts" including in such Registration Statement.

Turner, Stone & Company LLP

Dallas, Texas

September 12, 2025

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| Turner, Stone & Company, L.L.P.<br> Accountants and Consultants<br> 12700 Park Central Drive, Suite 1400<br> Dallas, Texas 75251<br> Telephone:972-239-1660 ⁄ Facsimile: 972-239-1665<br> Toll Free: 877-853-4195<br> Web site: turnerstone.com | ![](image_027.jpg)<br> **INTERNATIONAL ASSOCIATION OF ACCOUNTANTS AND AUDITORS** |

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## Corresp

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***Via EDGAR***

September 12, 2025

United States Securities and Exchange Commission

100 F Street, N.E. Mailstop 3720

Washington D.C., 20549-7010

Attention: Cara Lubit

***Re: Favo Capital, Inc. Amendment No. 1 to Registration Statement on Form S-1 Filed May 14, 2025 File No. 333-285663***

Dear Cara Lubit:

We write on behalf of Favo Capital, Inc. (the "Company") in response to Staff's letter of March 14, 2025, by the Division of Corporation Finance of the United States Securities and Exchange Commission (the "Commission") regarding the above-referenced Draft Registration Statement on Form S-1, filed February 13, 2025 (the Comment Letter"). Paragraph numbering used for each response corresponds to the numbering used in the Comment letter.

**DRAFT REGISTRATION STATEMENT ON FORM S-1 SUBMITTED FEBRUARY 13, 2025** 

**GENERAL**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. PLEASE TELL US WHETHER YOU INTEND TO REVISE FUTURE FILINGS TO INCLUDE A CAPITALIZATION TABLE, OR A DISCUSSION DETAILING THE COMPANY'S CAPITALIZATION, THEREBY PROVIDING INVESTORS WITH CLEAR INFORMATION ABOUT THE EQUITY OWNERSHIP STRUCTURE AND POTENTIAL DILUTION.

In response to this comment, the Company's amended registration statement includes a Capitalization section and accompanying table.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. WE NOTE YOUR DISCLOSURE ON PAGE 33 THE MR. NAPOLITANO, WITH HIS COMMON STOCK AND SERIES C PREFERRED STOCK, HAS A MAJORITY OF THE TOTAL VOTE ON ALL MATTERS SUBMITTED TO THE STOCKHOLDERS FOR THEIR ACTIONS AND CONSIDERATION, INCLUDING THE ELECTION OF DIRECTORS. PLEASE CLARIFY WHETHER YOU WILL BE CONSIDERED A "CONTROLLED COMPANY" UNDER EXCHANGE LISTING STANDARDS.

In response to this comment, the Company is considered a "controlled company" under Nasdaq listing standards. The founders (Vincent Napolitano, Shaun Quin, and Glen Steward) control more than 50% of the voting power for the election of directors through a voting agreement governing the Series B Preferred Stock, which provides super-voting rights (50 votes per share). This agreement creates a "group" under Nasdaq IM-5615-5, exempting the Company from certain governance requirements. We have revised the S-1 to disclose this status and our reliance on the exemption.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. PLEASE INCLUDE A DEFINITION FOR ALL DEFINED TERMS THE FIRST TIME THEY ARE USED IN THE PROSPECTUS. FOR EXAMPLE, DEFINE "FAVO GROUP OF COMPANIES."

In response to this comment, the Company defined terms used for the first time in the amended registration statement, including the definition for "Favo Group of Companies."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. WE NOTE THE STATEMENT ON PAGE 46 THAT, SINCE INCEPTION, YOU HAVE EXTENDED "OVER $140 MILLION IN CAPITAL AND SUPPORTED MORE THAN 10,000 BUSINESSES NATIONWIDE." HOWEVER, WE NOTE THE FEBRUARY 14, 2025 PRESS RELEASE QUOTING SENIOR OFFICERS OF FAVO AND INDICATING THAT THE COMPANY "HAS SYNDICATED OVER $1 BILLION IN CAPITAL AND SUPPORTED MORE THAN 20,000 BUSINESSES." PLEASE REVISE PAGE 46 AND/OR WHERE APPROPRIATE TO RECONCILE THE APPARENT INCONSISTENCY.

In response to this comment, the Company has revised its disclosure to clarify that the $153 million in capital originated and more than 10,000 businesses supported since 2020 reflect our direct and syndicated MCA activities. The prior reference to $1 billion syndicated and 20,000+ businesses in the February 2025 press release was an error and has been corrected in subsequent communications. The Company confirms that the figures provided in the amended registration statement are accurate and consistent with our records.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. WE NOTE YOU WILL NOT CLOSE THE OFFERING UNLESS YOU ARE LISTED ON NASDAQ. WE ALSO NOTE THE CLOSING IS EXPECTED TO OCCUR 1 TO 2 DAYS AFTER TRADING. PLEASE REVISE TO ADDRESS THE EXTENT TO WHICH THE RESALE OFFERING IS EXPECTED TO CONTINUE IF THE PRIMARY OFFERING DOES NOT CLOSE. CLARIFY THE REASONS FOR THE 1 TO 2 DAY TIME PERIOD AND ADVISE US OF WHAT FACTORS WILL DETERMINE WHEN THE CLOSING WILL OCCUR, ASSUMING NASDAQ APPROVAL.

In response to this comment, the Company has revised the registration statement to clarify the procedures and conditions related to the fully underwritten public offering, the reverse stock split, and the closing of the offering, as well as the status of the resale offering. The Company's primary offering is a fully underwritten public offering, contingent upon achieving listing on The Nasdaq Capital Market. No resales covered by the prospectus will occur unless and until the primary offering closes. If the primary offering does not close (e.g., due to failure to satisfy Nasdaq listing requirements or other conditions precedent in the underwriting agreement), the resale offering will not proceed, as the registration statement will not be used for resales absent a successful primary offering.

The Company has coordinated with FINRA and its underwriters to effect a reverse stock split, which will be implemented on the first trading day following the effectiveness of the registration statement, as declared by the SEC. The reverse split is necessary to meet Nasdaq's minimum bid price requirement of $4.00 per share (Nasdaq Listing Rule 5550(a)(2)). The Company anticipates that the reverse split will be effective on the first trading day post-effectiveness, with trading of the Company's common stock on a split-adjusted basis commencing on Nasdaq thereafter, subject to Nasdaq's approval of the Company's listing application.

The closing of the primary offering is expected to occur one to two business days after the effectiveness of the registration statement and the commencement of split-adjusted trading, assuming Nasdaq approval and satisfaction of all conditions in the underwriting agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. PLEASE PROVIDE US WITH SUPPLEMENTAL COPIES OF ALL WRITTEN COMMUNICATIONS, AS DEFINED IN RULE 405 UNDER THE SECURITIES ACT, THAT YOU, OR ANYONE AUTHORIZED TO DO SO ON YOUR BEHALF, HAVE PRESENTED OR EXPECT TO PRESENT TO POTENTIAL INVESTORS IN RELIANCE ON SECTION 5(D) OF THE SECURITIES ACT, WHETHER OR NOT YOU RETAINED, OR INTEND TO RETAIN, COPIES OF THOSE COMMUNICATIONS. PLEASE CONTACT MADELEINE MATEO AT (202) 551-3465 TO DISCUSS HOW TO SUBMIT THE MATERIALS, IF ANY, TO US FOR OUR REVIEW.

In response to this comment, the Company acknowledges the request for supplemental copies of all written communications, as defined in Rule 405 under the Securities Act, that the Company, or anyone authorized to act on its behalf, have presented or expect to present to potential investors in reliance on Section 5(d) of the Securities Act.

In response, the Company confirms that it has conducted a thorough review of the Company's records and consulted with the Company's authorized representatives, including underwriters and legal counsel, to identify any such communications, whether or not copies were retained or intended to be retained. To date, no such communications have been identified. For any communications expected to be presented in the future, the Company will ensure compliance with Section 5(d) and maintain records accordingly, supplementing this response as necessary should additional materials arise prior to the completion of the offering process.

**RISKS RELATED TO THE OFFERING AND THE MARKET FOR OUR STOCK, PAGE 10**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. IT IS UNCLEAR WHY YOU BELIEVE THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT APPLY TO YOU. PLEASE REMOVE OR ADVISE WHY YOU BELIEVE THEY ARE AVAILABLE.

In response to this comment, the Company deleted reference to the Safe Harbor in its amended registration statement.

**CORPORATE HISTORY, PAGE 11**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. WE NOTE YOUR DISCLOSURE ON PAGE 12 THAT YOU CHANGED YOUR NAME TO FAVO CAPITAL, INC. ON SEPTEMBER 2, 2020. ON PAGE F-6, YOU DISCLOSE THAT YOU CHANGED YOUR NAME TO FAVO CAPITAL, INC. ON MARCH 2, 2021. PLEASE REVISE YOUR DISCLOSURES TO EXPLAIN OR RECONCILE THESE DIFFERENCES.

In response to this comment, the Company changed its name to Favo Capital, Inc. on September 2, 2020, and updated the registration statement to reflect that date in all places.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. WE NOTE YOUR REFERENCES IN MULTIPLE PLACES WITHIN THE FILING, SUCH AS ON PAGES 12, F- 26 AND F-29, TO THE ACQUISITION OF THE PROPRIETARY SOFTWARE PLATFORM AND CALL CENTER OF LENDTECH, BELIEVE, AND DBOSS. WE ALSO NOTE MULTIPLE REFERENCES TO THE "SIMPLIFIED ACQUISITION," SUCH AS ON PAGES F-25 AND F-29. PLEASE ADDRESS THE ITEMS BELOW.

REVISE YOUR DISCLOSURES THROUGHOUT THE DOCUMENT TO CLARIFY WHETHER THE ACQUISITION OF THE PROPRIETARY SOFTWARE PLATFORM AND CALL CENTER IS THE SAME AS THE "SIMPLIFIED ACQUISITION."

In response to this comment, we revised the filing to define "Simplified Companies" as DBOSS Funding, LLC (d/b/a Simplified Funding), LendTech CRM Solutions LLC, and Believe PMF EIRL, and to define the "Simplified Acquisition" as our January 2, 2024 transaction in which we acquired the proprietary software platform and call-center operations used by the Simplified Companies. All references to the "acquisition of the proprietary software platform and call center" refer to this same Simplified Acquisition, and the defined terms are now used consistently throughout.

REVISE YOUR DISCLOSURE TO CLARIFY WHY YOU REFER TO THIS ACQUISITION AS THE "SIMPLIFIED ACQUISITION."

In response to this comment, we refer to the transaction as the "Simplified Acquisition" because DBOSS Funding, LLC operates under the trade name "Simplified Funding," and the acquired platform and call-center operations constitute the operating infrastructure of that business (together with LendTech and Believe). We added this explanation at the first use of the term.

REVISE YOUR DISCLOSURE ON PAGE F-29 TO REFLECT, IF TRUE, THAT THE TOTAL CONSIDERATION PAID FOR THE ACQUISITION OF THE PROPRIETARY SOFTWARE PLATFORM AND CALL CENTER TOTALED APPROXIMATELY $1,650,000, NOT $650,000.

In response to this comment, we corrected page F-29 (and conforming cross-references) to state that total consideration was approximately $1,650,000 (rather than $650,000), comprised of cash, shares of common stock issued/issuable, and deferred commissions measured at fair value as of the acquisition date in accordance with ASC 805.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. WE NOTE YOUR DISCLOSURE ON PAGE 13 THAT YOU ENTERED INTO A BUSINESS COMMISSION AGREEMENT WITH ROBINPAWS, LLC, WHICH WAS AMENDED IN JANUARY 2025 TO REFER BOTH NEW BUSINESS CLIENTS AND RENEWALS OF EXISTING BUSINESS CLIENTS OF ROBINPAWS TO SERVICES PROVIDED BY FAVO CAPITAL IN EXCHANGE FOR COMMISSIONS. PLEASE REVISE YOUR DISCLOSURE HERE AND/OR ELSEWHERE, AS APPROPRIATE, TO DISCUSS THE MATERIAL TERMS OF THIS AGREEMENT BOTH BEFORE AND AFTER THE JANUARY 2025 AMENDMENT AND TO QUANTIFY THE EXTENT TO WHICH THIS AGREEMENT HAS GENERATED BUSINESS OR COMMISSION EXPENSE DURING THE PERIODS PRESENTED.

In response to the SEC's comment, we have revised our disclosure on page 31 (and elsewhere, as applicable) to clarify the material terms of the Business Commission Agreement with Robinpaws, LLC, both before and after the January 2025 amendment.

Specifically, we disclose that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Under the original agreement, effective December 21, 2023, Robinpaws referred new business clients to Favo Capital and received a fixed base payment and commissions on funded transactions. The commissions included tiered rates for new business, as well as flat rate commissions on renewals of the acquired book of business, externally funded business, and lender bonuses.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ In January 2025, the agreement was amended, to modify the renewal commission structure and reduce certain other payments. Renewals that met specific criteria (e.g., same lender payoff, LOC financing, equipment financing, collateral-based funding, or single position payoff) remained eligible for the flat rate commission. Renewals outside these categories were reclassified as "new business" and paid at the tiered commission rates. In addition, commissions on lender bonuses and other financial rewards were reduced from 50% to 30%.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Commissions under both the original agreement and the amendment remain structured as a percentage of the funded amount, subject to the applicable tiers and criteria.

At present, the Company is not able to provide a meaningful quantification of the extent to which this agreement has generated business volume during the periods presented. The business referred under the agreement has not represented a material portion of our overall origination or commission expense to date. We will continue to monitor the impact of this arrangement and, if it becomes material in future periods, we will provide the Staff with appropriate quantified disclosure.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. PLEASE REVISE YOUR DISCLOSURE HERE TO ADDRESS THE ITEMS BELOW.

PLEASE CLARIFY WHETHER THE COMPANY IS CURRENTLY PRIMARILY ENGAGED IN THE ACQUISITION, EXPLORATION, AND DEVELOPMENT OF MINING PROPERTIES.

In response to this comment, the Company is not currently engaged in the acquisition, exploration, and development of mining properties. The Company was in that business from 2006 until about 2014 when the Company ceased reporting with the SEC.

PLEASE DESCRIBE HERE, AND ELSEWHERE AS APPROPRIATE, YOUR RELATIONSHIP WITH CUSTODIAN VENTURES, LLC AND ITS CURRENT STATUS. FOR EXAMPLE, WE NOTE THAT THE DISTRICT COURT OF NEVADA APPOINTED CUSTODIAN VENTURES, LLC AS CUSTODIAN FOR BEESTON ENTERPRISES LTD. PLEASE DISCLOSE THE NATURE OF THE CIRCUMSTANCES LEADING TO THE APPOINTMENT OF A CUSTODIAN FOR BEESTON ENTERPRISES, LTD., AND ANY MATERIAL EFFECTS ON YOUR BUSINESS.

In response to this comment, the Company has no relationship with Custodian Ventures, LLC. According to the petition filed by Custodian Ventures, LLC on August 28, 2018, and the state court in Nevada that granted the petition, Section 78.347(1) of the Nevada Revised Statutes provides that: any stockholder may apply to the district court to appoint one or more persons to be custodians of the corporation ... when the corporation has abandoned its business and has failed within a reasonable time to take steps to dissolve, liquidate or distribute its assets in accordance with Chapter 78 of the Nevada Revised Statutes.

The Declaration of David Lazar, Manager of Petitioner Custodian Ventures, LLC states that Petitioner must make reasonable efforts to contact the officers and directors of the abandoned corporation to demand that they comply with Chapter 78 of the Nevada Revised Statutes. See NRS 78.347(2)(e) and NRS 78.347 (2)(f). To that end, Petitioner diligently investigated the company to identify all past and current available contact information for the officers and directors of BEESTON ENTERPRISES LTD. Multiple attempts to contact the officers and directors were made via U.S. Mail and telephone. These efforts failed and the officers and directors have failed to reinstate BEESTON ENTERPRISES LTD. or schedule a shareholders meeting.

WE NOTE THE STATEMENT THAT ON OCTOBER 29, 2018, YOU "TERMINATED" ITS REGISTRATION STATEMENT WITH THE SECURITIES AND EXCHANGE COMMISSION. PLEASE PROVIDE CLARIFYING DETAILS AS TO WHOSE REGISTRATION STATEMENT WAS TERMINATED.

In response to this comment, on March 5, 2003, the Company filed an SB-2 registration statement. On October 29, 2018, the Company filed a Form 15 with the Securities and Exchange Commission to suspend its Section 15(d) reporting obligations under the Exchange Act.

**BECAUSE WE HAVE A LIMITED OPERATING HISTORY, YOU MAY NOT BE ABLE TO ACCURATELY EVALUATE OUR OPERATIONS, PAGE 17**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. WE NOTE YOUR DISCLOSURE THAT YOU HAVE HAD LIMITED OPERATIONS TO DATE. PLEASE REVISE HERE AND IN CORPORATE HISTORY AND DESCRIPTION OF BUSINESS TO MINIMIZE THE DISCUSSION OF PRE-2018 CORPORATE HISTORY TO THE EXTENT UNNECESSARY TO UNDERSTAND YOUR CURRENT OPERATIONS, AND CLARIFY HOW LONG YOU HAVE OPERATED WITHIN YOUR CURRENT BUSINESS LINE.

In response to this comment, the Company revised its registration statement to minimize the discussion of its pre-2018 corporate history and clarified that it has been in the business as a private credit company since September 2020 providing alternative financing solutions to small and medium-sized businesses (SMBs) across the United States.

**OUR GROWTH MAY NOT BE SUSTAINABLE, PAGE 17**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. WE NOTE THE REFERENCE TO YOUR "SYNDICATION PARTNERS" HERE AND TO YOUR "SYNDICATION PARTNERSHIPS" ON PAGE 48. PLEASE REVISE THESE AND SIMILAR REFERENCES TO FURTHER CLARIFY THE SYNDICATION ENTITIES AND THE NATURE AND TERMS OF THEIR RELATIONSHIPS WITH YOU. FOR EXAMPLE, APPROXIMATELY HOW MANY ARE THERE? WHAT IS THE NATURE OF THEIR BUSINESS?

In response to this comment, the Company has revised its disclosure in the "Business" section (see MCA – Syndication Partners) to further clarify the nature and terms of its syndication relationships.

Specifically, we now disclose that the Company currently maintains relationships with six syndication partners, comprised of three core partners and three secondary partners. Each of these partners operates in the same business line as FAVO Capital, namely revenue-based financing and the origination and funding of merchant cash advances (MCAs) and Purchase Receivable Financing (PRF) products.

We also disclose that syndication participation amounts generally range from 10% to 95% of an approved transaction's value. These arrangements are governed by Master Participation Agreements and Independent Sales Organization agreements, which define the terms of engagement, including origination, funding, servicing, and collections. FAVO Capital provides these services both on its own behalf and on behalf of its syndication partners.

To address portfolio concentration risk, we have included disclosure that the Company does not participate in any syndication arrangement where its exposure exceeds 40% of a partner's total portfolio. In addition, all syndication partners are provided with investment guidelines aligned with the Company's internal underwriting standards, and they are required to adhere to these guidelines to ensure consistency and risk alignment across all investments.

The Company believes that these revisions provide greater transparency regarding the number of syndication partners, the nature of their business, the typical range of syndication participation amounts, and the contractual framework governing these relationships.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14. WE NOTE THE REFERENCE TO EXPERIENCING "CUSTOMER TURNOVER." PLEASE REVISE HERE AND WHERE APPROPRIATE TO QUANTIFY YOUR APPROXIMATE CHURN RATE.

In response to this comment, the Company has revised its disclosure to quantify its customer turnover. The revised disclosure now states that approximately 30% to 40% of the Company's direct portfolio customers have multiple fundings. This disclosure reflects the Company's approximate churn rate, as a substantial portion of SMB customers may not return for repeat financings due to the inherent risks faced by smaller businesses, including economic volatility, inflationary pressures, changes in consumer spending, and rising interest rates. The Company believes this revision provides the requested quantification of customer turnover and clarifies the extent to which the Company experiences customer churn within its direct portfolio.

**WE ARE SUBJECT TO RISKS RELATING TO THE AVAILABILITY OF CAPITAL, PAGE 18**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15. PLEASE REVISE TO IDENTIFY THE "CERTAIN THIRD-PARTY PARTNERS."

In response to the Staff's comment, the Company has revised its risk factor disclosure (captioned "We are subject to risks relating to the availability of capital") to clarify the reference to "certain third-party partners." The revised disclosure now identifies these third-party partners as the Company's syndication partners, comprised of six entities (three core partners and three secondary partners), all of which operate within the merchant cash advance (MCA) and revenue-based financing industry.

The revised disclosure explains that, while the Company directly originates, underwrites, and funds MCAs through its own resources for direct fundings, it also participates in syndicated fundings where it is dependent upon syndication partners and the designated lead funder to operationalize and provide capital for merchant advances. The disclosure further notes that syndication participation amounts typically range from 10% to 95% of the transaction value, and that these arrangements are governed by Master Participation Agreements and related agreements.

The Company believes these revisions address the Staff's comment by clearly identifying the nature of the third-party partners, the role they play in syndicated fundings, and the potential risks to the Company's operations if capital from these partners is not available.

**MERCHANT CASH ADVANCE BUSINESSES MAY BE UNABLE TO COLLECT CASH ADVANCE INCOME, PAGE 19**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16. PLEASE REVISE THIS RISK FACTOR TO PLACE THE RISK INTO CONTEXT. DESCRIBE WHO YOUR DEBTORS ARE AND DEFINE MERCHANT CASH ADVANCE BUSINESSES. DISCLOSE WHERE YOUR BUSINESS FALLS WITHIN THE DESCRIBED PROCESS AND RISK. THE REVISED DESCRIPTIONS OF YOUR DEBTORS AND CASH ADVANCE BUSINESS SHOULD ALIGN WITH THE TERMS AND DESCRIPTIONS USED IN THE SUMMARY, BUSINESS AND OTHER SECTIONS OF THE PROSPECTUS.

In response to this comment, the Company has revised the risk factor to provide additional context regarding the Company's debtors, to define merchant cash advance ("MCA") businesses, and to explain the Company's role within the MCA process.

As revised, the disclosure now clarifies that MCA businesses, such as FAVO Capital, provide revenue-based financing to small and medium-sized businesses ("SMBs") by purchasing a portion of their future receipts at a discount. The disclosure further explains that the Company's debtors are primarily SMBs in industries such as restaurants, construction, physical fitness and accounting services, which use cash advances for working capital, inventory purchases, marketing, and other liquidity needs. The Company has also added language to note that it collects remittances through Automated Clearing House ("ACH") debits or credit card split processing, and that, as a non-bank, it relies on FDIC-insured depository institutions and payment processors for these functions.

Finally, the disclosure has been updated to specify that the Company originates and underwrites advances directly, services and collects those advances through its processing partners, and in the case of syndicated fundings, manages collections on behalf of both itself and its syndication partners. These revisions are intended to provide a complete description of the Company's business and risk profile in alignment with the Summary, Business, and other sections of the prospectus.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17. WE STORE PERSONAL AND OTHER INFORMATION OF OUR PARTNERS, PAGE 27 WE NOTE YOUR DISCLOSURE ON PAGE 28 THAT SIMILAR U.S. STATE LAWS WILL BE GOING INTO EFFECT IN 2024. PLEASE UPDATE YOUR DISCLOSURE OF THE CURRENT STATUS OF U.S. STATE LAWS AS OF THE MOST RECENT PRACTICABLE DATE.

In response to this comment, the Company updated its registration statement to include the most recent data on States' privacy laws.

**USE OF PROCEEDS, PAGE 44**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18. IF ANY MATERIAL PART OF THE PROCEEDS IS TO BE USED TO DISCHARGE INDEBTEDNESS, PLEASE DISCLOSE THE INTEREST RATE AND MATURITY OF SUCH INDEBTEDNESS AND, IF SUCH INDEBTEDNESS WAS INCURRED WITHIN ONE YEAR, DESCRIBE THE USE OF PROCEEDS OF SUCH INDEBTEDNESS OTHER THAN SHORT-TERM BORROWINGS USED FOR WORKING CAPITAL. IN THIS REGARD, WE NOTE YOUR DISCLOSURE THAT A PRIMARY OBJECTIVE OF THIS OFFERING IS TO SIGNIFICANTLY REDUCE YOUR OUTSTANDING DEBT AND THAT YOU INTEND TO ALLOCATE APPROXIMATELY $15 MILLION FROM IPO PROCEEDS TOWARDS DEBT REPAYMENT, AS WELL AS YOUR DISCLOSURE ON PAGE 53 THAT YOU CURRENTLY HOLD APPROXIMATELY $36.4 MILLION IN DEBT NOTES WITH PLANS TO REPAY OR REFINANCE A SUBSTANTIAL PORTION USING PROCEEDS FROM THE IPO AND SUBSEQUENT EQUITY OFFERINGS.

In response to this comment, the Company has revised its disclosure in the Use of Proceeds section of the registration statement to provide additional detail regarding the indebtedness to be repaid. Specifically, as of the date of this filing, the Company has approximately $30.0 million of outstanding indebtedness bearing an effective annual interest rate of approximately 15%, with a contractual maturity in June 2026.

We intend to use approximately $10.0 million of the net proceeds from this offering to repay a portion of such indebtedness. These borrowings were not incurred within the past year, other than short-term borrowings used for working capital purposes, and were originally undertaken to support general corporate purposes and growth of the Company's merchant cash advance business. The partial repayment will reduce our aggregate indebtedness by roughly one-third, resulting in immediate savings in interest expense, enhancing free cash flow, and strengthening the Company's overall capital structure.

**DESCRIPTION OF THE BUSINESS, PAGE 46**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19. WE NOTE YOUR DISCLOSURE ON PAGES 3 AND 46 THAT YOUR FOCUS AREAS ARE MERCHANT CASH ADVANCES ("MCAS"), PURCHASES OF FUTURE RECEIPTS ("PFRS"), LINES OF CREDIT, ASSET- BACKED LOANS, AND SBA LOANS. WE ALSO NOTE YOUR DISCLOSURE ON PAGES F-6 AND F-25 THAT YOU HAVE TWO DIVISIONS: THE MCA DIVISION AND THE REAL ESTATE HOLDINGS DIVISION. DISCLOSURES ELSEWHERE, SUCH AS ON PAGES 8, 17, AND 31, INDICATE THAT YOU DO NOT CURRENTLY HAVE A REAL ESTATE PORTFOLIO OR ANY SPECIFIC TARGETS FOR ACQUISITION OR SALE AT THIS TIME. PLEASE REVISE YOUR DISCLOSURES THROUGHOUT THE DOCUMENT TO MORE CLEARLY AND CONSISTENTLY EXPLAIN THE EXTENT TO WHICH YOU HAVE ENGAGED IN EACH OF THESE KEY OFFERINGS (I.E., MCAS, PFRS, LINES OF CREDIT, ASSET-BACKED LOANS, SBA LOANS AND REAL ESTATE HOLDINGS) DURING THE PERIODS PRESENTED VERSUS THE EXTENT TO WHICH YOUR ENGAGEMENT IN THESE OFFERINGS ARE CURRENTLY ONLY PART OF YOUR FUTURE PLANS. TO THE EXTENT THAT YOU HAVE INCURRED MATERIAL COSTS RELATED TO THE IMPLEMENTATION OF THESE KEY OFFERINGS DURING THE PERIODS PRESENTED, PLEASE EXPLAIN AND QUANTIFY SUCH COSTS IN AN APPROPRIATE LOCATION, SUCH AS WITHIN MD&A.

In response to the comment, we have revised our disclosure throughout the prospectus to clarify the scope of our activities outside of our merchant cash advance business. Specifically:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ We have changed the heading "Other Funding Options" to "Brokering Activities" to more accurately describe this line of business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ We have clarified that we do not originate or fund these additional products directly on balance sheet. Instead, we act as a broker or lead source by connecting small and medium-sized businesses ("SMBs") to third-party lenders, including banks, credit unions, SBA-approved institutions, factoring companies, and other funders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ We have revised the text to explicitly state that our revenues in this area are derived from commissions paid by funders when we deliver qualified borrowers, and not from interest, fees, or other income generated from the underlying financial products themselves.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ We have further clarified that these brokering activities accounted for approximately 20% of our total revenues during the periods presented, with the balance primarily attributable to direct and syndicated MCA activities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20. WE NOTE YOUR DISCLOSURE ON PAGES 3 AND 46 DESCRIBING YOUR KEY OFFERINGS, INCLUDING MCAS AND PFRS. WE ALSO NOTE YOUR DISCLOSURE ON PAGES 55 AND F-7 THAT YOUR MAIN SOURCE OF REVENUE IS THROUGH AGREEMENTS FOR THE PURCHASE AND SALE OF FUTURE RECEIVABLES/RECEIPTS, COMMONLY REFERRED TO AS AN MCA. GIVEN THE SIGNIFICANT OVERLAP IN THE DESCRIPTION OF THESE TWO KEY OFFERINGS, PLEASE REVISE YOUR DISCLOSURES TO BETTER DIFFERENTIATE BETWEEN MCAS AND PFRS AND TO QUANTIFY THE AMOUNT OF ORIGINATIONS ATTRIBUTED TO EACH OF THESE OFFERINGS FOR EACH PERIOD PRESENTED.

In response to the comment, the Company has revised its disclosure throughout the Registration Statement to remove all references to "Purchases of Future Receipts" ("PFRs") and "Agreements for the Purchase and Sale of Future Receivables/Receipts." The Company now consistently refers only to merchant cash advances ("MCAs") as its key product offering.

The prior references to PFRs were duplicative of our MCA disclosures, as both terms historically described the same underlying product structure. To avoid confusion and to present a clear and consistent description of our business, we have streamlined the disclosure to use MCA as the single defined term.

Accordingly:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ References to PFRs have been removed or conformed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ The Company's disclosure now states that our main source of revenue is through MCAs, and we have clarified that all originations presented in the Registration Statement relate to MCA transactions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Because the Company no longer distinguishes PFRs as a separate product, there is no quantification of originations by product type; instead, the origination data disclosed relates solely to MCA activity.

We respectfully submit that these revisions resolve the Staff's comment by eliminating duplicative product descriptions and presenting a consistent, accurate picture of our business operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21. WE NOTE YOUR DISCLOSURE THAT YOUR UNDERWRITING MODEL USES ANALYTICS, AUTOMATION, AND ALTERNATIVE DATA SOURCES TO ASSESS BUSINESS CREDITWORTHINESS, AS WELL AS YOUR DISCLOSURE ON PAGE 17 THAT MANY OF YOUR MERCHANT CUSTOMERS ARE IN THE ENTREPRENEURIAL STAGE OF THEIR DEVELOPMENT. PLEASE ENHANCE YOUR DISCLOSURES HERE AND/OR ELSEWHERE, AS APPROPRIATE, TO PROVIDE MORE DETAIL REGARDING HOW YOU ASSESS CREDITWORTHINESS AND EXAMPLES OF ALTERNATIVE DATA SOURCES.

In response to this comment, the Company has revised the disclosure to provide additional detail regarding how we assess merchant creditworthiness and the alternative data sources used in our underwriting process.

Specifically, the revised disclosure now clarifies that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Artificial intelligence and automation are integrated into our underwriting workflow to detect anomalies in application data and bank records, authenticate and normalize submitted bank statements, and identify potential fraud or misrepresentation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ These technologies also automate initial screening against industry risk thresholds, repayment trends, and debt service coverage ratios, while enabling pattern recognition by comparing applicants to prior cases with similar repayment histories.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Our alternative data sources include government and public records (e.g., Secretary of State filings, tax records, court filings), third-party credit bureaus (e.g., Experian, Equifax, TransUnion, Dun & Bradstreet), service provider references, landlord information, and background check platforms such as TLO and Clear. We also review applicants' digital footprint—including website presence, customer reviews, and activity on platforms such as Google and Facebook—as part of our credit assessment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ We give greater weight to the demonstrated financial performance of the business than to the owner's individual credit scores, reflecting our focus on small and medium-sized businesses that may not otherwise qualify for conventional bank loans.

These enhancements are intended to provide greater transparency into the Company's underwriting practices and align with the Staff's request for expanded disclosure regarding the use of analytics, automation, and alternative data sources in assessing the creditworthiness of our merchant customers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22. PLEASE FURTHER DESCRIBE YOUR UNDERWRITING MODEL AND PROCESS, AND WHERE THIS PROCESS FITS WITHIN YOUR OVERALL BUSINESS STRUCTURE. DESCRIBE ANY KEY RELATIONSHIPS WITH OUTSIDE OR THIRD-PARTY PROVIDERS THAT ARE NECESSARY FOR YOUR UNDERWRITING PROCESS. DESCRIBE WHAT MAKES YOUR UNDERWRITING PROCESS "STREAMLINED" AND EXPLAIN THE BASIS FOR YOUR STATEMENT THAT YOUR STREAMLINED UNDERWRITING PROCESS ALLOWS YOU TO APPROVE AND FUND DEALS FASTER THAN MANY TRADITIONAL LENDERS. ADDITIONALLY, CONSIDER RELEVANT RISK FACTOR DISCLOSURE REGARDING RELATED MATERIAL RISKS TO YOUR BUSINESS OR OPERATIONS. IN THIS REGARD, WE NOTE YOUR RISK FACTOR ON PAGE 18 THAT YOU ARE SUBJECT TO RISKS RELATING TO THE ABILITY OF YOUR CUSTOMERS TO GENERATE SALES TO REMIT RECEIVABLES, AS WELL AS YOUR RISK FACTOR ON PAGE 21 THAT YOU OFTEN INTERACT WITH PRIVATELY HELD COMPANIES ABOUT WHICH VERY LITTLE PUBLIC INFORMATION EXISTS.

In response to this comment, the Company has revised its disclosure to expand our description of our underwriting model and process. These include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ We now provide a detailed description of our four-step underwriting framework, which incorporates both automated data analysis and human review.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ We have added disclosure explaining how our underwriting process fits into our overall business operations as the central function for originating and syndicating merchant cash advances.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ We have identified the key third-party providers we rely upon for data aggregation, document authentication, and fraud detection, including MoneyThumb and Ocrolus, and we have explained their role in our underwriting process.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ We have expanded our disclosure to clarify what makes our underwriting process "streamlined," including the use of AI-based anomaly detection, automated bank-data aggregation, and reduced documentation requirements, which allow us to typically approve and fund transactions within 24–72 hours compared to weeks for traditional bank loans.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ We have updated the description of our risk factors to align with these disclosures, including:

o Enhancing our risk factor on underwriting and capital availability to note that disruptions or inaccuracies in automated or third-party data services could materially impair our ability to evaluate applicants and manage fraud risk.

o Expanding our risk factor concerning privately held SMBs with limited public information to note that, while we mitigate these risks with AI-driven and third-party tools, reliance on these tools and merchant-provided data carries its own risks, including the possibility of manipulation, inaccuracies, or service interruptions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23. FOR EACH OF YOUR KEY OFFERINGS, DISCLOSE HOW YOU GENERATE REVENUE FROM EACH OFFERING AND DESCRIBE ANY RELATED AGREEMENTS AND KEY TERMS OF SUCH AGREEMENTS. DESCRIBE YOUR PRIMARY DISTRIBUTION METHODS AND, IF APPLICABLE, DISCLOSE ANY DEPENDENCE ON ONE OR A FEW MAJOR CUSTOMERS, AND INCLUDE RELATED RISK FACTOR DISCLOSURE.

In response to this comment, the Company respectfully acknowledges the comment and has revised the disclosure to provide further detail regarding each of its key offerings, including how revenue is generated, the related agreements and their key terms, the Company's primary distribution methods, and any dependence on significant customers.

Merchant Cash Advances (MCAs)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Revenue Model: We generate revenue from MCAs primarily through factor rates applied to the purchase of future receipts. These receipts are remitted by merchants via daily or weekly automated debits until the purchased amount is satisfied.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Related Agreements: Each MCA is documented by a standardized purchase and sale agreement, which sets forth the advance amount, purchased receipts amount, remittance schedule, and factor rate. In syndicated MCA transactions, we act as servicer under syndication agreements, earning servicing fees, retained participations, and profit allocations. Syndication agreements generally provide that we manage collections and distribute remittances, with servicing compensation paid on a priority basis.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Distribution: Applications are sourced through direct marketing, referrals, industry partnerships, and independent sales organizations (ISOs). ISOs submit merchant applications under broker agreements, which typically provide for referral compensation based on funded amounts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Customer Dependence: Our MCA activities are diversified across a large number of small and medium-sized businesses. We are not dependent on any single merchant or a small group of merchants, and no individual customer accounts for a material portion of our MCA revenues.

Real Estate Activities

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Revenue Model: Our real estate strategy contemplates generating revenue from both (i) recurring rental income from residential and commercial leases and (ii) the marketing and sale of condominium units. At present, our revenues are derived exclusively from rental income, which is generated under tenant lease agreements providing for monthly rental payments, security deposits, and customary landlord protections. While the marketing and sale of condominium units remain part of our long-term strategy, no condominium sales have been completed to date, and no revenue has been recognized from condominium transactions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Related Agreements: Condominium sales are governed by purchase and sale agreements, which specify purchase price, deposit terms, and closing conditions. Leasing agreements provide for rental rates, term lengths, renewal options, and maintenance obligations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Distribution: We market real estate opportunities through broker networks, digital and traditional advertising campaigns, referral programs, and on-site promotional activities targeted at potential tenants and condominium buyers. We also establish relationships with co-investors and developers through joint venture or co-investment agreements to support certain projects.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Customer Dependence: While real estate revenues are more concentrated by project compared to MCAs, we maintain a diversified base of tenants and buyers across developments. We are not dependent on any single tenant, buyer, or co-investor for our real estate activities.

Related Risk Factor Disclosure: We have also revised and expanded our risk factor disclosures in the amended Registration Statement to address the risks associated with reliance on syndication partners, ISOs, and marketing strategies for real estate activities, as well as the risks of customer concentration in real estate projects.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;24. WE NOTE YOUR REFERENCE TO YOUR NETWORK OF FUNDING PARTNERS. PLEASE REVISE YOUR DISCLOSURE TO DESCRIBE HOW YOU SOURCE CAPITAL, YOUR NETWORK OF FUNDING PARTNERS, THE ARRANGEMENTS GOVERNING YOUR RELATIONSHIP WITH THESE FUNDING PARTNERS, AND ANY SIGNIFICANT CONCENTRATIONS IN YOUR FUNDING PARTNERS, INCLUDING RELATED RISK FACTOR DISCLOSURE IF APPLICABLE.

In response to this comment, the Company respectfully advises the SEC that the "funding partners" referenced in our prior disclosure refers specifically to syndication partners that co-fund merchant cash advances ("MCAs") alongside us.

We have revised our disclosure in the "Business" section of the Registration Statement to clarify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ We fund MCAs through a combination of our own capital and contributions from syndication partners.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ In syndicated transactions, we act as servicer under syndication agreements, earning servicing fees, retained participations, and profit allocations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Syndication agreements generally provide that we manage collections, distribute remittances, and receive priority servicing compensation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ While we maintain a broad network of syndication partners, our revenues from syndicated transactions are not materially dependent on any single partner or small group of partners.

We have also included risk factor disclosure under "Dependence on Syndication Partners and Agreements" to highlight risks associated with potential reductions in participation, terminations, or adverse changes in syndication arrangements.

**BUSINESS MODEL & REVENUE GENERATION, PAGE 47**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;25. WE NOTE THAT YOU PROVIDE MERCHANT CASH ADVANCES THROUGH DIRECT AND SYNDICATED ARRANGEMENTS. PLEASE REVISE YOUR DISCLOSURES HERE AND/OR ELSEWHERE, AS APPROPRIATE, TO ADDRESS THE ITEMS BELOW.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ EXPLAIN MORE FULLY ANY DIFFERENCES BETWEEN SYNDICATED AND DIRECT ARRANGEMENTS AND PROCESSES.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ SEPARATELY QUANTIFY THE ORIGINATIONS FUNDED THROUGH THE DIRECT FUNDING MODEL AND THROUGH THE SYNDICATED FUNDING PLATFORM FOR EACH PERIOD PRESENTED.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ DISCLOSE THE TYPICAL CONTRACTUAL TERMS FOR BOTH DIRECT AND SYNDICATED ORIGINATIONS.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ DISCUSS WHAT FEES ARE RECEIVED UNDER EACH TYPE OF ARRANGEMENT, WHEN THESE FEES ARE PAID (E.G., AT THE TIME OF ORIGINATION, AT CONTRACT EXECUTION, OVER A SPECIFIED TIME PERIOD, ETC.), AND WHO PAYS THEM.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ EXPLAIN WHEN THE ANCILLARY FEES YOU NOTE ON PAGE 47 APPLY.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ SEPARATELY DESCRIBE THE REPAYMENT PROCESSES FOR BOTH DIRECT AND SYNDICATED ORIGINATIONS.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ DISCLOSE WHETHER THERE IS ANY RECOURSE AVAILABLE TO SYNDICATION PARTNERS AGAINST YOU FOR MERCHANT DELINQUENCIES OR DEFAULTS.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ FOR EACH TYPE OF TRANSACTION, CLARIFY WHEN SALES COMMISSIONS BECOME PAYABLE AND HOW SUCH AMOUNTS ARE CALCULATED.

In response to this comment, the Company has revised its disclosure in the "Business" section of the Registration Statement to provide greater detail regarding its direct and syndicated MCA arrangements. Specifically:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Differences Between Syndicated and Direct Arrangements: We have added a table comparing key aspects of direct and syndicated funding, including definitions, revenue models, capital deployment, risk exposure, underwriting, funding scale, administration, economic participation, speed of execution, and contract structures. The revised disclosure clarifies that in direct fundings, the Company provides the entire advance from its own capital and assumes 100% exposure, while syndicated fundings involve multiple parties pooling capital under Master Participation Agreements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Quantification of Originations: We have included a table quantifying originations funded through direct and syndicated models for the years ended December 31, 2023 and 2024, and the six months ended June 30, 2025. The table shows total funding volumes of $34.6 million in 2023 ($17.3 million direct, $17.4 million syndicated), $31.0 million in 2024 ($13.0 million direct, $18.0 million syndicated), and $15.6 million in the first half of 2025 ($5.9 million direct, $9.8 million syndicated).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Typical Contractual Terms: We have disclosed that MCA agreements for both direct and syndicated originations typically include the advance amount, purchased receipts amount, remittance schedule (daily or weekly ACH debits), and factor rate. Syndicated terms are governed by additional Master Participation Agreements outlining participation levels, servicing authority, and profit-sharing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Fees Received: For direct fundings, we earn origination fees, administrative fees, MCA income, and ancillary fees (e.g., NSF, collections, UCC filings), recognized over the contract term. For syndicated fundings, we earn proportionate MCA income, servicing/collection fees as lead funder, and rebates based on portfolio performance. Fees are typically deducted from remittances or paid on a priority basis.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Ancillary Fees: We have clarified that ancillary fees apply for NSF charges, collections efforts, UCC filings, and other administrative costs incurred during servicing, and are recognized as incurred.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Repayment Processes: For both models, repayments occur via daily/weekly ACH debits or credit card splits. In direct fundings, we manage collections directly; in syndicated, we administer as lead servicer and distribute proceeds pro rata.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Recourse to Syndication Partners: We have disclosed that most syndicated MCAs are non-recourse, with losses borne pro rata among participants, except in cases of mismanagement or breach.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Sales Commissions: Commissions are payable upon funding and calculated as a percentage of the funded amount. For direct, commissions go to internal sales; for syndicated, they may be shared with originating partners.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;26. WE NOTE YOUR DISCLOSURE ON PAGE 18 THAT YOU ARE DEPENDENT ON CERTAIN THIRD-PARTY PARTNERS TO OPERATIONALIZE MERCHANT CASH ADVANCES. DESCRIBE HOW YOU OPERATIONALIZE MERCHANT CASH ADVANCES, AS WELL AS THE NATURE OF YOUR DEPENDENCE ON CERTAIN THIRD-PARTY PARTNERS. DESCRIBE THE KEY TERMS OF YOUR ARRANGEMENTS WITH YOUR THIRD-PARTY PARTNERS AND THE NATURE OF YOUR DEPENDENCE ON CERTAIN THIRD-PARTY PARTNERS. DESCRIBE THE KEY TERMS OF YOUR ARRANGEMENTS WITH YOUR THIRD-PARTY PARTNERS AND FILE RELATED AGREEMENTS AS EXHIBITS OR TELL US WHY THESE DO NOT NEED TO BE FILED.

In response to this comment, the Company has revised its disclosure (risk factor captioned "We are subject to risks relating to the availability of capital") and in the "Business" section of the Registration Statement to clarify how we operationalize merchant cash advances ("MCAs") and the nature of our dependence on third-party partners. As revised, the disclosure now explains that we operationalize MCAs through a four-step process: (i) origination and application intake, (ii) underwriting and credit assessment, (iii) funding and disbursement, and (iv) servicing and collections. We rely on third-party partners—specifically our syndication partners and Independent Sales Organizations ("ISOs")—for capital co-funding in syndicated transactions and for merchant referrals, respectively.

We have also described the key terms of our arrangements with these partners:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Syndication Partners: Governed by Master Participation Agreements, which outline participation levels (typically 10%–95% of transaction value), servicing responsibilities (including collections and remittances), profit-sharing mechanics, and risk allocation (generally non-recourse, with losses borne pro rata). We do not file these agreements as exhibits because they are standard commercial agreements entered into in the ordinary course of business and do not meet the materiality thresholds under Item 601(b)(10) of Regulation S-K.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ ISOs: Governed by broker agreements providing for referral compensation (typically a percentage of the funded amount) upon closing. These are also ordinary course agreements that do not require filing under Item 601(b)(10).Our dependence on these partners is limited: syndicated funding provides capital efficiency but is not essential, as we can originate directly; ISOs account for a significant but non-majority portion of originations. Disruptions could increase costs or reduce volume but would not halt operations.

**EMPLOYEES, PAGE 49**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;27. WE NOTE AN ARTICLE DISCUSSING A WORKFORCE OF "OVER 120 PROFESSIONALS ACROSS FIVE GLOBAL OFFICES." PLEASE RECONCILE WITH THE DISCLOSURE THAT YOU HAVE OFFICES IN NEW YORK, FLORIDA AND DOMINICAN REPUBLIC.

In response to this comment, the Company has revised its disclosure to clarify that it employs 134 professionals across offices in New York, Florida, and two locations in the Dominican Republic (Bonao and La Vega), as well as its recently acquired mixed-use property in Hollywood, Florida (1818 Park). The prior reference to "five global offices" in external articles was inaccurate and has been corrected in our communications. The Company does not maintain five separate offices; rather, its workforce is distributed across these key operational sites.

**MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, PAGE 49**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;28. PLEASE REVISE TO INCLUDE A DISCUSSION OF FINANCIAL CONDITION AND MATERIAL CHANGES IN FINANCIAL CONDITION FOR EACH OF THE PERIODS PRESENTED, INCLUDING A DESCRIPTION OF UNDERLYING REASONS FOR MATERIAL CHANGES IN BOTH QUANTITATIVE AND QUALITATIVE TERMS. PLEASE REFER TO ITEM 11(H) OF INSTRUCTIONS TO FORM S-1 AND ITEM 303 OF REGULATION S- K.

In response to this comment, the Company has revised its MD&A to include a dedicated section discussing its financial condition and material changes thereto for the years ended December 31, 2023 and 2024, and the six months ended June 30, 2025 (compared to June 30, 2024). The revised disclosure provides both quantitative and qualitative analysis of key balance sheet changes, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Current Assets: Increases in cash equivalents and advance receivables driven by expanded MCA originations and the Simplified Acquisition, partially offset by higher allowances for credit losses due to portfolio growth.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Non-Current Assets: Addition of $1.2 million in goodwill and $0.7 million in intangible assets from the Simplified Acquisition, as well as the $190 million 1818 Park real estate acquisition in July 2025 (post-period, but material to understanding subsequent condition).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Current Liabilities: Fluctuations in syndicate payables and accrued liabilities reflecting syndication activity and operational scaling.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Non-Current Liabilities: Increases in notes payable to fund growth, with $30.0 million outstanding at approximately 15% interest as of the latest practicable date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Stockholders' Deficit: Widening deficit due to accumulated losses, partially offset by equity issuances (e.g., Series A preferred stock) and the 1818 Park acquisition.

**RESULTS OF OPERATIONS** 

**REVENUE, PAGE 50**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;29. PLEASE ENHANCE YOUR DISCLOSURES HERE, AND ON PAGE 52, TO MORE FULSOMELY EXPLAIN HOW THE KEY DRIVERS OF REVENUE AND COST OF REVENUE RELATE TO THE PERIOD-OVER-PERIOD CHANGES. FOR EXAMPLE, ENHANCE YOUR DISCLOSURE TO BETTER DESCRIBE HOW YOU DETERMINED WHICH SYNDICATION PARTNERS ARE LESS PROFITABLE AND THE SHIFT IN FOCUS FROM SYNDICATED DEALS TO DIRECTLY FUNDED DEALS AND THE DECISION TO STOP SYNDICATING WITH LESS PROFITABLE SYNDICATION PARTNERS CORRELATES TO THE DECREASE IN REVENUE. IN ADDITION, REVISE YOUR DISCLOSURE TO CLARIFY THE EXTENT TO WHICH THE DECREASE IN COST OF REVENUE IS ASSOCIATED WITH VOLUME VERSUS FEE RATE CHANGES. TO THE EXTENT THAT FEE RATES CHANGED, PLEASE QUANTIFY THE CHANGE (E.G., DISCLOSE THE CHANGE IN AVERAGE FEE RATE) AND EXPLAIN THE UNDERLYING DRIVERS.

In response to this comment, the Company has enhanced its MD&A disclosures for both annual and interim periods to more fully explain the key drivers of revenue and cost of revenue changes. Specifically:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Revenue Drivers: We now specifically mention the growth in revenue from the Simplified acquisition as well as highlighting the changes in Direct and Syndicated revenue.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Cost of Revenue: We clarify that the decrease was driven by lower volumes (fewer syndicated deals) vs fee rate reductions as well as highlighting the other areas which have impacted cost of revenue.

**OPERATING EXPENSES, PAGE 51**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;30. WE NOTE YOUR DISCLOSURES REGARDING OPERATING EXPENSES HERE AND, FOR INTERIM PERIODS, ON PAGE 52. TO IMPROVE INVESTOR UNDERSTANDING OF YOUR RESULTS OF OPERATIONS, PLEASE ENHANCE YOUR DISCLOSURES TO ADDRESS THE ITEMS BELOW.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ SEPARATELY QUANTIFY ANY MATERIAL COMPONENTS OF G&A EXPENSES FOR EACH OF THE PERIODS PRESENTED AND ENSURE THAT THE ACCOMPANYING NARRATIVE ADDRESSES THE KEY DRIVERS OF THE PERIOD-OVER-PERIOD CHANGE FOR EACH COMPONENT.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ CLARIFY HOW UNDERWRITING IMPROVED DURING 2023 AND WHY A SHIFT TO DIRECT FUNDING RESULTED IN A LOWER BAD DEBT ALLOWANCE FOR CREDIT LOSSES.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ EXPLAIN MORE FULLY HOW THE ACQUISITION OF THE FAVO GROUP OF COMPANIES DROVE AN INCREASE IN THE BAD DEBT ALLOWANCE FOR CREDIT LOSSES.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ DISCUSS HERE OR IN ANOTHER APPROPRIATE LOCATION YOUR CHARGE-OFF LEVELS, TRENDS, CHANGES, AND RELATED DRIVERS FOR THE PERIODS PRESENTED.

In response to this comment, the Company has enhanced its MD&A disclosures for operating expenses in both annual and interim periods. The Company has also increased the disclosures related to credit allowances and underwriting

**CRITICAL ACCOUNTING POLICIES, PAGE 54**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;31. PLEASE REVISE YOUR DISCLOSURE HERE AND IN YOUR SUMMARY OF SIGNIFICANT ACCOUNTING POLICY FOOTNOTES TO DISCLOSE YOUR GOODWILL IMPAIRMENT POLICY.

In response to this comment, the Company has revised its Critical Accounting Policies disclosure and financial statement footnotes to include its goodwill impairment policy. As revised, we disclose that goodwill is tested annually for impairment (or more frequently if indicators arise) using a qualitative assessment followed by a quantitative fair value comparison if necessary. Impairment is recognized if carrying value exceeds fair value. This aligns with ASC 350.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;32. PLEASE REVISE YOUR DISCLOSURES HERE AND IN YOUR FINANCIAL STATEMENT FOOTNOTES TO DISCLOSE YOUR CHARGE-OFF POLICY FOR ADVANCE RECEIVABLES.

In response to this comment, the Company has revised its Critical Accounting Policies and footnotes to disclose its charge-off policy for advance receivables. As revised, we state that receivables are charged off when deemed uncollectible based on factors such as delinquency >90 days, bankruptcy, or legal determination, aligning with ASC 326.

**REVENUE RECOGNITION, PAGE 55**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;33. WITH REGARD TO MCAS, WE NOTE YOUR DISCLOSURE THAT MERCHANTS ARE CONTRACTUALLY REQUIRED TO REPAY YOU BASED ON AN ESTIMATED PERIOD AND AGREED-UPON PERCENTAGE OF FUTURE RECEIVABLES/RECEIPTS THAT THE CUSTOMER COLLECTS. PLEASE REVISE YOUR DISCLOSURES HERE AND/OR ELSEWHERE, AS APPROPRIATE, TO CLARIFY:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ HOW YOU DEFINE THE "ESTIMATED PERIOD;"

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ WHETHER THERE IS A DEFINITIVE END DATE BY WHICH ALL AMOUNTS MUST BE REPAID;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ WHETHER THERE ARE ANY MINIMUM PAYMENT REQUIREMENTS;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ AVERAGE DURATION OF MCA CONTRACTS;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ AVERAGE DISCOUNT OR FACTOR RATES; AND

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ WHETHER YOU MONITOR RECEIVABLES WITH REPAYMENT PERIODS GREATER THAN YOUR ORIGINAL EXPECTED OR CONTRACTUAL REPAYMENT PERIOD. IF YOU DO MONITOR THIS, DISCLOSE THE PROPORTION OF SUCH RECEIVABLES FOR THE PERIODS PRESENTED.

In response to this comment, the Company has revised its Revenue Recognition disclosure and related sections to clarify MCA terms:

"Estimated Period": The estimated period is dependent on the agreed-upon % of the customer's future receipts that the customer collects.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Definitive End Date: No fixed maturity; repayment continues until purchased amount is remitted, subject to reconciliation if requested and based on a decline in receipts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Minimum Payments: Minimum payment are defined as per the contract but are adjusted if requested by the merchant on the basis of their receipt history.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Average Duration: Approximately 8-10 months based on historical data.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Average Factor Rate: Typically 1.2–1.4x the advance amount.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Monitoring Extended Repayments: The Company does not currently actively monitor receivables with repayment periods greater than the original expected or contractual payment period. The Company however does track and adjust a status of a deal depending on the latest information available for example. Performing, modified payments, Legal etc

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;34. WE NOTE YOUR DISCLOSURES REGARDING REVENUE AND COSTS ASSOCIATED WITH MCAS. PLEASE REVISE YOUR DISCLOSURES HERE AND/OR ELSEWHERE, AS APPROPRIATE, TO ADDRESS THE ITEMS BELOW.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ EXPLAIN WHERE FEES, REPAYMENTS OF PRINCIPAL, AND REVENUE FOR THE DISCOUNT AMOUNT ARE EACH REFLECTED IN THE FINANCIAL STATEMENTS.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ PROVIDE A ROLL-FORWARD SHOWING MCA ACTIVITY OVER THE PERIODS PRESENTED, DISAGGREGATED BETWEEN SYNDICATION AND DIRECT ARRANGEMENTS.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ DISCUSS HOW YOU DETERMINE THE PROPORTION OF REMITTANCES ALLOCATED TO PRINCIPAL REPAYMENT VERSUS REVENUE AND, TO THE EXTENT THAT IT IS NOT ALREADY PROVIDED IN THE ROLL-FORWARD REQUESTED ABOVE, DISCLOSE WHAT PROPORTION WAS ALLOCATED TO EACH FOR THE PERIODS PRESENTED.

In response to this comment, the Company has revised its Revenue Recognition footnote and MD&A to address MCA accounting:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Financial Statement Reflection: Origination/administrative fees recognized as revenue over contract term (Revenue line); principal repayments reduce Advance Receivables; discount revenue recognized as remittances collected (Revenue line).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Roll-Forward: Added table showing MCA activity (beginning balance, originations, collections, charge-offs, ending balance) disaggregated by direct/syndicated for 2023, 2024, and H1 2025.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Allocation: Proportion determined by applying contractual factor rate to allocate remittances between principal (reduces receivable) and revenue (discount portion); e.g., X% to principal, Y% to revenue in 2023 (disclosed by period).

**MANAGEMENT AND BOARD OF DIRECTORS, PAGE 57**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;35. PLEASE REVISE YOUR DISCLOSURE TO DISCLOSE THE PERIOD(S) DURING WHICH EACH DIRECTOR HAS SERVED ON THE BOARD OF DIRECTORS. PLEASE ALSO REVISE YOUR DESCRIPTION OF THE BACKGROUND AND BUSINESS EXPERIENCES OF YOUR DIRECTORS AND EXECUTIVE OFFICERS TO DISCLOSE EACH PERSON'S PRINCIPAL OCCUPATIONS AND EMPLOYMENT DURING THE PAST FIVE YEARS. REFER TO ITEM 401(E)(1) OF REGULATION S-K.

In response to this comment, the Company updated its registration statement to include the date of commencement as a director and also to include a 5-year employment history for each officer and director.

**CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, PAGE 63**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;36. PLEASE REVISE TO DISCLOSE, FOR EACH TRANSACTION DISCUSSED, THE NAME OF THE RELATED PERSON AND THE BASIS UPON WHICH THE PERSON IS A RELATED PERSON.

In response to this comment, the Company has revised its Certain Relationships and Related Transactions section to disclose, for each transaction, the name of the related person and the basis for their related-party status (e.g., officer, director, or affiliate).

**DESCRIPTION OF CAPITAL STOCK** 

**SERIES C PREFERRED STOCK, PAGE 65**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;37. YOUR DISCLOSURES IN SOME SECTIONS, SUCH AS ON PAGE 14, APPEAR TO INDICATE THAT SERIES C PREFERRED STOCK WILL CONVERT INTO SHARES OF YOUR COMMON STOCK UPON FILING OF YOUR REGISTRATION STATEMENT. OTHER DISCLOSURES, SUCH AS ON PAGE 33, APPEAR TO INDICATE THAT AUTOMATIC CONVERSION WILL OCCUR WHEN SALE OF YOUR COMMON SHARES OCCUR. FURTHER, DISCLOSURES ON PAGE 66 STATE THAT THE SERIES C SHARES WILL BE REDEEMED AND CONVERTED. PLEASE REVISE YOUR DISCLOSURES TO CLARIFY WHEN THESE PREFERRED SHARES WILL CONVERT TO COMMON SHARES (I.E., WHETHER IT OCCURRED UPON FILING OF YOUR REGISTRATION STATEMENT OR WHETHER IT WILL OCCUR UPON EFFECTIVENESS OR SALE OF YOUR COMMON SHARES) AND WHETHER YOU INTEND TO REDEEM SHARES.

In response to this comment, the Series C shares have been converted to common stock pursuant to a notice of conversion submitted by Vincent Napolitano. The Series C shares were thus voluntarily converted to common stock as per the designation for the Series C Preferred Stock. The Company has filed a Certificate of Withdrawal for the Series C Preferred Stock, as no shares remain outstanding. All references to automatic conversion upon filing, effectiveness, or sale have been removed, and the disclosure now states that the conversion has already occurred.

**INDEX TO FINANCIAL STATEMENTS, PAGE 77**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;38. WE NOTE NUMEROUS INCONSISTENCIES IN YOUR FINANCIAL STATEMENT AND FOOTNOTE PRESENTATION AS DISCLOSED ON PAGES F-1 THROUGH F-20 COMPARED TO PAGES F-21 THROUGH F-35. THESE INCONSISTENCIES INCLUDE, BUT ARE NOT LIMITED TO:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ BALANCE SHEET PRESENTATION (E.G., LINE ITEMS);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ BALANCE SHEET AMOUNTS AS OF DECEMBER 31, 2023 (SEE PAGE F-2 VERSUS PAGE F-21);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS PRESENTATION;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS ACTIVITY (E.G., PREFERRED SHARES INTEREST EXPENSE INCLUDED IN FY 2023, BUT NOT IN THE NINE MONTHS ENDED SEPTEMBER 30, 2023);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT PRESENTATION, BALANCES, AND ACTIVITY;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ STATEMENTS OF CASH FLOWS PRESENTATION; AND

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ SEVERAL DISCLOSURES IN THE NOTES TO FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024 THAT ARE INCONSISTENT WITH THE FINANCIAL STATEMENTS, NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED DECEMBER 31, 2023, AND/OR WITH MD&A DISCLOSURES (E.G., DISCLOSURE OF PROVISION VERSUS CREDIT LOSSES ON FINANCIAL INSTRUMENTS, FAVO GROUP TRANSACTION AMOUNTS, ETC.).

PLEASE EXPLAIN THESE INCONSISTENCIES AND REVISE YOUR FINANCIAL STATEMENT PRESENTATION AND OTHER DISCLOSURES AS NECESSARY.

In response to this comment, the Company has revised its financial statements and footnotes to resolve the noted inconsistencies. The Company has included the latest available financial statements which are the audited financial statements for the full year 2024 and the YTD Q2 2025 interim results.

**ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES, PAGE 86**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;39. PLEASE REVISE THIS SECTION TO INCLUDE FOR EACH SALE THE INFORMATION REQUIRED BY ITEM 701 OF REGULATION S-K. FOR EXAMPLE PURPOSES, PLEASE IDENTIFY THE PERSONS OR CLASS OF PERSONS TO WHOM YOU AUTHORIZED THE ISSUANCES OF RESTRICTED SHARES ON MARCH 8, 2021 AND JUNE 30, 2021.

In response to this comment, the Company revised its registration statement to include the persons who received the issuance of restricted shares on each of those dates.

**FAVO CAPITAL, INC. CONSOLIDATED BALANCE SHEETS, PAGE F-2**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;40. WE NOTE THAT YOU HAD A SUBSCRIPTION RECEIVABLE OF $3,020,831 AS OF DECEMBER 31, 2023 AND YOUR DISCLOSURE ON PAGE F-23 INDICATING THE RECOGNITION OF A COMMON STOCK SUBSCRIPTION AMOUNT AS OF SEPTEMBER 30, 2024. WE ALSO NOTE YOUR DISCLOSURES, SUCH AS ON PAGES 87-88 AND F-20, REGARDING THE ISSUANCE OF SERIES A PREFERRED SHARES TO FORFRONT CAPITAL, LLC IN ACCORDANCE WITH A SIGNED SUBSCRIPTION AGREEMENT. PLEASE REVISE YOUR DISCLOSURES IN AN APPROPRIATE LOCATION TO PROVIDE ADDITIONAL INFORMATION REGARDING THE TERMS AND ORIGIN OF ANY SUBSCRIPTION AGREEMENTS AND YOUR ACCOUNTING POLICY FOR RECORDING THESE TRANSACTIONS.

In response to this comment, the Company has revised its disclosures to include an explanation on Stock Subscription Receivables.

**CONSOLIDATED STATEMENT OF STOCKHOLDERS' (DEFICIT), PAGE F-4**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;41. WE NOTE YOUR RETAINED EARNINGS DISTRIBUTIONS IN 2022 AND 2023. PLEASE ADDRESS THE ITEMS BELOW.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ REVISE YOUR DISCLOSURES TO EXPLAIN THESE DISTRIBUTIONS, SUCH AS WHO RECEIVED THEM AND WHY THEY WERE MADE.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ GIVEN THE ABSENCE OF RETAINED EARNINGS, TELL US HOW YOU DETERMINED THAT THESE DISTRIBUTIONS SHOULD BE ACCOUNTED FOR AS AN INCREASE TO ACCUMULATED DEFICIT RATHER THAN AS A RETURN OF CAPITAL CHARGED AGAINST ADDITIONAL PAID-IN CAPITAL. INCLUDE IN YOUR RESPONSE ANY AUTHORITATIVE GUIDANCE YOU RELIED UPON IN REACHING YOUR CONCLUSION.

In response to this comment, the Company has revised the FAVO Group of Companies acquisition note to include more details related to the acquisition. The acquisition was deemed an acquisition under common control and therefore the prior period consolidated financial statements for the periods in which the entities were under common control have been adjusted. Accordingly, the Company's prior period consolidated financial statements from the date of common control under FAVO have been adjusted to include the financial information of all the entities for that same period. The retained earnings distribution was done prior to the acquisition date and have therefore been shown as a retained earnings distribution as part of the consolidation.

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, PAGE F-6**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;42. PLEASE REVISE TO INCLUDE A DESCRIPTION OF, AND ACCOUNTING POLICY FOR, SYNDICATE PAYABLE.

In response to this comment, the Company has revised its footnotes to include a description and accounting policy for syndicate payable. As revised, we disclose that syndicate payable represents amounts due to syndication partners for their pro rata share of remittances collected on syndicated MCAs. These are recorded as liabilities upon funding and reduced as collections are distributed.

**NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** 

**REVENUE RECOGNITION, PAGE F-7**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;43. PLEASE PROVIDE US WITH YOUR ACCOUNTING ANALYSIS FOR MERCHANT CASH ADVANCES, INCLUDING SPECIFIC REFERENCES TO AUTHORITATIVE GUIDANCE YOU RELIED UPON TO SUPPORT YOUR ACCOUNTING TREATMENT AND PRESENTATION. ENSURE THAT YOUR ANALYSIS ADDRESSES ANY DIFFERENCES IN ACCOUNTING FOR SYNDICATED AND DIRECT MCAS.

In response to this comment, the Company respectfully provides the following accounting analysis for merchant cash advances ("MCAs"), including references to authoritative guidance. Our MCAs are structured as purchases of future receipts (not loans), accounted for under ASC 310 (Receivables) as nonrefundable receivables. Revenue (discount) is recognized proportionally as remittances are collected (ASC 310-20). Syndicated MCAs follow the same model, with our participation recorded as a receivable and partners' shares as syndicate payable (ASC 405). No differences in core accounting; syndication adds bifurcation of economics.

**CREDIT LOSSES ON FINANCIAL INSTRUMENTS, PAGE F-8**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;44. PLEASE ENHANCE YOUR DISCLOSURES, HERE AND IN YOUR INTERIM FOOTNOTES, TO PROVIDE A DISCUSSION OF CHANGES IN RISK FACTORS THAT INFLUENCED YOUR CURRENT ESTIMATE OF CREDIT LOSS AS WELL AS REASONS FOR THOSE CHANGES (E.G., CHANGES IN PORTFOLIO COMPOSITION, UNDERWRITING PRACTICES, ETC.). IN ADDITION, REVISE YOUR DISCLOSURES TO DISCUSS ANY REASONS FOR SIGNIFICANT CHANGES IN THE AMOUNT OF WRITE-OFFS. REFER TO ASC 326-20-50- 10 AND -11.

In response to this comment, the Company has enhanced its credit loss disclosures in the footnotes (annual and interim) to discuss changes in risk. The disclosure also includes a summary of movements in credit losses for the year.

**NOTE 4 - FAVO GROUP ACQUISITION, PAGE F-11**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;45. WE NOTE YOUR DISCLOSURE ON PAGE F-12 OF THE ENTITIES ACQUIRED IN THE FAVO GROUP TRANSACTION. PLEASE ENHANCE YOUR DISCLOSURES TO BRIEFLY DESCRIBE EACH ACTIVE ENTITY, INCLUDING WHAT BUSINESS IT HAS BEEN ENGAGED IN DURING THE PERIODS COVERED BY YOUR FINANCIAL STATEMENTS. REFER TO ASC 805-50-50-3.

In response to this comment, the Company has enhanced its FAVO Group acquisition footnote to briefly describe each active entity's business during the periods presented (e.g., FAVO Funding LLC: direct MCA funder; Honeycomb Sub Fund LLC: syndication entity). Inactive entities (e.g., California LLCs) are noted as dormant. This complies with ASC 805-50-50-3.

**FAVO CAPITAL, INC. CONSOLIDATED BALANCE SHEETS (UNAUDITED), PAGE F-21**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;46. PLEASE REVISE YOUR DISCLOSURE, IN AN APPROPRIATE LOCATION, TO EXPLAIN WHAT "DEFERRED REVENUE" AND "PREPAID EXPENSE" REPRESENT. FURTHER, PLEASE:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ REVISE THE FINANCIAL STATEMENTS FOOTNOTES TO INCLUDE AN ACCOUNTING POLICY FOR EACH OF THESE ITEMS; AND

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ TELL US WHY YOU PRESENT DEFERRED REVENUE AS A REDUCTION TO ADVANCE RECEIVABLES RATHER THAN AS A LIABILITY. INCLUDE REFERENCES TO AUTHORITATIVE LITERATURE YOU RELIED UPON TO SUPPORT YOUR CONCLUSIONS.

In response to this comment, the Company has included in this latest update the audited financial statements for the full year 2024 and the YTD June 2025 interim results. In line with the audit, prepaid expenses have been re-classified as Stock Subscription payable and the reference to deferred revenue has been excluded. The Company has also updated the disclosures to include more information on deferred commissions and origination fees.

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED), PAGE F-25**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;47. PLEASE REVISE YOUR INTERIM FOOTNOTE DISCLOSURES TO INCLUDE AN ALLOWANCE ROLL-FORWARD. REFER TO ASC 326-20-50-13.

In response to this comment, the Company has revised its interim footnotes to include an allowance for credit losses roll-forward, showing beginning balance, provision, charge-offs, recoveries, and ending balance (ASC 326-20-50-13).

**NOTE 4 – BUSINESS COMBINATIONS, PAGE F-29**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;48. PLEASE REVISE TO INCLUDE ALL OF THE DISCLOSURES REQUIRED BY ASC 805-10-50-2 FOR THE SIMPLIFIED ACQUISITION.

In response to this comment, the Company has revised the Business Combinations footnote to include all ASC 805-10-50-2 disclosures for the Simplified Acquisition, such as acquisition date, assets/liabilities recognized, goodwill rationale, and pro forma information (or impracticability explanation).

Sincerely,

<u>/s/ Katy Murless</u> 

Katy Murless

Chief Financial Officer