Document:

Frank Messana

General Counsel, North America

Phone: 704-260-3365

Fax: 704-260-3304

Email: fmessana@acninc.com

 

 

 

April 1, 2012

VIA EMAIL: Effi.Baruch@deltathree.com

 

Mr. Effi Baruch

 

CEO and President

deltathree, Inc., a Delaware corporation

Jerusalem Technology Park, Bldg. 9

PO Box 48265

Jerusalem, Israel 91481

 

CEO and President

DME Solutions, Inc., a New York corporation

 

CEO and President

Delta Three Israel, Ltd., an Israeli corporation

 

RE: Agreement Concerning Outstanding/Future Commissions

 

Dear Mr. Baruch:

 

As part of the Sales Agency Agreement between ACN, Inc., deltathree,
Inc. (“Inc.”), DME Solutions, Inc. (“DME”), and Delta Three Israel, Ltd. (“Delta Three Israel”)
(Inc., DME, and Delta Three Israel are collectively referred to herein as “D3”), dated September 27, 2010 and amended
as of January 26, 2011, and the Introducer Agreement between ACN Europe B.V. and those same D3 parties dated April 13, 2011, (both
documents together herein referred to as the “Agreements”) D3 is obligated to pay ACN U.S. and ACN Europe (“ACN”)
certain commissions for ACN’s sale of D3’s Mobile World application. D3 has failed to pay ACN its earned commissions
on sales as required under the Agreements in an amount at least equal to $576,000 from November, 2010 through November 2011. That
amount includes commissions due for sales by ACN’s U.S./Canadian and European operations, and additional commissions continue
to accrue for subsequent months as well.

 

The terms of the Agreements require that the commissions for
each month be paid to ACN by D3 by wire transfer on or before the 15th day following the end of each such month. 
Because D3 has failed to make all such payments to ACN, D3 has been and continues to be in material breach of the Agreement, and
ACN is entitled to exercise all of its rights and pursue all of its available remedies against D3 for this breach.  ACN is
willing, however, to forbear from exercising these remedies at this time, provided that D3 agrees to and performs in accordance
with the following conditions:

 

 

 

 

 

    	 

    	 	

    
 

Frank Messana

General Counsel, North America

Phone: 704-260-3365

Fax: 704-260-3304

Email: fmessana@acninc.com

 

 

		1.	Beginning April 1, 2012 (the “Effective Date”) and for each month thereafter, D3 shall pay all then-current commissions
on a timely basis as required under the Agreements.  Any cure periods provided for under the Agreements for non-payment shall
no longer apply. 
	 	 	 

		2.	Commencing with the Effective Date, D3 shall pay to ACN concurrently with each then-current commission payment, a late-payment
fee in the amount of one percent (1%) per month of any past-due, unpaid commissions.  Such payment shall be a separate and
distinct payment to that which is paid for then-current commissions.
	 	 	 

		3.	Commencing on July, 15, 2012, and continuing on the 15th day of each month thereafter, D3 will, in addition to paying
then current commissions in accordance with Item 1, and late payment fees in accordance with Item 2, pay down any unpaid past due
amounts.  The amount of such “pay down” shall be at least $15,000 per month through June 15, 2013; and commencing
July 15, 2013, and continuing on the 15th day of each month thereafter, the pay down amount will increase to at least
$25,000 per month until such time that the unpaid balance amount is fully satisfied.  Notwithstanding the foregoing, D3 shall
pay in full to ACN upon 30 days’ notice, any unpaid, past due amounts.
	 	 	 

		4.	If D3 fails to pay the full amounts due within the time frames set forth herein, or otherwise materially breaches the Agreements,
ACN may in its sole discretion terminate this forbearance agreement and exercise its rights and pursue all remedies available to
it at law or in equity.

 

D3 shall pay upon 30 days’ notice any and all reasonable
expenses, including reasonable attorney’s fees, incurred by ACN in connection with any collection efforts made by ACN in
relation to amounts owed to ACN by D3 or for any enforcement of ACN’s rights or remedies for D3’s breach of this letter
or the Agreements.  In the event of any Insolvency Event as defined in the Agreements, excepting for the event described in
sub-clause (d) therein, by D3 or any of its subsidiaries, all unpaid amounts due to ACN from D3 shall become immediately due and
payable, effective immediately prior to such Insolvency Event described above by D3.  Any amount due to ACN from any D3 party
under this letter or under the Agreements shall be the joint and several liability of Inc., DME, and Delta Three Israel. 

 

Nothing in this letter shall be deemed a waiver of any rights
ACN has under the Agreements as amended, and, except as expressly provided herein, the Agreements
shall remain unchanged and in full force and effect. Furthermore, any rights that ACN has, including the right to receive payment
and/or damages for D3’s failure to pay as a result of the contractual relationship between ACN and D3 are expressly preserved
even in the event the underlying Agreements are terminated in accordance with its terms.

 

This letter shall be governed by and construed in accordance
with the laws of the State of New York.  Notwithstanding any provision to the contrary in the Agreements, ACN may enforce
its rights and exercise any available remedies against D3 for any breach by D3 of this letter or the Agreement by pursuing, in
ACN’s sole discretion (i) arbitration as outlined under Section 18(f) of the Agreements, except such arbitration may be
held in Charlotte, North Carolina, in ACN’s sole discretion, or (ii) action in any state or federal court in Charlotte,
North Carolina.  In addition, ACN may terminate the Agreements at its convenience by providing 30 days’ notice to Inc.
 Upon any termination of the Agreements, in addition to other surviving provisions pursuant to Section 18(j) of the Agreements,
D3’s payment obligations and ACN’s rights with respect thereto under this letter shall survive.  

 

 

 

 

 

    	 

    	 	

    
  

Frank Messana

General Counsel, North America

Phone: 704-260-3365

Fax: 704-260-3304

Email: fmessana@acninc.com

 

 

 

The following provisions of the Agreements shall apply to this
letter agreement as if fully set forth herein and made applicable hereto: Sections 18(a) [Entire Agreement; Amendment; Waiver],
(b) [Severability], (c) [Notices], (d) [Successors and Assigns], (h) [Further Assurances] and (i) [Counterparts].   

 

Please indicate your acknowledgement and acceptance of the terms
of this letter effective April 1, 2012 in the space provided below and return a fully executed copy.

 

 

Sincerely,

 

/s/ Frank Messana

Frank Messana

DELTATHREE, INC. 

 

By:/s/ Effi Baruch

Name: Effi Baruch

Title: CEO and President

 

DME SOLUTIONS, INC. 

 

By: /s/ Effi Baruch

Name: Effi Baruch

Title: CEO and President

 

DELTA THREE ISRAEL, LTD. 

 

By: /s/ Effi Baruch

Name: Effi Baruch

Title:
CEO and PresidentSUBSCRIPTION AGREEMENT

 

SUBSCRIPTION AGREEMENT
(this “Agreement”) made as of the last date set forth on the signature page hereof between Global Investor Services,
Inc. (the “Company”), and the undersigned (the “Subscriber”).

 

WITNESSETH:

 

WHEREAS, the Company
is offering a maximum of 1 Unit ($100,000) (the “Offering”) on a best efforts basis, at a price of $100,000 per Unit.
Each Unit consisting of (i) a $100,000 8% secured convertible promissory note of the Company, convertible into common stock, $.001
per value per share (the “Common Stock”), at $0.01 per share into 10,000,000 shares of the Company’s Common Stock,
in the form attached hereto (the “Notes”), and (ii) common stock purchase warrants (the “Warrants”) to
purchase 2,500,000 of the shares of Common Stock at an exercise price of $0.03 per share. The Common Stock , Notes, the Warrants,
and the “Units” are hereinafter occasionally referred to as the Securities;

 

WHEREAS, the Company,
in its sole discretion, may exercise an over-allotment option for an additional Units up to $500,000;

 

WHEREAS, the Company
intends to offer the Units directly and, may, in its sole discretion, offer a portion of the units through placement agents; and

 

WHEREAS, the Subscriber
desires to purchase that number of Units set forth on the signature page hereof on the terms and conditions hereinafter set forth.

 

NOW, THEREFORE, in consideration
of the premises and the mutual representations and covenants hereinafter set forth, the parties hereto do hereby agree as follows:

 

I.           SUBSCRIPTION
FOR UNITS AND REPRESENTATIONS BY SUBSCRIBER

 

1.1           Subject
to the terms and conditions hereinafter set forth and in the Confidential Term Sheet dated June 15th, 2011 (such term
sheet, together with all amendments thereof and supplements and exhibits thereto, the “term sheet”), the Subscriber
hereby irrevocably subscribes for and agrees to purchase from the Company such number of Units, and the Company agrees to sell
to the Subscriber as is set forth on the signature page hereof, at a per Unit price equal to $100,000 per Unit. The purchase price
is payable by personal or business check or money order made payable to “Global Investor Services, Inc” contemporaneously
with the execution and delivery of this Agreement by the Subscriber. Subscribers may also pay the subscription amount by, wire
transfer of immediately available funds to:

 

	Name:	 	GLOBAL INVESTOR SERVICES, INC.
	Bank:	 	J P Morgan Chase Bank, N.A.
	Account:	 	764233482
	ABA #:	 	021000021
	Address;	 	New York, New York, 10017

 

    	1

    	 

    

 

The Subscriber recognizes that the purchase of the Units involves
a high degree of risk including, but not limited to, the following: (a) the Company remains a development stage business with limited
operating history and requires substantial funds in addition to the proceeds of the Offering; (b) an investment in the Company
is highly speculative, and only investors who can afford the loss of their entire investment should consider investing in the Company
and the Units; (c) the Subscriber may not be able to liquidate its investment; (d) transferability of the Units, including the
Common Stock and Notes contained therein and Common Stock issuable upon exercise of the Notes (defined below) (sometimes hereinafter
collectively referred to as the “Securities”) is extremely limited; (e) in the event of a disposition, the Subscriber
could sustain the loss of its entire investment; (f) the Company has not paid any dividends since its inception and does not anticipate
paying any dividends; and (g) the Company may issue additional securities in the future which have rights and preferences that
are senior to those of the Common Stock.

 

1.2           The
Subscriber represents that the Subscriber is an “accredited investor” as such term is defined in Rule 501 of Regulation
D (“Regulation D”) promulgated under the Securities Act of 1933, as amended (the “Securities Act”), as
indicated by the Subscriber’s responses to the questions contained in Article VII hereof, and that the Subscriber is able
to bear the economic risk of an investment in the Units.

 

1.3           The
Subscriber hereby acknowledges and represents that (a) the Subscriber has knowledge and experience in business and financial matters,
prior investment experience, including investment in securities that are non-listed, unregistered and/or not traded on a national
securities exchange nor on the Financial Industry Regulatory Authority (the “FINRA”) automated quotation system (“NASDAQ”),
or the Subscriber has employed the services of a “purchaser representative” (as defined in Rule 501 of Regulation D),
attorney and/or accountant to read all of the documents furnished or made available by the Company both to the Subscriber and to
all other prospective investors in the Units to evaluate the merits and risks of such an investment on the Subscriber’s behalf;
(b) the Subscriber recognizes the highly speculative nature of this investment; and (c) the Subscriber is able to bear the economic
risk that the Subscriber hereby assumes.

 

1.4           The
Subscriber hereby acknowledges receipt and careful review of this Agreement, the 34 Act Reports (as defined herein), including
all exhibits thereto and the Risk Factors attached hereto as Exhibit A, and any documents which may have been made available upon
request as reflected therein (collectively referred to as the “Offering Materials”) and hereby represents that the
Subscriber has been furnished by the Company during the course of the Offering with all information regarding the Company, the
terms and conditions of the Offering and any additional information that the Subscriber has requested or desired to know, and has
been afforded the opportunity to ask questions of and receive answers from duly authorized officers or other representatives of
the Company concerning the Company and the terms and conditions of the Offering.

 

1.5           (a)          In
making the decision to invest in the Units the Subscriber has relied solely upon the information provided by the Company in the
Offering Materials. To the extent necessary, the Subscriber has retained, at its own expense, and relied upon appropriate professional
advice regarding the investment, tax and legal merits and consequences of this Agreement and the purchase of the Units hereunder.
The Subscriber disclaims reliance on any statements made or information provided by any person or entity in the course of Subscriber’s
consideration of an investment in the Units other than the Offering Materials.

 

    	2

    	 

    

 

(b)          The
Subscriber represents that (i) the Subscriber was contacted regarding the sale of the Units by the Company (or an authorized agent
or representative thereof) with whom the Subscriber had a prior substantial pre-existing relationship and (ii) no Units were offered
or sold to it by means of any form of general solicitation or general advertising, and in connection therewith, the Subscriber
did not (A) 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; or (B) attend any seminar
meeting or industry investor conference whose attendees were invited by any general solicitation or general advertising.

 

1.6           The
Subscriber hereby represents that the Subscriber, either by reason of the Subscriber’s business or financial experience or
the business or financial experience of the Subscriber’s professional advisors (who are unaffiliated with and not compensated
by the Company or any affiliate or selling agent of the Company, directly or indirectly), has the capacity to protect the Subscriber’s
own interests in connection with the transaction contemplated hereby.

 

1.7           The
Subscriber hereby acknowledges that the Offering has not been reviewed by the United States Securities and Exchange Commission
(the “SEC”) nor any state regulatory authority since the Offering is intended to be exempt from the registration requirements
of Section 5 of the Securities Act pursuant to Regulation D promulgated thereunder. The Subscriber understands that the Securities
have not been registered under the Securities Act or under any state securities or “blue sky” laws and agrees not to
sell, pledge, assign or otherwise transfer or dispose of the Securities unless they are registered under the Securities Act and
under any applicable state securities or “blue sky” laws or unless an exemption from such registration is available.

 

1.8           The
Subscriber understands that the Securities comprising the Units have not been registered under the Securities Act by reason of
a claimed exemption under the provisions of the Securities Act that depends, in part, upon the Subscriber’s investment intention.
In this connection, the Subscriber hereby represents that the Subscriber is purchasing the Securities for the Subscriber’s
own account for investment and not with a view toward the resale or distribution to others. The Subscriber, if an entity, further
represents that it was not formed for the purpose of purchasing the Securities.

 

1.9           The
Subscriber understands that there is a limited public market for the Common Stock issuable upon conversion of the Notes. The Subscriber
understands that even if more significant public market develops for such Securities, Rule 144 (“Rule 144”) promulgated
under the Securities Act requires for non-affiliates, among other conditions, a six month holding period prior to the resale (in
limited amounts) of securities acquired in a non-public offering without having to satisfy the registration requirements under
the Securities Act. The Subscriber understands and hereby acknowledges that the Company is under no obligation to register any
of the Securities under the Securities Act or any state securities or “blue sky” laws other than as set forth in Article
V.

 

1.10         The
Subscriber consents to the placement of a legend on any certificate or other document evidencing the Securities that such Securities
have not been registered under the Securities Act or any state securities or “blue sky” laws and setting forth or referring
to the restrictions on transferability and sale thereof contained in this Agreement. The Subscriber is aware that the Company will
make a notation in its appropriate records with respect to the restrictions on the transferability of such Securities. The legend
to be placed on each certificate shall be in form substantially similar to the following:

 

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“THE SECURITIES REPRESENTED
HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OR ANY STATE
SECURITIES OR “BLUE SKY LAWS,” AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED ABSENT
AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR COMPLIANCE WITH RULE 144 PROMULGATED UNDER SUCH ACT, OR UNLESS THE COMPANY
HAS RECEIVED AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.”

 

1.11         The
Subscriber understands that the Company will review this Agreement and is hereby given authority by the Subscriber to call Subscriber’s
bank or place of employment or otherwise review the financial standing of the Subscriber; and it is further agreed that the Company,
at its sole discretion, reserves the unrestricted right, without further documentation or agreement on the part of the Subscriber,
to reject or limit any subscription, to accept subscriptions for fractional Units and to close the Offering to the Subscriber at
any time and that the Company will issue stop transfer instructions to its transfer agent with respect to such Securities.

 

1.12         The
Subscriber hereby represents that the address of the Subscriber furnished by Subscriber on the signature page hereof is the Subscriber’s
principal residence if Subscriber is an individual or its principal business address if it is a corporation or other entity.

 

1.13         The
Subscriber represents that the Subscriber has full power and authority (corporate, statutory and otherwise) to execute and deliver
this Agreement and to purchase the Units. This Agreement constitutes the legal, valid and binding obligation of the Subscriber,
enforceable against the Subscriber in accordance with its terms.

 

1.14         If
the Subscriber is a corporation, partnership, limited liability company, trust, employee benefit plan, individual retirement account,
Keogh Plan, or other tax-exempt entity, it is authorized and qualified to invest in the Company and the person signing this Agreement
on behalf of such entity has been duly authorized by such entity to do so.

 

1.15         The
Subscriber acknowledges that if he or she is a Registered Representative of an FINRA member firm, he or she must give such firm
the notice required by the FINRA’s Rules of Fair Practice, receipt of which must be acknowledged by such firm in Section
7.3 below.

 

1.16         The
Subscriber acknowledges that at such time, if ever, as the Securities are registered (as such term is defined in Article V hereof),
sales of the Securities will be subject to state securities laws.

 

1.17         The
Subscriber represents that the Subscriber has read and fully understands the risks associated with the Company and the Units.

 

1.18         (a)          The
Subscriber agrees not to issue any public statement with respect to the Subscriber’s investment or proposed investment in
the Company or the terms of any agreement or covenant between them and the Company without the Company’s prior written consent,
except such disclosures as may be required under applicable law or under any applicable order, rule or regulation.

 

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(b)          The
Company agrees not to disclose the names, addresses or any other information about the Subscribers, except as required by law.

 

1.19         The
Subscriber agrees to hold the Company and its directors, officers, employees, affiliates, controlling persons and agents and their
respective heirs, representatives, successors and assigns harmless and to indemnify them against all liabilities, costs and expenses
incurred by them as a result of (a) any sale or distribution of the Securities by the Subscriber in violation of the Securities
Act or any applicable state securities or “blue sky” laws; or (b) any false representation or warranty or any breach
or failure by the Subscriber to comply with any covenant made by the Subscriber in this Agreement (including the Confidential Investor
Questionnaire contained in Article VII herein) or any other document furnished by the Subscriber to any of the foregoing in connection
with this transaction.

 

1.20         The
Subscriber represents that neither the Subscriber or any affiliates of the Subscriber has an open short position in the common
stock of the Company and the Subscriber agrees that, so long as any of the Securities remain outstanding the Subscriber will not
enter into or effect any “short sales” (as such term is defined in Rule 3b-3 of the 1934 Act) of the Common Stock,
or shares of common stock issuable upon conversion of the Notes, or hedging transaction which establishes a net short position
with respect to the Common Stock or shares of common stock issuable upon conversion of the Notes.

 

II.          REPRESENTATIONS
BY AND COVENANTS OF THE COMPANY

 

The Company hereby represents
and warrants to the Subscriber that:

 

2.1           Organization,
Good Standing and Qualification. The Company is a corporation duly organized, validly existing and in good standing under the
laws of the State of Nevada and has full corporate power and authority to conduct its business.

 

2.2           Capitalization
and Voting Rights. The authorized capital stock of the Company consists of 1,500,000,000 shares of Common Stock of which 877,358,568
shares are presently issued and outstanding, and 10,000,000 shares of preferred stock of which none are issued or outstanding All
issued and outstanding shares of the Company are validly issued, fully paid and non-assessable. Except as set forth in the Offering
Materials and the 34 Act Reports, there are no outstanding options, warrants, agreements, convertible securities, preemptive rights
or other rights to subscribe for or to purchase any shares of capital stock of the Company. Except as set forth in the Offering
Materials and the 34 Act reports, and as otherwise required by law, there are no restrictions upon the voting or transfer of any
of the shares of capital stock of the Company pursuant to the Company’s Articles of Incorporation (the “Articles of
Incorporation”), By-Laws or other governing documents or any agreement or other instruments to which the Company is a party
or by which the Company is bound.

 

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2.3           Authorization;
Enforceability. The Company has all corporate right, power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. All corporate action on the part of the Company, its directors and stockholders necessary for
the (i) authorization execution, delivery and performance of this Agreement by the Company; and (ii) authorization, sale, issuance
and delivery of the Securities contemplated hereby and the performance of the Company’s obligations hereunder has been taken.
This Agreement has been duly executed and delivered by the Company and constitutes a legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, subject to laws of general application relating to bankruptcy,
insolvency and the relief of debtors and rules of law governing specific performance, injunctive relief or other equitable remedies,
and to limitations of public policy. The Common Stock, when issued and fully paid for in accordance with the terms of this Agreement,
will be validly issued, fully paid and non-assessable. The issuance and sale of the Common Stock contemplated hereby will not give
rise to any preemptive rights or rights of first refusal on behalf of any person which have not been waived in connection with
this offering.

 

2.4           No
Conflict; Governmental Consents.

 

(a)          The
execution and delivery by the Company of this Agreement and the consummation of the transactions contemplated hereby will not result
in the violation of any material law, statute, rule, regulation, order, writ, injunction, judgment or decree of any court or governmental
authority to or by which the Company is bound, or of any provision of the Articles of Incorporation or By-Laws of the Company,
and will not conflict with, or result in a material breach or violation of, any of the terms or provisions of, or constitute (with
due notice or lapse of time or both) a default under, any lease, loan agreement, mortgage, security agreement, trust indenture
or other agreement or instrument to which the Company is a party or by which it is bound or to which any of its properties or assets
is subject, nor result in the creation or imposition of any lien upon any of the properties or assets of the Company.

 

(b)          No
consent, approval, authorization or other order of any governmental authority is required to be obtained by the Company in connection
with the authorization, execution and delivery of this Agreement or with the authorization, issue and sale of the Units, except
such filings as may be required to be made with the SEC, FINRA, NASDAQ and with any state or foreign blue sky or securities regulatory
authority.

 

2.5           Licenses.
Except as otherwise set forth in the 34 Act Reports, the Company has sufficient licenses, permits and other governmental authorizations
currently required for the conduct of its business or ownership of properties and is in all material respects in compliance therewith.

 

2.6           Litigation.
The Company knows of no pending or threatened legal or governmental proceedings against the Company which could materially adversely
affect the business, property, financial condition or operations of the Company or which materially and adversely questions the
validity of this Agreement or any agreements related to the transactions contemplated hereby or the right of the Company to enter
into any of such agreements, or to consummate the transactions contemplated hereby or thereby. The Company is not a party or subject
to the provisions of any order, writ, injunction, judgment or decree of any court or government agency or instrumentality which
could materially adversely affect the business, property, financial condition or operations of the Company. There is no action,
suit, proceeding or investigation by the Company currently pending in any court or before any arbitrator or that the Company intends
to initiate.

 

2.7           Disclosure.
The information set forth in the Offering Materials as of the date hereof contains no untrue statement of a material fact nor omits
to state a material fact necessary in order to make the statements contained therein, in light of the circumstances under which
they were made, not misleading.

 

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2.8           Investment
Company. The Company is not an “investment company” within the meaning of such term under the Investment Company
Act of 1940, as amended, and the rules and regulations of the SEC thereunder.

 

2.9           Placement
Agent. The Company, in its sole option, may engage, a placement agent to act as agent of the Company in connection with the
transactions contemplated by this Agreement.

 

2.10         Intellectual
Property.

 

(i)          To
the best of its knowledge, the Company owns or possesses sufficient legal rights to all patents, trademarks, service marks, trade
names, copyrights, trade secrets, licenses, information and other proprietary rights and processes necessary for its business as
now conducted and as presently proposed to be conducted, without any known infringement of the rights of others. Except as disclosed
in the 34 Act Reports, there are no material outstanding options, licenses or agreements of any kind relating to the foregoing
proprietary rights, nor is the Company bound by or a party to any material options, licenses or agreements of any kind with respect
to the patents, trademarks, service marks, trade names, copyrights, trade secrets, licenses, information and other proprietary
rights and processes of any other person or entity other than such licenses or agreements arising from the purchase of “off
the shelf” or standard products. The Company has not received any written communications alleging that the Company has violated
or, by conducting its business as presently proposed to be conducted, would violate any of the patents, trademarks, service marks,
trade names, copyrights or trade secrets or other proprietary rights of any other person or entity.

 

(ii)         Except
as disclosed in the 34 Act Reports, the Company is not aware that any of its employees is obligated under any contract (including
licenses, covenants or commitments of any nature) or other agreement, or subject to any judgment, decree or order of any court
or administrative agency, that would interfere with their duties to the Company or that would conflict with the Company’s
business as presently conducted.

 

(iii)        Neither
the execution nor delivery of this Agreement, nor the carrying on of the Company’s business by the employees of the Company,
nor the conduct of the Company’s business as presently conducted, will, to the best of the Company’s knowledge, conflict
with or result in a breach of the terms, conditions or provisions of, or constitute a default under, any contract, covenant or
instrument under which any employee is now obligated.

 

(iv)        To
the best of the Company’s knowledge, no employee of the Company, nor any consultant with whom the Company has contracted,
is in material violation of any term of any employment contract, proprietary information agreement or any other agreement relating
to the right of any such individual to be employed by, or to contract with, the Company because of the nature of the business conducted
by the Company; and to the best of the Company’s knowledge the continued employment by the Company of its present employees,
and the performance of the Company’s contracts with its independent contractors, will not result in any such material violation.
The Company has not received any written notice alleging that any such material violation has occurred. Except as described in
the 34 Act Reports, no employee of the Company has been granted the right to continued employment by the Company or to any compensation
following termination of employment with the Company except for any of the same which would not have a material adverse effect
on the business of the Company.

 

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2.11         Title
to Properties and Assets; Liens, Etc. The Company has good and marketable title to its properties and assets, including the
properties and assets reflected in the most recent balance sheet included in the Financial Statements, and good title to its leasehold
estates, in each case subject to no mortgage, pledge, lien, lease, encumbrance or charge, other than (a) those resulting from taxes
which have not yet become delinquent; (b) liens and encumbrances which do not materially detract from the value of the property
subject thereto or materially impair the operations of the Company; and (c) those that have otherwise arisen in the ordinary course
of business. The Company is in compliance with all material terms of each lease to which it is a party or is otherwise bound.

 

2.12         Obligations
to Related Parties. Except as described in the 34 Act Reports, there are no obligations of the Company to officers, directors,
stockholders, or employees of the Company other than (a) for payment of salary or other compensation for services rendered, (b)
reimbursement for reasonable expenses incurred on behalf of the Company and (c) for other standard employee benefits made generally
available to all employees (including stock option agreements outstanding under any stock option plan approved by the Board of
Directors of the Company). Except as may be disclosed in the 34 Act Reports, the Company is not a guarantor or indemnitor of any
indebtedness of any other person, firm or corporation.

 

2.13         34
Act Reports. The Company has provided the Subscriber with its Annual Report on Form 10-K for the year ended March 31, 2011,
its Form 10-Q for each of the quarters ended June 30, 2011 and September 30, 2011, and subsequent Form 8-Ks, filed with the Securities
and Exchange Commission on since December 31, 2010 (the “34 Act Reports”). No statement of fact made by the Company
in its 34 Act Reports contains any untrue statement of a material fact or omits to state any material fact necessary to make the
statements contained therein not misleading in light of the circumstances under which such statements were made.

 

2.14         Right
of First Refusal. The Subscriber, together with other subscribers in this Offering, will have a right of first refusal on any
equity capital raised (excluding traditional underwritten offerings or strategic transactions) for a period of 180 days following
the closing in that it will be able to subscribe for a dollar amount equal to the percentage of this Offering that it purchased
in this Offering.

 

III.         TERMS
OF SUBSCRIPTION

 

3.1           Notes
and Warrants purchased by the Subscriber pursuant to this Agreement will be prepared for delivery to the Subscriber within 15 business
days following the Closing at which such purchase takes place. The Subscriber hereby authorizes and directs the Company to deliver
the Notes and Warrants purchased by the Subscriber pursuant to this Agreement directly to the Subscriber’s residential or
business address indicated on the signature page hereto.

 

IV.          CONDITIONS
TO OBLIGATIONS OF THE SUBSCRIBERS

 

4.1           The
Subscriber’s obligation to purchase the Units at the Closing at which such purchase is to be consummated is subject to the
fulfillment on or prior to such Closing of the following conditions, which conditions may be waived at the option of each Subscriber
to the extent permitted by law:

 

    	8

    	 

    

 

(a)          Covenants.
All covenants, agreements and conditions contained in this Agreement to be performed by the Company on or prior to the date of
such Closing shall have been performed or complied with in all material respects.

 

(b)          No
Legal Order Pending. There shall not then be in effect any legal or other order enjoining or restraining the transactions contemplated
by this Agreement.

 

(c)          No
Law Prohibiting or Restricting Such Sale. There shall not be in effect any law, rule or regulation prohibiting or restricting
such sale or requiring any consent or approval of any person, which shall not have been obtained, to issue the Securities (except
as otherwise provided in this Agreement).

 

		V.	INTENTIONALLY LEFT BLANK

 

VI.          MISCELLANEOUS

 

6.1           Any
notice or other communication given hereunder shall be deemed sufficient if in writing and sent by registered or certified mail,
return receipt requested, or delivered by hand against written receipt therefore, addressed as follows:

 

if to the
Company, to it at:

 

Global Investor Services,
Inc.

287 East 950 south

Orem, Utah, 84058

Attn: William Kosoff, Acting CFO

 

With a copy to:

 

Fleming PLLC

49 Front Street, Ste. 206

Rockville Center, New York
11570

Attn: Stephen M. Fleming, Esq.

 

if to the Subscriber, to the Subscriber’s
address indicated on the signature page of this Agreement.

 

Notices shall be deemed to have been given
or delivered on the date of mailing, except notices of change of address, which shall be deemed to have been given or delivered
when received.

 

6.2           Except
as otherwise provided herein, this Agreement shall not be changed, modified or amended except by a writing signed by the parties
to be charged, and this Agreement may not be discharged except by performance in accordance with its terms or by a writing signed
by the party to be charged.

 

    	9

    	 

    

 

6.3           This
Agreement shall be binding upon and inure to the benefit of the parties hereto and to their respective heirs, legal representatives,
successors and assigns. This Agreement sets forth the entire agreement and understanding between the parties as to the subject
matter hereof and merges and supersedes all prior discussions, agreements and understandings of any and every nature among them.

 

6.4           Upon
the execution and delivery of this Agreement by the Subscriber, this Agreement shall become a binding obligation of the Subscriber
with respect to the purchase of Units as herein provided, subject, however, to the right hereby reserved by the Company to enter
into the same agreements with other subscribers and to add and/or delete other persons as subscribers.

 

6.5           NOTWITHSTANDING
THE PLACE WHERE THIS AGREEMENT MAY BE EXECUTED BY ANY OF THE PARTIES HERETO, THE PARTIES EXPRESSLY AGREE THAT ALL THE TERMS AND
PROVISIONS HEREOF SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO SUCH
STATE’S PRINCIPLES OF CONFLICTS OF LAW. IN THE EVENT THAT A JUDICIAL PROCEEDING IS NECESSARY, THE SOLE FORUM FOR RESOLVING
DISPUTES ARISING OUT OF OR RELATING TO THIS AGREEMENT IS THE SUPREME COURT OF THE STATE OF NEW YORK IN AND FOR THE COUNTY OF NEW
YORK OR THE FEDERAL COURTS FOR SUCH STATE AND COUNTY, AND ALL RELATED APPELLATE COURTS, THE PARTIES HEREBY IRREVOCABLY CONSENT
TO THE JURISDICTION OF SUCH COURTS AND AGREE TO SAID VENUE.

 

6.6           In
order to discourage frivolous claims the parties agree that unless a claimant in any proceeding arising out of this Agreement succeeds
in establishing his claim and recovering a judgment against another party (regardless of whether such claimant succeeds against
one of the other parties to the action), then the other party shall be entitled to recover from such claimant all of its/their
reasonable legal costs and expenses relating to such proceeding and/or incurred in preparation therefor.

 

6.7           The
holding of any provision of this Agreement to be invalid or unenforceable by a court of competent jurisdiction shall not affect
any other provision of this Agreement, which shall remain in full force and effect. If any provision of this Agreement shall be
declared by a court of competent jurisdiction to be invalid, illegal or incapable of being enforced in whole or in part, such provision
shall be interpreted so as to remain enforceable to the maximum extent permissible consistent with applicable law and the remaining
conditions and provisions or portions thereof shall nevertheless remain in full force and effect and enforceable to the extent
they are valid, legal and enforceable, and no provisions shall be deemed dependent upon any other covenant or provision unless
so expressed herein.

 

6.8           It
is agreed that a waiver by either party of a breach of any provision of this Agreement shall not operate, or be construed, as a
waiver of any subsequent breach by that same party.

 

6.9           The
parties agree to execute and deliver all such further documents, agreements and instruments and take such other and further action
as may be necessary or appropriate to carry out the purposes and intent of this Agreement.

 

6.10         This
Agreement may be executed in two or more counterparts each of which shall be deemed an original, but all of which shall together
constitute one and the same instrument.

 

    	10

    	 

    

 

6.11         Nothing
in this Agreement shall create or be deemed to create any rights in any person or entity not a party to this Agreement, except
(a) for the holders of Registrable Securities.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT
BLANK]

 

    	11

    	 

    

 

VII.         CONFIDENTIAL
INVESTOR QUESTIONNAIRE

 

7.1           The
Subscriber represents and warrants that he, she or it comes within one category marked below, and that for any category marked,
he, she or it has truthfully set forth, where applicable, the factual basis or reason the Subscriber comes within that category.
ALL INFORMATION IN RESPONSE TO THIS SECTION WILL BE KEPT STRICTLY CONFIDENTIAL. The undersigned agrees to furnish any additional
information which the Company deems necessary in order to verify the answers set forth below.

  

	Category A __ 	The undersigned is an individual (not a partnership, corporation, etc.) whose individual net worth, or joint net worth with his or her spouse, presently exceeds $1,000,000.
	 	 
	 	Explanation.  In calculating net worth you may include equity in personal property and real estate, including your principal residence, cash, short-term investments, stock and securities.  Equity in personal property and real estate should be based on the fair market value of such property less debt secured by such property.
	 	 
	Category B  __	The undersigned is an individual (not a partnership, corporation, etc.) who had an income in excess of $200,000 in each of the two most recent years, or joint income with his or her spouse in excess of $300,000 in each of those years (in each case including foreign income, tax exempt income and full amount of capital gains and losses but excluding any income of other family members and any unrealized capital appreciation) and has a reasonable expectation of reaching the same income level in the current year.
	 	 
	Category C  __	The undersigned is a director or executive officer of the Company which is issuing and selling the Securities.
	 	 
	Category D  __	The undersigned is a bank; a savings and loan association; insurance company; registered investment company; registered business development company; licensed small business investment company (“SBIC”); or employee benefit plan within the meaning of Title 1 of ERISA and (a) the investment decision is made by a plan fiduciary which is either a bank, savings and loan association, insurance company or registered investment advisor, or (b) the plan has total assets in excess of $5,000,000 or (c) is a self directed plan with investment decisions made solely by persons that are accredited investors. (describe entity)

 

	 	 
	 	 

 

	 	 
	Category E  __	The undersigned is a private business development company as defined in section 202(a)(22) of the Investment Advisors Act of 1940. (describe entity)

 

	 	 
	 	 

 

	 	 
	Category F __	The undersigned is either a corporation, partnership, Massachusetts business trust, or non-profit organization within the meaning of Section 501(c)(3) of the Internal Revenue Code, in each case not formed for the specific purpose of acquiring the Common Stock and with total assets in excess of $5,000,000. (describe entity)

 

	 	 
	 	 

 

    	12

    	 

    

 

	Category G  __	The undersigned is a trust with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Securities, where the purchase is directed by a “sophisticated investor” as defined in Regulation 506(b)(2)(ii) under the Act.
	 	 
	Category H__	The undersigned is an entity (other than a trust) in which all of the equity owners are “accredited investors” within one or more of the above categories.  If relying upon this Category alone, each equity owner must complete a separate copy of this Agreement.  (describe entity)

 

	 	 
	 	 
	 	 

 

	 	 
	 	The undersigned agrees that the undersigned will notify the Company at any time on or prior to the Closing Date in the event that the representations and warranties in this Agreement shall cease to be true, accurate and complete.

 

7.2          MANNER
IN WHICH TITLE IS TO BE HELD. (circle one)

 

		(a)	Individual Ownership

		(b)	Community Property

		(c)	Joint Tenant with Right of Survivorship (both parties
must sign)

		(d)	Partnership*

		(e)	Tenants in Common

		(f)	Company*

		(g)	Trust*

		(h)	Other*

 

*If Securities are being
subscribed for by an entity, the attached Certificate of Signatory must also be completed.

  

    	13

    	 

    

 

FINRA AFFILIATION.

 

Are you affiliated or associated with an
FINRA member firm (please check one):

 

	Yes	 	 	No	 	 

 

If Yes, please describe:

	 
	 
	 

 

*If Subscriber is a Registered Representative
with an FINRA member firm, have the following acknowledgment signed by the appropriate party:

 

The undersigned FINRA member firm acknowledges
receipt of the notice required by Article 3, Sections 28(a) and (b) of the Rules of Fair Practice.

 

 

		 
	Name of FINRA Member Firm	 
	 	 
	By:	 	 
	Authorized Officer	 
	 	 
	Date:	 	 
	 	 	 	 

 

7.3           The
undersigned is informed of the significance to the Company of the foregoing representations and answers contained in the Confidential
Investor Questionnaire contained in this Article VII and such answers have been provided under the assumption that the Company
will rely on them.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

    	14

    	 

    

 

NUMBER OF UNITS _____  X
$100,000 = _________(the “Purchase Price”)

 

	 	 	 
	Signature	 	Signature (if purchasing jointly)
	 	 	 
	 	 	 
	Name Typed or Printed	 	Name Typed or Printed
	 	 	 
	 	 	 
	Title (if Subscriber is an Entity)	 	Title (if Subscriber is an Entity)
	 	 	 
	 	 	 
	Entity Name (if applicable)	 	Entity Name (if applicable
	 	 	 
	 	 	 
	 	 	 
	Address	 	Address
	 	 	 
	 	 	 
	City, State and Zip Code	 	City, State and Zip Code
	 	 	 
	 	 	 
	Telephone-Business	 	Telephone-Business
	 	 	 
	 	 	 
	Telephone-Residence	 	Telephone-Residence
	 	 	 
	 	 	 
	Facsimile-Business	 	Facsimile-Business
	 	 	 
	 	 	 
	Facsimile-Residence	 	Facsimile-Residence
	 	 	 
	 	 	 
	Tax ID # or Social Security #	 	Tax ID # or Social Security #
	 	 	 
	Name in which securities should be issued:	 	 

 

Dated: March 5, 2012

 

This Subscription Agreement
is agreed to and accepted as of March 5, 2012.

 

	 	GLOBAL INVESTOR SERVICES, INC.
	 	 	 
	 	By:	/s/ William C. Kosoff
	 	Name:  William C. Kosoff
	 	Title: Acting Chief Financial Officer

 

    	15

    	 

    

 

CERTIFICATE OF SIGNATORY

 

(To be completed if Units are

being subscribed for by an entity)

 

I, ____________________________, am the
____________________________ of __________________________________________ (the “Entity”).

 

I certify that I am empowered and duly
authorized by the Entity to execute and carry out the terms of the Subscription Agreement and to purchase and hold the Securities,
and certify further that the Subscription Agreement has been duly and validly executed on behalf of the Entity and constitutes
a legal and binding obligation of the Entity.

 

IN WITNESS WHEREOF, I have set my hand
this ________ day of _________________, 2011

 

	 	 
	 	(Signature)

 

    	16

    	 

    

 

Exhibit A

 

Risks Related to our Business

 

We have a limited operating history,
and therefore there is a high risk of potential business failure unless we can overcome the various obstacles
inherent to an early stage business.

 

We have only limited prior business operations.
Because of our limited operating history, you may not have adequate information on which you can base an evaluation of our business
and prospects. Investors should be aware of the difficulties, delays and expenses normally encountered by an enterprise in its
early stage, many of which are beyond our control, including unanticipated technology development expenses, employment costs, and
administrative expenses. We cannot assure our investors that our proposed business plans as described herein will materialize or
prove successful, or that we will be able to finalize development of our products or operate profitably.

 

We have incurred substantial operating
losses since inception (August 1, 2005) and we may never achieve profitability.

 

From our inception on August 1, 2005 through
September 30, 2011, we have incurred significant cumulative losses a significant portion of which results from the full impairment
of the Goodwill being carried from our acquisitions. As a result of the start-up nature of our business, we expect to continue
to incur substantial expenses. There can be no assurance that we will achieve profitability in the immediate future or at any time.
We do not expect to be profitable through the balance of 2011, during which we will engage primarily in marketing our products.
Our cash balance on September 30, 2011 was $335,334 and our average cash burn for the three months ended September 30, 2011 was
approximately $215,000 per month. As of the date hereof, we have minimal operating capital to continue our business and marketing
initiatives for the next twelve months. As a result, the Company is actively seeking to secure additional working capital through
the sale of its securities or otherwise.

 

Our independent auditors have expressed
substantial doubt about our ability to continue as a going concern.

 

In their audit opinion issued in connection
with our consolidated balance sheets as of March 31, 2011 and our related consolidated statements of operations, stockholders’
equity, and cash flows for the year ended March 31, 2011, our auditors have expressed substantial doubt about our ability to continue
as a going concern given our recurring net losses, negative cash flows from operations and the limited amount of funds on our balance
sheet. We have prepared our financial statements on a going concern basis, which contemplates the realization of assets and the
satisfaction of liabilities and commitments in the normal course of business. The consolidated financial statements do not include
any adjustments that might be necessary should we be unable to continue in existence.

 

    	17

    	 

    

 

Given our historical financial losses
and current financial condition we will need additional financing to execute our business plan for the
fiscal year ending March 31, 2011. Our inability to obtain sufficient additional capital could reduce the value the market currently
places on our common stock.

 

We have no current commitment for such
future funding and there can be no assurance that additional capital will be available on terms acceptable to us, or at all. Selling
additional stock would dilute the equity interests of our stockholders. Further, if we sell stock at a price lower than the conversion
price of the Notes held by the selling stockholders the number of shares of our common stock issuable upon conversion of those
Notes will automatically increase; thereby further diluting the equity interests of our stockholders. If we are unable to secure
additional capital, we will be forced to reduce our investment in development and commercialization efforts, which will impair
our ability to execute our plans. We used cash of $1,173,960 in operating activities for the fiscal year ended March 31, 2011
and, expect to continue this trend in the near future.

 

We may not be able to manage our
growth effectively, which could slow or prevent our ability to achieve profitability.

 

The ability to manage and operate our business
as we execute our development and growth strategy will require effective planning. Significant rapid growth could strain our internal
resources and delay or prevent our efforts to achieve profitability. We expect that our efforts to grow will place a significant
strain on our personnel, management systems, infrastructure and other resources. Our ability to manage future growth effectively
will also require us to successfully attract, train, motivate, retain and manage new employees and continue to update and improve
our operational, financial and management controls and procedures. If we do not manage our growth effectively slower growth is
likely to occur and thereby slowing or negating our ability to achieve and sustain profitability.

 

The industry in which the Company
operates is highly competitive and has low barriers to entry. Increased competition would make profitability even more difficult
to achieve.

 

The Company competes with many providers
of business and financial information including INVESTools, optionsXpress, Bloomberg, S&P’s Capital IQ, Dun &
Bradstreet, Reuters, Standard & Poor’s, Thompson Financial, 10-K Wizard, MSN, Yahoo!, TheStreet.com among others.
Its industry is characterized by low barriers to entry, rapidly changing technology, evolving industry standards, frequent new
product and service introductions and changing customer demands. Many of its existing competitors have longer operating histories,
name recognition, larger customer bases and significantly greater financial, technical and marketing resources than the Company
does. Current competitors or new market entrants could introduce products with features that may render the Company’s products
and services obsolete or uncompetitive. To be competitive and to serve its customers effectively, the Company must respond on a
timely and cost-efficient basis to changes in technology, industry standards and customer preferences. The cost to modify its products,
services or infrastructure in order to adapt to these changes could be substantial and the Company cannot be sure that it will
have the financial resources to fund these expenses. Increased competition could result in reduced operating margins, as well as
a loss of market share and brand recognition. If these events occur, they could have a material adverse effect on the Company’s
revenues.

 

    	18

    	 

    

 

Our business could be negatively
affected by any adverse economic developments in the securities markets and/or the economy in general.

 

We depend on the interest of individuals
in obtaining financial information and securities trading strategies to assist them in making their own investment decisions. Significant
downturns in the securities markets or in general economic conditions may cause individuals to be reluctant to make their own investment
decisions and thus decrease the demand for our products.

 

The Company may encounter risks relating
to security or other system disruptions and failures that could reduce the attractiveness of its sites and that could harm its
business.

 

Although the Company has implemented various
security mechanisms, its business is vulnerable to computer viruses, physical or electronic break-ins and similar disruptions,
which could lead to interruptions, delays or loss of data. For instance, because a portion of its revenue is based on individuals
using credit cards to purchase subscriptions over the Internet and a portion from advertisers who seek to encourage people to use
the Internet to purchase goods or services, the Company’s business could be adversely affected by these break-ins or disruptions.
Additionally, its operations depend on its ability to protect systems against damage from fire, earthquakes, power loss, telecommunications
failure, and other events beyond the Company’s control. Moreover, the Company’s website may experience slower response
times or other problems for a variety of reasons, including hardware and communication line capacity restraints, software failures
or during significant increases in traffic when there have been important business or financial news stories and during the seasonal
periods of peak SEC filing activity. These strains on its systems could cause customer dissatisfaction and could discourage visitors
from becoming paying subscribers. The Company’s websites could experience disruptions or interruptions in service due to
the failure or delay in the transmission or receipt of information from Stockdiagnostics.com. These types of occurrences could
cause users to perceive its website and technology solutions as not functioning properly and cause them to use other methods or
services of its competitors. Any disruption resulting from these actions may harm the Company’s business and may be very
expensive to remedy, may not be fully covered by our insurance and could damage its reputation and discourage new and existing
users from using its products and services. Any disruptions could increase costs and make profitability even more difficult to
achieve.

 

The Company could face liability
and other costs relating to storage and use of personal information about its users.

 

Users provide the Company with personal
information, including credit card information, which it does not share without the user’s consent. Despite this policy of
obtaining consent, however, if third persons were able to penetrate the Company’s network security or otherwise misappropriate
its users’ personal or credit card information, it could be subject to liability, including claims for unauthorized purchases
with credit card information, impersonation or other similar fraud claims, and misuses of personal information, such as for unauthorized
marketing purposes. New privacy legislation may further increase this type of liability. Furthermore, the Company could incur additional
expenses if additional regulations regarding the use of personal information were introduced or if federal or state agencies were
to investigate our privacy practices.

 

    	19

    	 

    

 

 Our future success depends
on retaining our existing key employees and hiring and assimilating new key employees. The loss of key employees or the inability
to attract new key employees could limit our ability to execute our growth strategy, resulting in lost sales and a slower rate
of growth.

 

Our success depends in part on our ability
to retain key employees including our executive officers. Although we have certain employment agreements in effect with our executives,
each executive can terminate his or her agreement generally with 90 days notice. It would be difficult for us to replace any one
of these individuals. In addition, as we grow we will need to hire additional key personnel. We may not be able to identify and
attract high quality employees or successfully assimilate new employees into our existing management structure.

 

Risks Related to the Offering

 

The Conversion price of the Notes
has been arbitrarily determined. 

 

The conversion price of the Secured Convertible
Promissory Notes (the “Notes”) has been determined arbitrarily by the Company.  It does not necessarily bear any
relationship to the Company’s assets value, net worth, revenues or other established criteria of value, and should not be
considered indicative of the actual value of the Shares.  In addition, investors in this Offering will sustain immediate substantial
dilution per share based upon net tangible book value per share.

 

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

 

Volatility in the market price of our common
stock assuming a market develops may prevent you from being able to sell your shares at or above the price you paid for your shares
in this offering. The market price of our common stock could fluctuate for various reasons, which include:

 

	 	•	our quarterly or annual earnings or those of other companies in our industry;

 

	 	•	the public’s reaction to our press releases, our other public announcements and our filings with the U.S. Securities and Exchange Commission, or SEC;

 

	 	•	changes in earnings estimates or recommendations by research analysts who may track our common stock or the stocks of other companies in our industry;

 

	 	•	new laws or regulations or new interpretations of laws or regulations applicable to our business;

 

	 	•	changes in accounting standards, policies, guidance, interpretations or principles;

 

	 	•	changes in general conditions in the U.S. and global economies or financial markets, including those resulting from war, incidents of terrorism or responses to such events;

 

	 	•	litigation involving our company or investigations or audits by regulators into the operations of our company or our competitors; and

 

    	20

    	 

    

 

	 	•	sales of common stock by our directors, executive officers and significant stockholders.

 

In addition, in recent months, the stock
market has experienced extreme price and volume fluctuations. This volatility has had a significant impact on the market price
of securities issued by many companies, including companies in our industry. Changes may occur without regard to the operating
performance of these companies. The price of our common stock could fluctuate based upon factors that have little or nothing to
do with our company. As a result, if you elect to convert the Notes into shares of common stock, you may lose all of your investment.

 

There are restrictions on the transferability
of the Notes and shares of common stock issuable upon conversionof the Notes. 

 

Until registered for resale, investors
must bear the economic risk of an investment in the Notes for an indefinite period of time. Rule 144 promulgated under the Securities
Act (“Rule 144”), which provides for an exemption from the registration requirements under the Securities Act under
certain conditions, requires, among other conditions, a six month holding period prior to the resale (in limited amounts) of securities
acquired in a non-public offering without having to satisfy the registration requirements under the Securities Act as long as such
Company has been fully reporting for a period of 90 days. There can be no assurance that the Company will fulfill any reporting
requirements in the future under the Exchange Act or disseminate to the public any current financial or other information concerning
the Company, as is required by Rule 144 as part of the conditions of its availability

 

You will suffer immediate and substantial
dilution as a result of this offering and may experience additional dilution in the future. 

 

If you purchase Notes in this offering,
you will experience immediate and substantial dilution insofar as the public offering price will be substantially greater than
the tangible book value per share of our outstanding common stock after giving effect to this offering. The exercise of outstanding
options and warrants and any future equity issuances by us will result in further dilution to investors.

 

We will have broad discretion in
applying the net proceeds of this offering and may not use the proceeds in ways that will enhance the market value of our common
stock. 

 

We have broad discretion in applying a
significant portion of the net proceeds we will receive in this offering. As part of your investment decision, you will not be
able to assess or direct how we apply these net proceeds. If we do not apply these funds effectively, we may lose significant business
opportunities. Furthermore, our stock price could decline if the market does not view our use of the net proceeds from this offering
favorably

 

    	21

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