Contract analysis

Section 1.1 — Definitions As used in this Agreement, the following terms shall have the meanings set forth below: "Affiliate" means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with such Person. For purposes of this definition, "control" (including the terms "controlling," "controlled by," and "under common control with") means the po

Section 1.2 — Interpretation Unless the context otherwise requires, the following rules of interpretation shall apply to this Agreement: (a) References to "Sections," "Articles," "Exhibits," and "Schedules" are references to sections and articles of, and exhibits and schedules to, this Agreement, unless otherwise specified. (b) References to this "Agreement" include all Schedules and Exhibits hereto. (c) Words in the

ARTICLE 2 — PURCHASE AND SALE OF NOTES

Section 2.1 — Issuance and Sale of Notes Subject to the terms and conditions of this Agreement, the Company hereby agrees to issue and sell to each Purchaser, and each Purchaser, severally and not jointly, hereby agrees to purchase from the Company, a Note in the principal amount set forth opposite such Purchaser's name on Schedule 1 attached hereto. The aggregate principal amount of all Notes to be issued and sold p

Section 2.2 — Initial Closing (a) The initial closing of the purchase and sale of the Notes (the "Initial Closing") shall take place remotely via the electronic exchange of documents and signatures on [●], 2024 (the "Initial Closing Date"), or at such other time, date, and place as the Company and the Majority Holders may mutually agree in writing. (b) At the Initial Closing, an aggregate of Forty-Five Million Dollar

Section 2.3 — Final Closing (a) An additional closing (the "Final Closing") shall take place no later than following the Initial Closing Date (the "Final Closing Date"), or at such other time, date, and place as the Company and the Majority Holders may mutually agree in writing. (b) At the Final Closing, the remaining Fifteen Million Dollars ($15,000,000) in aggregate principal amount of Notes shall be funded by the

Section 2.4 — Escrow (a) All purchase price amounts payable by the Purchasers in connection with the Initial Closing and the Final Closing shall be deposited into the escrow account maintained by Granite Trust Company, N.A. as Escrow Agent, in accordance with the terms and conditions of the Escrow Agreement. (b) The Escrow Agent shall hold and disburse the escrowed funds in accordance with the Escrow Agreement. Escro

Section 2.5 — Use of Proceeds The Company shall use the proceeds from the sale of the Notes for general corporate purposes, working capital, and product

ARTICLE 3 — CONVERSION OF NOTES

Section 3.1 — Automatic Conversion upon Qualified Financing (a) Trigger. Upon the closing of a Qualified Financing (i.e., an equity financing in which the Company raises at least Eighty Million Dollars ($80,000,000) in aggregate gross proceeds from the issuance of shares of Preferred Stock or equivalent equity securities in a single transaction or series of related transactions), all outstanding principal under each

Section 3.2 — Optional Conversion at Maturity If no Qualified Financing has occurred on or prior to the Maturity Date (January 15, 2026), each Purchaser may elect, by delivering written notice to the Company not less than Business Days prior to the Maturity Date, one of the following: (a) to convert all outstanding principal and accrued and unpaid interest under such Purchaser's Note into shares of the Company's Comm

Section 3.3 — Change of Control (a) If a Change of Control occurs at any time prior to the conversion or repayment of the Notes in full, each Purchaser shall receive, at such Purchaser's election (exercised by written notice to the Company delivered within ten (10) Business Days after receipt of the notice described in Section 3.3(c) below), the greater of: (i) two times (2.0x) the sum of outstanding principal plus a

Section 3.4 — Anti-Dilution and Adjustments The Conversion Price and the Valuation Cap Price shall be appropriately and proportionally adjusted in the event of any stock split, reverse stock split, stock dividend, combination, reorganization, recapitalization, reclassification, or other similar event affecting the outstanding shares of the Company's capital stock. In the event of any such adjustment, the Company shal

Section 3.5 — No Fractional Shares No fractional shares of the Company's capital stock shall be issued upon conversion of any Note. In lieu of any fractional share to which a Purchaser would otherwise be entitled upon conversion, the Company shall pay to such Purchaser an amount in cash (rounded to the nearest cent) equal to the product of (a) such fractional share, multiplied by (b) the applicable Conversion Price o

ARTICLE 4 — REPRESENTATIONS AND WARRANTIES OF THE COMPANY Except as set forth in the Disclosure Schedule delivered by the Company (the "Disclosure Schedule," the sections of which are numbered to correspond to the section numbers of this Article 4, and each of which shall qualify only the correspondingly numbered representation and warranty and any other representation and warranty to the extent the applicability of

Section 4.1 — Organization, Good Standing, and Qualification The Company is a corporation duly incorporated, validly existing, and in good standing under the laws of the State of Delaware (Delaware File Number 6384291). The Company has all requisite corporate power and authority to own, lease, and operate its properties and assets and to carry on its business as presently conducted and as proposed to be conducted. Th

Section 4.2 — Authorization All corporate action on the part of the Company, its Board of Directors, officers, and stockholders necessary for the authorization, execution, and delivery of this Agreement and each other Transaction Document to which the Company is a party, the issuance of the Notes pursuant hereto, the reservation and issuance of the Conversion Shares issuable upon conversion of the Notes, and the perf

Section 4.3 — No Conflicts The execution, delivery, and performance by the Company of this Agreement and each other Transaction Document to which the Company is a party, the issuance of the Notes, the reservation and issuance of the Conversion Shares, and compliance with the provisions hereof and thereof, will not: (a) violate, conflict with, or result in a breach of any provision of, or constitute a default (or an e

Section 4.4 — Capitalization (a) As of the date hereof, the Fully Diluted Capitalization of the Company is approximately 48,500,000 shares, consisting of the following: (i) outstanding shares of Common Stock; (ii) outstanding shares of Series A Preferred Stock (held by Crestpoint Seed Partners, L.P.); (iii) outstanding shares of Series B Preferred Stock (held by Halcyon Growth Equity, L.P.); (iv) outstanding shares o

Section 4.5 — Subsidiaries Except as set forth in Schedule 4.5 of the Disclosure Schedule, the Company does not own, directly or indirectly, any equity interest in, or any interest convertible into or exchangeable or exercisable for any equity interest in, any corporation, partnership, limited liability company, joint venture, or other business entity.

Section 4.6 — Financial Statements (a) The Company has delivered to the Purchasers the following financial statements (collectively, the "Financial Statements"): (i) the audited consolidated balance sheet of the Company as of December 31, 2022, and the related audited consolidated statements of operations, changes in stockholders' equity (deficit), and cash flows for the fiscal year then ended, together with the note

Section 4.7 — Absence of Changes Since September 30, 2023: (a) there has been no event, change, effect, development, condition, occurrence, or circumstance that has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect; (b) the Company has conducted its business in the ordinary course of business, consistent with past practice in all material respects, and has not ta

Section 4.8 — Litigation Except as set forth in Schedule 4.8 of the Disclosure Schedule, there is no action, suit, claim, proceeding, arbitration, mediation, or investigation pending or, to the Company's Knowledge, threatened against the Company, any of its directors or officers (in their capacity as such), or any of its properties or assets, before any Governmental Authority, that (a) would reasonably be expected to

Section 4.9 — Intellectual Property (a) The Company owns, or has valid and enforceable rights to use (pursuant to written license agreements or otherwise), all intellectual Property that is necessary for the conduct of its business as currently conducted and as proposed to be conducted, free and clear of all Liens other than Permitted Liens. (b) Schedule 4.9 of the Disclosure Schedule sets forth a complete and accura

Section 4.10 — Compliance with Laws (a) The Company is, and since its inception has been, in material compliance with all applicable federal, state, local, and foreign laws, rules, regulations, ordinances, orders, judgments, and decrees applicable to the Company and the conduct of its business, including all applicable money transmission laws, state licensing requirements, consumer financial protection laws, and anti

Section 4.11 — Tax Matters (a) The Company has timely filed (taking into account any applicable extensions) all income tax returns and all other material tax returns required to be filed by it with any Governmental Authority. All such tax returns are true, correct, and complete in all material respects. The Company has timely paid all taxes (whether or not reflected on any tax return) due and owing by it to any Gover

Section 4.12 — Employee Matters (a) As of the date hereof, the Company has approximately three hundred ten (310) full-time equivalent employees. (b) The Company is in material compliance with all applicable federal, state, local, and foreign laws relating to employment and employment practices, including laws relating to wages, hours, overtime, worker classification, discrimination, harassment, retaliation, immigrati

Section 4.13 — Insurance The Company maintains insurance policies of the types and in the amounts customary for companies of similar size, stage, and industry, including directors' and officers' liability insurance, errors and omissions insurance, cyber liability insurance, and general commercial liability insurance. All such insurance policies are in full force and effect, and no claim has been made under any such p

Section 4.14 — Material Contracts (a) Schedule 4.14 of the Disclosure Schedule sets forth a complete and accurate list of all contracts, agreements, and commitments that are material to the Company's business ("Material Contracts"), including all contracts involving aggregate consideration in excess of Five Hundred Thousand Dollars ($500,000) per annum, all contracts with Key Persons, all contracts with any Affiliate

Section 4.15 — Existing Indebtedness Except for (a) the Existing Debt (outstanding principal of Fifteen Million Dollars ($15,000,000) under the Kelvantis Loan Agreement, maturing August 15, 2025) and (b) the indebtedness set forth in Schedule 4.15 of the Disclosure Schedule, the Company has no outstanding indebtedness for borrowed money, whether secured or unsecured, and has not guaranteed any indebtedness of any oth

Section 4.16 — Offering Valid Assuming the accuracy of the representations and warranties of the Purchasers set forth in Article 7, the offer, sale, and issuance of the Notes as contemplated by this Agreement, and the issuance of the Conversion Shares upon conversion of the Notes, are and will be exempt from the registration requirements of the Securities Act by reason of Section 4(a)(2) thereof and Rule 506(b) of Re

Section 4.17 — No Brokers The Company has not engaged, and is not obligated to pay any fee or commission to, any broker, finder, investment banker, financial advisor, or other intermediary in connection with the transactions contemplated by this Agreement.

Section 4.18 — Data Privacy and Security (a) The Company is in material compliance with all applicable federal, state, local, and foreign data privacy and data security laws, rules, and regulations, including the California Consumer Privacy Act (as amended by the California Privacy Rights Act), the Gramm-Leach-Bliley Act, and, to the extent applicable, the General Data Protection Regulation, and with the Company's ow

Section 4.19 — Anti-Corruption The Company, its directors, officers, employees, and, to the Company's Knowledge, its agents and representatives, are and have been in compliance with all applicable anti-corruption and anti-bribery laws, including the U.S. Foreign Corrupt Practices Act of 1977, as amended. Neither the Company nor, to the Company's Knowledge, any of its directors, officers, employees, agents, or represe

Section 4.20 — Full Disclosure No representation or warranty of the Company contained in this Agreement or any other Transaction Document, and no information contained in the Disclosure Schedule or any certificate, document, or instrument delivered or to be delivered by or on behalf of the Company in connection with the transactions contemplated hereby, contains or will contain any untrue statement of a material fact

ARTICLE 5 — COVENANTS OF THE COMPANY The Company hereby covenants and agrees with each Purchaser as follows:

Section 5.1 — Reservation of Shares The Company shall at all times, from and after the date hereof and for so long as any Notes remain outstanding, reserve and keep available out of its authorized but unissued shares of capital stock a sufficient number of shares of capital stock for the purpose of effecting the conversion of all outstanding Notes in full (including all accrued and unpaid interest thereon), assuming

Section 5.2 — Financial Reporting; Information Rights (a) The Company shall deliver to each Purchaser (so long as such Purchaser holds a Note or Conversion Shares): (i) within days after the end of each fiscal quarter (other than the fourth fiscal quarter), unaudited consolidated financial statements of the Company for such fiscal quarter, consisting of a balance sheet, statement of operations, and statement of cash

Section 5.3 — Corporate Existence The Company shall maintain its corporate existence and good standing under the laws of the State of Delaware and each other jurisdiction in which it is qualified to do business for so long as any Notes remain outstanding. The Company shall not dissolve, liquidate, or wind up its affairs except in connection with a Change of Control or as otherwise permitted under this Agreement.

Section 5.4 — Compliance with Laws The Company shall comply in all material respects with all applicable federal, state, local, and foreign laws, rules, regulations, ordinances, orders, judgments, and decrees applicable to the Company and the conduct of its business, including all applicable money transmission laws, state licensing requirements, consumer financial protection laws, data privacy laws, and anti-money la

Section 5.5 — Notification The Company shall promptly (and in any event within five (5) Business Days) notify the Majority Holders in writing upon becoming aware of any of the following: (a) any event, change, effect, development, condition, occurrence, or circumstance that has had or would