PART II AND III

	UNITED STATES SECURITIES AND EXCHANGE COMMISSION
	Washington, D.C. 20549
FORM 1-A
REGULATION A OFFERING STATEMENT UNDER THE SECURITIES ACT OF 1933

No changes to the information required by Part I have occurred since the last filing of this offering statement.

ITEM 1.	Issuer Information
Exact name of issuer as specified in the issuer’s charter:			Apex Farms Corp.
Jurisdiction of incorporation/organization:			Nevada
Year of incorporation:			2017
CIK:			0001729481
Primary Standard Industrial Classification Code:			3590
I.R.S. Employer Identification Number:			82-2923032
Total number of full-time employees:			1
Total number of part-time employees:		1

Contact Information
Address of Principal Executive Offices:        501 Silverside Road, PMB #352, Wilmington, DE 19809
Telephone:	(302) 307-3668
Provide the following information for the person the Securities and Exchange Commission’s staff should call in connection with any pre-qualification review of the offering statement:
Name:	Alexander M. Woods-Leo
Address:	501 Silverside Road, PMB #352, Wilmington, DE 19809
Telephone:	(302) 307-3668

Provide up to two e-mail addresses to which the Securities and Exchange Commission’s staff may send any comment letters relating to the offering statement. After qualification of the offering statement, such e-mail addresses are not required to remain active:
1. alex@apexfarming.com
2. lou@bevilacquapllc.com
Financial Statements
Industry Group (select one):	Banking		Insurance	X	Other
Use the financial statements for the most recent fiscal period contained in this offering statement to provide the following information about the issuer. The following table does not include all of the line items from the financial statements. Long Term Debt would include notes payable, bonds, mortgages, and similar obligations. To determine “Total Revenues” for all companies selecting “Other” for their industry group, refer to Article 5-03(b)(1) of Regulation S-X. For companies selecting “Insurance,” refer to Article 7-04 of Regulation S-X for calculation of “Total Revenues” and paragraphs 5 and 7(a) for “Costs and Expenses Applicable to Revenues”.
Balance Sheet Information
Cash and Cash Equivalents:		$13,947
Investment Securities:		$0
Accounts and Notes Receivable:		$0
Property, Plant and Equipment (PP&E):		$3,325
Total Assets:		$58,272
Accounts Payable and Accrued Liabilities:		$53,893
Long Term Debt:		$0
Total Liabilities:		$64,043
Total Stockholders’ Equity:		$-5,771
Total Liabilities and Equity:		$58,272
Income Statement Information
Total Revenues:		$7,500
Costs and Expenses Applicable to Revenues:		$77,027
Depreciation and Amortization:		$175
Net Income:		$-533,630
Earnings Per Share – Basic:		$-0.04
Earnings Per Share – Diluted:		$-0.04

Name of Auditor (if any): M&K CPAS, PLLC

Outstanding Securities

	Name of Class (if any)	Units Outstanding	CUSIP (if any)	Name of Trading Center or Quotation Medium (if any)
Common Equity	Common Stock	21,764,612	n/a	n/a
Preferred Equity	n/a	0	n/a	n/a
Debt Securities	n/a	0	n/a	n/a
ITEM 2.	Issuer Eligibility
X	Check this box to certify that all of the following statements are true for the issuer(s):
•	Organized under the laws of the United States or Canada, or any State, Province, Territory or possession thereof, or the District of Columbia.
•	Principal place of business is in the United States or Canada.
•	Not subject to Section 13 or 15(d) of the Securities Exchange Act of 1934.
•	Not a development stage company that either (a) has no specific business plan or purpose, or (b) has indicated that its business plan is to merge with an unidentified company or companies.
•	Not an investment company registered or required to be registered under the Investment Company Act of 1940.
•	Not issuing fractional undivided interests in oil or gas rights, or a similar interest in other mineral rights.
•	Not issuing asset-backed securities as defined in Item 1101(c) of Regulation AB.
•	Not, and has not been, subject to any order of the Commission entered pursuant to Section 12(j) of the Exchange Act (15 U.S.C. 78l(j)) within five years before the filing of this offering statement.
•	Has filed with the Commission all the reports it was required to file, if any, pursuant to Rule 257 during the two years immediately before the filing of the offering statement (or for such shorter period that the issuer was required to file such reports).

ITEM 3.		Application of Rule 262
X	Check this box to certify that, as of the time of this filing, each person described in Rule 262 of Regulation A is either
not disqualified under that rule or is disqualified but has received a waiver of such disqualification
	Check this box if “bad actor” disclosure under Rule 262(d) is provided in Part II of the offering statement.

ITEM 4.		Summary Information Regarding the Offering and Other Current or Proposed Offerings
Check the appropriate box to indicate whether you are conducting a Tier 1 or Tier 2 offering:
	Tier 1		X	Tier 2
Check the appropriate box to indicate whether the annual financial statements have been audited:
	Unaudited		X	Audited
Types of Securities Offered in this Offering Statement (select all that apply):
	X	Equity (common or preferred stock)
		Debt
		Option, warrant or other right to acquire another security
		Security to be acquired upon exercise of option, warrant or other right to acquire security
		Tenant-in-common securities
		Other (describe)

Does the issuer intend to offer the securities on a delayed or continuous basis pursuant to Rule 251(d)(3)?
Yes	X	No
Does the issuer intend this offering to last more than one year?
Yes		No	X
Does the issuer intend to price this offering after qualification pursuant to Rule 253(b)?
Yes		No	X
Will the issuer be conducting a best efforts offering?
Yes	X	No
Has the issuer used solicitation of interest communications in connection with the proposed offering?
Yes	X	No
Does the proposed offering involve the resale of securities by affiliates of the issuer?
Yes		No	X

Number of securities offered:	5,000,000
Number of securities of that class already outstanding:	21,764,612
The information called for by this item below may be omitted if undetermined at the time of filing or submission, except that if a price range has been included in the offering statement, the midpoint of that range must be used to respond. Please refer to Rule 251(a) for the definition of “aggregate offering price” or “aggregate sales” as used in this item. Please leave the field blank if undetermined at this time and include a zero if a particular item is not applicable to the offering.

Price per security:
$	0.20
The portion of the aggregate offering price attributable to securities being offered on behalf of the issuer:
$	1,000,000
The portion of the aggregate offering price attributable to securities being offered on behalf of selling securityholders:
$	0
The portion of aggregate offering attributable to all the securities of the issuer sold pursuant to a qualified offering statement within the 12 months before the qualification of this offering statement:
$	0
The estimated portion of aggregate sales attributable to securities that may be sold pursuant to any other qualified offering
statement concurrently with securities being sold under this offering statement:
$	0
Total: $ 1,000,000  (the sum of the aggregate offering price and aggregate sales in the four preceding paragraphs).
Anticipated fees in connection with this offering and names of service providers:

	Name of Service Provider	Fees
Underwriters:		$
Sales Commissions:		$
Finder’s Fees:		$
Audit:	M&K CPAS, PLLC	$	$12,500
Legal:	BEVILACQUA PLLC	$	$63,000
Promoters:		$
Blue Sky Compliance:		$

CRD Number of any broker or dealer listed:			n/a
Estimated net proceeds to the issuer:	$	800,137
Clarification of responses (if necessary):

ITEM 5.	Jurisdictions in Which Securities are to be Offered
Using the list below, select the jurisdictions in which the issuer intends to offer the securities:

	Jurisdiction	Code		Jurisdiction	Code		Jurisdiction	Code
X	Alabama	AL	X	Montana	MT	X	District of Columbia	DC
X	Alaska	AK	X	Nebraska	NE	X	Puerto Rico	PR
X	Arizona	AZ	X	Nevada	NV
X	Arkansas	AR	X	New Hampshire	NH	X	Alberta	A0
X	California	CA	X	New Jersey	NJ	X	British Columbia	A1
X	Colorado	CO	X	New Mexico	NM	X	Manitoba	A2
X	Connecticut	CT	X	New York	NY	X	New Brunswick	A3
X	Delaware	DE	X	North Carolina	NC	X	Newfoundland	A4
X	Florida	FL	X	North Dakota	ND	X	Nova Scotia	A5
X	Georgia	GA	X	Ohio	OH	X	Ontario	A6
X	Hawaii	HI	X	Oklahoma	OK	X	Prince Edward Island	A7
X	Idaho	ID	X	Oregon	OR	X	Quebec	A8
X	Illinois	IL	X	Pennsylvania	PA	X	Saskatchewan	A9
X	Indiana	IN	X	Rhode Island	RI	X	Yukon	B0
X	Iowa	IA	X	South Carolina	SC	X	Canada (Federal Level)	Z4
X	Kansas	KS	X	South Dakota	SD
X	Kentucky	KY	X	Tennessee	TN
X	Louisiana	LA	X	Texas	TX
X	Maine	ME	X	Utah	UT
X	Maryland	MD	X	Vermont	VT
X	Massachusetts	MA	X	Virginia	VA
X	Michigan	MI	X	Washington	WA
X	Minnesota	MN	X	West Virginia	WV
X	Mississippi	MS	X	Wisconsin	WI
X	Missouri	MO	X	Wyoming	WY

Using the list below, select the jurisdictions in which the securities are to be offered by underwriters, dealers or sales persons or check the appropriate box:
X	None
	Same as the jurisdictions in which the issuer intends to offer the securities.

Jurisdiction	Code	Jurisdiction	Code	Jurisdiction	Code
Alabama	AL	Montana	MT	District of Columbia	DC
Alaska	AK	Nebraska	NE	Puerto Rico	PR
Arizona	AZ	Nevada	NV
Arkansas	AR	New Hampshire	NH	Alberta	A0
California	CA	New Jersey	NJ	British Columbia	A1
Colorado	CO	New Mexico	NM	Manitoba	A2
Connecticut	CT	New York	NY	New Brunswick	A3
Delaware	DE	North Carolina	NC	Newfoundland	A4
Florida	FL	North Dakota	ND	Nova Scotia	A5
Georgia	GA	Ohio	OH	Ontario	A6
Hawaii	HI	Oklahoma	OK	Prince Edward Island	A7
Idaho	ID	Oregon	OR	Quebec	A8
Illinois	IL	Pennsylvania	PA	Saskatchewan	A9
Indiana	IN	Rhode Island	RI	Yukon	B0
Iowa	IA	South Carolina	SC	Canada (Federal Level)	Z4
Kansas	KS	South Dakota	SD
Kentucky	KY	Tennessee	TN
Louisiana	LA	Texas	TX
Maine	ME	Utah	UT
Maryland	MD	Vermont	VT
Massachusetts	MA	Virginia	VA
Michigan	MI	Washington	WA
Minnesota	MN	West Virginia	WV
Mississippi	MS	Wisconsin	WI
Missouri	MO	Wyoming	WY

ITEM 6.		Unregistered Securities Issued or Sold Within One Year
	None
As to any unregistered securities issued by the issuer or any of its predecessors or affiliated issuers within one year before the filing of this Form 1-A, state:
(a)	Name of such issuer.
	Apex Farms Corp.
(b)	(1) Title of securities issued
	Common Stock
	(2) Total amount of such securities issued
	16,924,057
	(3) Amount of such securities sold by or for the account of any person who at the time was a director, officer, promoter or principal securityholder of the issuer of such securities, or was an underwriter of any securities of such issuer
	0
(c)	(1) Aggregate consideration for which the securities were issued and basis for computing the amount thereof.
	$1,000 and Services and other non-cash consideration.
	(2) Aggregate consideration for which the securities listed in (b)(3) of this item (if any) were issued and the basis for computing the amount thereof (if different from the basis described in (c)(1)).

(a)	Name of such issuer.
	Apex Farms Corp.
(b)	(1) Title of securities issued
	Series Seed Preferred Stock
	(2) Total amount of such securities issued
	3,011,469
	(3) Amount of such securities sold by or for the account of any person who at the time was a director, officer, promoter or principal securityholder of the issuer of such securities, or was an underwriter of any securities of such issuer
	0
(c)	(1) Aggregate consideration for which the securities were issued and basis for computing the amount thereof.
	$206,669.44
	(2) Aggregate consideration for which the securities listed in (b)(3) of this item (if any) were issued and the basis for computing the amount thereof (if different from the basis described in (c)(1)).

(d)	Indicate the section of the Securities Act or Commission rule or regulation relied upon for exemption from the registration requirements of such Act and state briefly the facts relied upon for such exemption:
	4(a)(2) for Common Stock and 4(a)(6), Regulation CF, for Series Seed Preferred Stock

Post-Qualification Offering Circular Amendment No. 1

File No. 024-10856

This Post-Qualification Offering Circular Amendment No. 1 amends the Offering Circular of Apex Farms Corp. qualified on September 12, 2018 to add, update and/or replace information contained in the Offering Circular.

Preliminary Offering Circular, Dated May 15, 2019

AN OFFERING STATEMENT PURSUANT TO REGULATION A RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.  INFORMATION CONTAINED IN THIS PRELIMINARY OFFERING CIRCULAR IS SUBJECT TO COMPLETION OR AMENDMENT. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED BEFORE THE OFFERING STATEMENT FILED WITH THE COMMISSION IS QUALIFIED.  THIS PRELIMINARY OFFERING CIRCULAR SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR MAY THERE BE ANY SALES OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL BEFORE REGISTRATION OR QUALIFICATION UNDER THE LAWS OF ANY SUCH STATE.  WE MAY ELECT TO SATISFY OUR OBLIGATION TO DELIVER A FINAL OFFERING CIRCULAR BY SENDING YOU A NOTICE WITHIN TWO BUSINESS DAYS AFTER THE COMPLETION OF OUR SALE TO YOU THAT CONTAINS THE URL WHERE THE OFFERING CIRCULAR WAS FILED MAY BE OBTAINED.

 

APEX FARMS CORP.

1105 Monterey Place

Wilmington, DE 19809

(302) 307-3668; www.apexfarming.com

Best Efforts Offering of up to 5,000,000 Shares of Common Stock

This is the initial public offering of securities of Apex Farms Corp., a Nevada corporation (“we,” “us,” “our” or “our company”).  We are offering up to 5,000,000 shares of common stock at an offering price of $0.20 per share for aggregate maximum gross proceeds of $1,000,000. There is no minimum number of shares that must be sold in order to close this offering. See the sections entitled “Plan of Distribution” beginning on page 17 and “Securities Being Offered” beginning on page 35.

This is our initial public offering and no public market currently exists for our stock. The offering price may not reflect the market price of our stock after this offering. Our common stock is not listed for trading on any exchange or automated quotation system. We intend to engage a market maker to apply for quotation on one of the tiers of the OTC Markets (the “OTC Market”). There can be no assurance that such an application for quotation will be approved.

We commenced this offering on September 12, 2018 upon qualification of this offering by the Securities and Exchange Commission (the “SEC”). As of the date of this offering circular, we have sold 956,844 shares for gross proceeds of $191,368.80.

This offering will terminate at the earlier of: (1) the date on which the maximum offering amount has been sold, (2) the date which is one year after this offering has been qualified by the SEC, or (3) the date on which this offering is earlier terminated by us in our sole discretion.

This offering is being conducted on a “best efforts” basis pursuant to Regulation A of Section 3(b) of the Securities Act of 1933, as amended (the “Securities Act”), for Tier 2 offerings and there is no minimum offering amount. We have engaged Prime Trust, LLC as an escrow agent to hold funds tendered by investors. We may hold a series of closings at which we

receive the funds from the escrow agent and issue the shares to investors. See the sections entitled “Plan of Distribution” and “Securities Being Offered” for a description of our capital stock.

		Price to Public(1)		Underwriting Discount and Commissions(2)		Proceeds to Issuer(3)		Proceeds to Other Persons
Per share	$	0.20	$	0.00	$	0.20	$	0.00
Total Maximum	$	1,000,000	$	0.00	$	1,000,000	$	0.00

(1)We do not intend to use commissioned sales agents or underwriters. 

(2)The amounts shown are before deducting organization and offering costs to us, which include legal, accounting, printing, due diligence, marketing, consulting, selling and other costs incurred in this offering. We have entered into an agreement with StartEngine Crowdfunding, Inc., which has agreed to host our offering on their online platform, StartEngine.com, in consideration for a $50.00 cash fee per investor and five year warrants to purchase our common stock. See the section entitled “Plan of Distribution.” 

We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act (the “JOBS Act”) and, as such, may elect to comply with certain reduced reporting requirements for this offering circular and future filings after this offering.

Investing in this offering involves a high degree of risk, and you should not invest unless you can afford to lose your entire investment. See the section entitled “Risk Factors” beginning on page 5 for a discussion of certain risks that you should consider in connection with an investment in our securities.

Generally, no sale may be made to you in this offering if the aggregate purchase price you pay is more than 10% of the greater of your annual income or your net worth. Different rules apply to accredited investors and non-natural persons. Before making any representation that your investment does not exceed applicable thresholds, we encourage you to review Rule 251(d)(2)(i)(C) of Regulation A. For general information on investing, we encourage you to refer to www.investor.gov.

THE U.S. SECURITIES AND EXCHANGE COMMISSION DOES NOT PASS UPON THE MERITS OF OR GIVE ITS APPROVAL TO ANY SECURITIES OFFERED OR THE TERMS OF THE OFFERING, NOR DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF ANY OFFERING CIRCULAR OR OTHER SOLICITATION MATERIALS. THESE SECURITIES ARE OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION WITH THE COMMISSION; HOWEVER, THE COMMISSION HAS NOT MADE AN INDEPENDENT DETERMINATION THAT THE SECURITIES OFFERED ARE EXEMPT FROM REGISTRATION.

This offering circular is following the offering circular format described in Part II (a)(1)(i) of Form 1-A.

TABLE OF CONTENTS

THIS OFFERING CIRCULAR MAY CONTAIN FORWARD-LOOKING STATEMENTS AND INFORMATION RELATING TO, AMONG OTHER THINGS, THE COMPANY, ITS BUSINESS PLAN AND STRATEGY, AND ITS INDUSTRY. THESE FORWARD-LOOKING STATEMENTS ARE BASED ON THE BELIEFS OF, ASSUMPTIONS MADE BY, AND INFORMATION CURRENTLY AVAILABLE TO THE COMPANY’S MANAGEMENT. WHEN USED IN THE OFFERING MATERIALS, THE WORDS “ESTIMATE,” “PROJECT,” “BELIEVE,” “ANTICIPATE,” “INTEND,” “EXPECT” AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS. THESE STATEMENTS REFLECT MANAGEMENT’S CURRENT VIEWS WITH RESPECT TO FUTURE EVENTS AND ARE SUBJECT TO RISKS AND UNCERTAINTIES THAT COULD CAUSE THE COMPANY’S ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTAINED IN THE FORWARD-LOOKING STATEMENTS. INVESTORS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE ON WHICH THEY ARE MADE.

We are offering to sell, and seeking offers to buy, our securities only in jurisdictions where such offers and sales are permitted. You should rely only on the information contained in this offering circular. We have not authorized anyone to provide you with any information other than the information contained in this offering circular. The information contained in this offering circular is accurate only as of its date, regardless of the time of its delivery or of any sale or delivery of our securities. Neither the delivery of this offering circular nor any sale or delivery of our securities shall, under any circumstances, imply that there has been no change in our affairs since the date of this offering circular. This offering circular will be updated and made available for delivery to the extent required by the federal securities laws.

SUMMARY

This summary highlights information contained elsewhere in this offering circular. This summary does not contain all of the information that you should consider before deciding to invest in our securities. You should read this entire offering circular carefully, including the “Risk Factors” section, our historical financial statements and the notes thereto, each included elsewhere in this offering circular.

OUR COMPANY

Overview

We are a vertical farming technology company with what we believe to be a unique vertical farming system that uses patented technology to allow farmers to grow up to 10 times more produce in a given area than they would be able to grow without our system based upon our testing. The vertical hydroponic system, meaning plants are grown without soil by exposing roots to mineral nutrient solutions in a water solvent, aims to reduce expenses associated with energy, water, space, and labor. Our system has been tested by our founder and CEO for over 3 years and such testing has shown that our system can reduce water usage both indoors and outdoors by over 85% compared to farming without our system. Furthermore, unlike most of our competitor’s systems, our system is effective both indoors and outdoors.  Our system is also fully scalable and allows farmers to maximize their space with the ability to grow everything but trees. We plan to sell our proprietary vertical growing systems to farmers and produce growers who wish to establish a higher produce sales yields. We plan to assemble all of our systems on and off site and utilize bulk sourced materials from outsourced manufacturers.

We plan to either sell or license our systems to our future customers. Purchasers of our systems will receive installation service and we will offer support services. We will employ and engage as contractors experienced construction workers to make sure the system is constructed properly. Once the system is constructed, we will perform a final test on the system to make sure everything is in working order, and that the customer is satisfied with the quality of the system.  Alternatively, our clients will be able to license our system and receive technical support and maintenance services from us. Licensing rights are available for one and two-year terms, with options for renewal. Additionally, we plan to provide a senior level consultant to assist farmers in the operation and maintenance of the system. It is our goal to help the customer from start to finish, including everything from assessing the proper contract, finding the right construction crews, and troubleshooting any issues that might come up.

We also plan to acquire or lease our own land and build our own vertical farms and sell produce.  In addition, we plan to offer landowners joint venture opportunities where we can establish and maintain farms on the land of others and provide them with profit sharing opportunities.

We also plan to provide farmers networking services to help them identify local restaurants, wholesale distribution, and even floral shops to distribute their produce.

Our Industry

According to Global Market Insights, Inc., the global vertical farming market is expected to grow at a compound annual growth rate of 27%, from $2 billion in 2017 to over $13 billion by 2024. Growth in vertical farming is being driven by low labor costs, the proximity of vertical farms to consumer bases, accessibility to fresh produce, and the lack of pesticide usage.

The three main segments of vertical farming are hydroponics (the process of growing plants in sand, gravel, or liquid, with added nutrients but without soil), aeroponics (the process of growing plants in an air or mist environment without the use of soil), and aquaponics (waste produced by farmed fish or other aquatic animals supplies nutrients for plants grown hydroponically, which in turn purifies the water). While hydroponics technology is expected to continue to dominate the market over the next few years, aeroponics and aquaponics are expected to show rapid growth due to the lower water usage of the former and the rising adoption of the latter by small-scale systems due to cost benefits.

Vertical farming has grown at a rapid pace in Asia-Pacific due to declining food self-sufficiency and arable lands in Singapore, China, and Japan. The Asia-Pacific vertical farming market is expected to reach $4 billion by 2024. Much of this growth will be due to Asian governments’ support of indoor agriculture ranging from national policy initiatives to subsidies.

1

As of November 2017, over $700 million had been invested in the agriculture (“ag”) technology space, and funding was on track to beat the previous two years combined. The largest increase was in venture capital interest in the space, which nearly doubled in 2017 from 2016.

Our Product

The Apex Vertical Farming System is comprised of one reservoir, one water pump, and multiple rows of cylindrical pipes used to flow nutrient-rich water for growing plants. The rows are stacked to reduce overall land, water, and energy usage but are fully accessible for harvesting from the ground – no need for conveyor belts, scaffolding, or complex machinery. Effective for both indoor and outdoor use, the system can be scaled to accommodate different sized plants and root systems.  

Currently we have a commercial product liability insurance policy that allows us to grow produce and sell products commercially anywhere in the United States. We retain the right to sell, license, or enter into joint ventures with our proprietary technology.

Our Supply Chain and Customer Base

Raw materials essential to our businesses are purchased worldwide in the ordinary course of business from numerous suppliers. These raw materials consist mainly of wood and polymerizing vinyl chloride tubing. We also acquire seeds to grow crops in instances where we own and operate a company farm or operate and maintain a farm for a third party.  In general, these materials are available from multiple sources.

Our potential customers are farmers, grocery stores, wholesale distribution networks, and residential customers interested in converting their extra yard space into a growing area.

Our Competition

Our primary competitors are AeroFarms, Freight Farms, BrightFarms, and Edenworks. The following is a description of each competitor.

AeroFarms®: Founded in 2004, AeroFarms is an indoor agriculture group that uses aeroponics, LED lights, and growth algorithms. Its patented aeroponics growing system is a closed-loop system that does not use natural light or soil. The company claims the system uses 95% less water than field farming and 40% less than hydroponics. AeroFarms closed a $40 million Series D round in October 2017 with participation from IKEA Group, David Chang of the Momofuku Group, and retired U.S. Army General David Petraeus, bringing its total funding to over $130 million. The company just completed its ninth indoor farm in New Jersey and plans add to its 120-strong team of plant biologists, pathologists, microbiologists, mechanical engineers, system engineers, data scientists, and more.

Freight Farms: Launched in 2010, Freight Farms provides physical and digital solutions for creating local produce ecosystems. The company’s flagship product, The Leafy Green Machine™, is a complete hydroponic growing system capable of producing a variety of lettuces, herbs, and hearty greens. Assembled inside an upcycled shipping container, the prebuilt system includes all necessary components for commercial food production and enables anyone to grow fresh produce year- round. Leafy Green Machines can be monitored in real time from any location, and users can purchase supplies directly from their mobile devices. Freight Farms completed a $7.3 million Series B round in June 2017 with participation from Spark Capital. As of December 2017, the company has sold over 160 Leafy Green Machines.

BrightFarms: BrightFarms designs, finances, builds, and operates hydroponic greenhouses at, or near, grocery retailers ─ cutting time, distance, and cost from the produce supply chain. Founded in 2011, the company claims its system uses 80% less water, 90% less land, and 95% less shipping fuel than long-distance field-grown produce. The company currently has three farms located in Illinois, Virginia, and Pennsylvania and is in the process of opening a new location in Ohio. In September 2016, BrightFarms announced it had raised $30 million in Series C funding with participation from Catalyst Ventures.

Edenworks: Founded in 2013, Edenworks is creating a scalable local food supply. It operates aquaponic ecosystems that it claims use 95% less water than conventional farms, no pesticides, and no genetically modified organisms. The Brooklyn-based company services the local Whole Foods with two varietals of microgreens. As of June 2017, Edenworks had raised $2.5 million in funding with plans to move to a larger facility and roll out additional product lines.

2

Currently there are several vertical, hydroponics companies in the market. However, we believe our system is logistically affordable while still delivering a competitive harvest and offering what we believe is a significant reduction of water and energy usage compared to conventional farming methods.

Our Competitive Advantages

We believe that the following characteristics of our system provide us with a competitive advantage:

·our system allows users to grow both root-based plants and vine plants, while most competing systems do not allow for growth of root-based plants; 

·our system is scalable for both indoor and outdoor use; 

·our system is low-cost compared to competing systems; and 

·our system can be used for both commercial and residential use. 

Our Growth Strategies

We intend to launch a consumer-based version of the Apex Vertical Farming System before the end of the second calendar quarter of 2019. We also intend to establish a farm using our system in Wilmington, Delaware on a residential property on or before the end of 2019. In addition, on December 31, 2017, we entered a Lease with Option to Purchase with Robert J. Wyatt, pursuant to which Mr. Wyatt leased to us certain real property located in the County of Pueblo, Colorado, consisting of approximately 40 acres and we intend to establish a farm on this property. We expect to hire sales representatives who we can train to help us sell our vertical farming systems.  We also plan to focus on developing marketing and sales strategies and sourcing the capital necessary to execute our business plan.

Going Concern

Our independent auditor has expressed substantial doubt about our ability to continue as a going concern given our lack of operating history and the fact to date have had limited revenues.

As of September 30, 2018, we had $13,947 in cash on hand and our monthly burn rate (i.e., the rate at which we are losing money) from the period from inception to September 30, 2018 was approximately $900.  At this rate, without raising additional capital, we would run out of funds in December 2019.  Our founder and CEO, Mr. Alexander M. Woods-Leo, has verbally agreed to contribute additional capital to us in the amount of up to $50,000 if needed to fund our operations.

Potential investors should be aware that there are difficulties associated with being a new venture, and the high rate of failure associated with this fact. Our future is dependent upon our ability to obtain financing and upon future profitable operations. These factors raise substantial doubt that we will be able to continue as a going concern.

Corporate Information

Our principal executive offices are located at 1105 Monterey Place, Wilmington, DE 19809 and our telephone number is (302) 307-3668. We maintain a website at www.apexfarming.com.  Information available on our website is not incorporated by reference in and is not deemed a part of this offering circular.

3

THE OFFERING

Securities being offered:	Up to 5,000,000 shares of common stock, par value $0.0001, for a maximum offering amount of $1,000,000.
Offering price per share:	$0.20 per share.
Prior closings:	As of the date of this offering circular, we have held multiple closings and have sold 956,844 shares of common stock.
Minimum subscription:	The minimum subscription amount is $500.
Shares outstanding after the offering:	Assuming this offering is fully funded, there will be 26,764,612 shares of common stock issued and outstanding.
Best efforts offering:	We are offering shares on a “best efforts” basis through our Chief Executive Officer, Mr. Woods-Leo, who will not receive any discounts or commissions for selling the shares. There is no minimum number of shares that must be sold in order to close this offering.
Restrictions on investment amount:	Generally, no sale may be made to you in this offering if the aggregate purchase price you pay is more than 10% of the greater of your annual income or net worth. Different rules apply to accredited investors and non-natural persons. Before making any representation that your investment does not exceed applicable thresholds, we encourage you to review Rule 251(d)(2)(i)(c) of Regulation A. For general information on investing, we encourage you to refer to www.investor.gov.
Escrow account:	We have established an escrow account with Prime Trust, LLC, who is acting as the escrow agent, into which subscriptions will be held pending closing. We may hold a series of closings at which we receive the funds from the escrow agent and issue the shares to investors. In the event that closing of this offering does not occur, or an investor’s subscription is rejected, any funds received from such investor will be promptly returned without interest or deduction.
Termination of the offering:	This offering will terminate at the earlier of: (1) the date on which the maximum offering amount has been sold, (2) the date which is one year after this offering has been qualified by the SEC, or (3) the date on which this offering is earlier terminated by us in our sole discretion.
Use of proceeds:	We estimate that, at a per share price of $0.20, the net proceeds from the sale of the 5,000,000 shares in this offering will be approximately $800,137, after deducting the estimated offering expenses of approximately $199,863. We intend to use the net proceeds of this offering for engineering and prototyping, marketing, production and inventory, administrative and corporate expenses, professional fees and compensation, and working capital reserves. See the section entitled “Use of Proceeds” for details.
Market for our Common Stock:	Our common stock is not listed for trading on any exchange or automated quotation system. We intend to engage a market maker to apply for quotation on the OTC Market. There can be no assurance that a market maker will agree to file the necessary documents with the Financial Industry Regulatory Authority (“FINRA”), nor can there be any assurance that such an application for quotation will be approved.
Risk factors:	Investing in our securities involves risks. See the section entitled “Risk Factors” in this offering circular and other information included in this offering circular for a discussion of factors you should carefully consider before deciding to invest in our securities.

4

RISK FACTORS

Investing in our shares involves a significant degree of risk. In evaluating our company and an investment in the shares, careful consideration should be given to the following risk factors, in addition to the other information included in this offering circular. Each of these risk factors could materially adversely affect our business, operating results or financial condition, as well as adversely affect the value of an investment in our shares. The following is a summary of the most significant factors that make this offering speculative or substantially risky. We are still subject to all the same risks that all companies in its industry, and all companies in the economy, are exposed to. These include risks relating to economic downturns, political and economic events and technological developments (such as cyber-security). Additionally, early-stage companies are inherently riskier than more developed companies. You should consider general risks as well as specific risks when deciding whether to invest.

Risks Related to our Business, Operating Results and Industry

We are an early development stage company in the testing phase with limited operating history.

We were formed under the laws of Nevada on September 19, 2017. We have limited operations and operating revenue.  We have recently completed the testing stage of product development and plan to begin to sell and otherwise commercialize our vertical farming systems.  Our future operations are subject to all of the risks inherent in the establishment of a new business enterprise. These risks are described in detail below. The likelihood of the success of our company must be considered in light of the problems, expenses, difficulties, complications and delays frequently encountered in connection with the development of an entity in the vertical farming industry and the competitive environment in which we operate. There can be no assurances that future revenues will be significant, that any sales will be profitable or that we will have sufficient funds available to complete our marketing and development programs or to market any new products which we may develop. We currently have operating losses, have no substantive source of operating revenue, are unable to self-finance operations, have limited resources, and there can be no assurances that we will be able to develop such revenue sources or that our operations will become profitable, even if we are able to commercialize our products and build brand awareness.

We have a history of losses and our future profitability is uncertain.

We have recently completed the testing phase of product development and plan to begin to sell and otherwise commercialize our vertical farming systems. Although we believe our product is ready for commercialization, we have only built and sold one vertical farming system to date, which sale occurred in June 2018.  We have incurred losses since we began our company and we will continue to have losses in the future as we incur additional expenses to execute our business plan, fuel our potential growth and conduct further research and development. We expect to make significant expenditures to commercialize our vertical farming system, further develop our business and make technology enhancements to our vertical farming system.  We will have to begin to generate and sustain and increase revenues to achieve or maintain profitability.  We may not generate sufficient revenues to achieve or maintain profitability in the future. We may incur significant losses in the future for a number of reasons, including those discussed in other risk factors and factors that we cannot foresee.

We will need additional financing to execute our business plan which we may not be able to secure on acceptable terms, or at all.

We will require additional financing in the near and long term to fully execute our business plan. Our success depends on our ability to raise such additional financing on reasonable terms and on a timely basis. Conditions in the economy and the financial markets may make it more difficult for us to obtain necessary additional capital or financing on acceptable terms, or at all. If we cannot secure sufficient additional financing, we may be forced to forego strategic opportunities or delay, scale back or eliminate further development of our goals and objectives, operations and investments or employ internal cost savings measures.

5

If we are not able to sell our vertical farming systems to other users or acquire land to build our vertical farm and create production capacity, then our business will not be able to grow.

We may not be able to raise sufficient capital to acquire land to build our vertical farm, develop our vertical farm or expand production capacity.  If we are not able to sell our vertical farming systems to other users or complete the construction of our own vertical farm and create production capacity, we may not be able to generate sales, and as a result, we may never become profitable and our business prospects will suffer.

In order for us to compete and grow, we must attract, recruit, retain and develop the necessary personnel who have the needed experience.

Recruiting and retaining highly qualified personnel is critical to our success. These demands may require us to hire additional personnel and will require our existing management personnel to develop additional expertise. We face intense competition for personnel. The failure to attract and retain personnel or to develop such expertise could delay or halt the sales and licensing of our product. If we experience difficulties in hiring and retaining personnel in key positions, we could suffer from delays in our development, loss of customers and sales and diversion of management resources, which could adversely affect operating results. Our future consultants and advisors may be employed by third parties and may have commitments under consulting or advisory contracts with third parties that may limit their availability to us.

Our management team has limited experience in the vertical farming industry and has not managed a business with similar risks and challenges specific to our business.

Members of our management team and key employees that we hire may make decisions detrimental to our business and/or be unable to successfully manage our operations. The ineffective management of our business will have a negative effect on our results of operations.

Quality management plays an essential role in determining and meeting customer requirements, preventing defects, improving our products and services and maintaining the integrity of the data that supports the safety and efficacy of our products.

Our future success depends on our ability to maintain and continuously improve our quality management program. An inability to address a quality or safety issue in an effective and timely manner may also cause negative publicity, a loss of customer confidence in us or our current or future products, which may result in the loss of sales and difficulty in successfully launching new products. In addition, a successful claim brought against us in excess of available insurance or not covered by indemnification agreements, or any claim that results in significant adverse publicity against us, could have an adverse effect on our business and our reputation.

Our success depends on the services of our Chief Executive Officer, the loss of whom could disrupt our business.

We depend to a large extent on the services of our founder and CEO, Mr. Alexander M. Woods-Leo.  Given his knowledge and experience, he is important to our future prospects and development as we rely on his expertise in developing our business strategies and maintaining our operations.  Because we are a start-up dependent on the vision of our founder, it will be critical to our prospects and successful development that this person remain with us to help establish, develop and grow our business.  The loss of the service of Mr. Woods-Leo and the failure to find timely replacements with comparable experience and expertise could disrupt and adversely affect our business.

We face significant competition for our vertical farming systems in the vertical farming industry.

The vertical farming industry is highly competitive and we compete with a number of other companies that provide vertical farming systems to the vertical farming industry. Our ability to compete successfully in the case of our vertical farming systems and to manage our planned growth will depend primarily upon the following factors:

6

·maintaining continuity in our management and key personnel; 

·ability to react to competitive product and pricing pressures; 

·the strength of our brand;  

·increasing the productivity of our future sales employees;   

·effectively marketing and selling our vertical farming systems; 

·acquiring new customers for our vertical farming systems;  

·ability to respond to service repair requests if necessary;  

·developing and improving our operational, financial and management controls; 

·developing and improving our information reporting systems and procedures; and 

·the design and functionality of our vertical farming systems. 

Many of our competitors have greater financial, technical, product development, marketing and other resources than we do. These organizations may be better known than we are and may have more customers or users than we do. We cannot provide assurance that we will be able to compete successfully against these organizations, which may lead to lower customer satisfaction, decreased demand for our solutions, loss of market share or reduction of operating profits.

The forecasts of market growth included in this offering circular may prove to be inaccurate, and even if the markets in which we compete achieve the forecasted growth, we cannot assure you our business will grow at similar rates, if at all.

Growth forecasts are subject to significant uncertainty and are based on assumptions and estimates that may not prove to be accurate. The forecasts contained in this offering circular may prove to be inaccurate. Even if these markets experience the forecasted growth described in this offering circular, we may not grow our business at similar rates, or at all. Our growth is subject to many factors, including our success in implementing our business strategy, which is subject to many risks and uncertainties. Accordingly, the forecasts of market growth included in this offering circular should not be taken as indicative of our future growth.

Reductions in future sales of our vertical farming systems will have an adverse effect on our profitability and ability to generate cash to fund our business plan.

The following factors, among others, could affect future market acceptance and profitability of our vertical farming systems:

·the introduction of competitive or alternative vertical farming systems; 

·changes in consumer preferences among vertical farming products; 

·changes in awareness of the environmental impact of vertical farming; 

·changes in consumer perception about the products of vertical farming; 

·the level and effectiveness of our sales and marketing efforts; 

·any unfavorable publicity regarding our vertical farming systems or similar systems; 

·any unfavorable publicity regarding our brand; 

·litigation or threats of litigation with respect to our vertical farming systems; 

·the price of our vertical farming systems relative to other competing vertical farming systems; 

·price increases resulting from rising commodity costs; 

·regulatory developments affecting the manufacturing or marketing of our vertical farming systems;  

·any changes in government policies and practices related to our vertical farming systems; and 

·new science or research that disputes the utility of vertical farming products. 

Adverse developments with respect to the manufacturing or sale of vertical farming systems would significantly reduce our net sales and profitability and have a material adverse effect on our ability to maintain profitability and achieve our business plan.

We will rely on other companies to provide materials for our future vertical farming systems.

We will depend on suppliers and subcontractors to meet our contractual obligations to our future customers and conduct our operations. Our ability to meet our obligations to our customers may be adversely affected if suppliers or subcontractors do not provide the agreed-upon supplies or perform the agreed-upon services in compliance with customer requirements and in a timely and cost-effective manner. To build our vertical farming systems we will require polyvinyl chloride, wood, pond materials depending on whether the pond must be built above or underground, and other supplies. Likewise, the quality of our future vertical farming systems may be adversely impacted if companies from whom we acquire such items do not

7

provide materials which meet required specifications and perform to our and our customers’ expectations. Our distributors and suppliers may be less likely than us to be able to quickly recover from natural disasters and other events beyond their control and may be subject to additional risks such as financial problems that limit their ability to conduct their operations. The risk of these adverse effects may be greater in circumstances where we may rely on only one or two distributors or suppliers for a particular material.

We plan to source certain materials from a number of third-party suppliers and, in some cases, single-source suppliers.

Although we believe that alternative suppliers will be available, the loss of any of our future material suppliers could adversely affect our results of operations and financial condition. Our inability to preserve the expected economics of these agreements could expose us to significant cost increases in future years.

Substantial disruption to a future distributors’ or suppliers’ manufacturing facilities could occur.

A disruption in production at a future distributors’ or suppliers’ manufacturing facilities could have an adverse effect on our business. The disruption could occur for many reasons, including fire, natural disasters, weather, water scarcity, manufacturing problems, disease, strikes, transportation or supply interruption, government regulation, cybersecurity attacks or terrorism. Alternative facilities with sufficient capacity or capabilities may not be available, may cost substantially more or may take a significant amount of time to start production, each of which could negatively affect our business and results of operations.

Increased costs could adversely affect our company.

An increase in the cost of raw materials could affect our profitability. Commodity and other price changes may result in unexpected increases in the cost of raw materials and other materials used by us.  We may also be adversely affected by shortages of raw materials. In addition, energy cost increases could result in higher transportation, freight and other operating costs.  We may not be able to increase our prices to offset these increased costs without suffering reduced volume, sales and operating profit, and this could have an adverse effect on your investment.

Any disruption in our information systems could disrupt our future operations and could adversely impact our business and results of operations.

We plan to depend on various information systems to support our customers’ requirements and to successfully manage our business, including managing orders, supplies, accounting controls and payroll. Any inability to successfully manage the procurement, development, implementation or execution of our information systems and back-up systems, including matters related to system security, reliability, performance and access, as well as any inability of these systems to fulfill their intended purpose within our business, could have an adverse effect on our business and results of operations. Such disruptions may not be covered by our business interruption insurance, insurance that we plan to but have not yet obtained.

Manufacturing or design defects, unanticipated use of our products, or inadequate disclosure of risks relating to the use of the products can lead to injury or other adverse events.

These events could lead to recalls or safety alerts relating to our products (either voluntary or required by governmental authorities) and could result, in certain cases, in the removal of a product from the market. Any recall could result in significant costs as well as negative publicity that could reduce demand for our products. Personal injuries relating to the use of our products can also result in product liability claims being brought against us. In some circumstances, such adverse events could also cause delays in new product approvals. Similarly, negligence in performing our services can lead to injury or other adverse events.

Customers often finance purchases of our products and if they cannot obtain loans on satisfactory terms or at all, our future sales revenue may decline.

Declines in the lending environment including fewer lenders, tighter underwriting and loan approval criteria, greater down payment requirements and, in some cases, higher interest rates have impaired customers’ ability to finance and purchase our products. If credit conditions worsen, and adversely affect the ability of customers to finance potential purchases at acceptable terms and interest rates, it could result in a decrease in future sales of our products or delay any improvement in our sales.

We may fail to appropriately assess the suitability of our vertical farming system in a particular space.

8

We plan to build our scalable and fully customizable vertical farming system to fit our customer’s specifications.  Although we plan to assess the particular space to ensure proper space access and load resistance, there is no guarantee that we will be able to ensure that our customer has complied with local and federal regulations, zoning laws or certification requirements necessary to build their vertical farm. Furthermore, although we plan to build our vertical farming system to comply with applicable local and federal regulations including but not limited to building safety, electrical safety and security guidelines, there is no guarantee that we will be able to do so.  As a result, our brand image may be harmed and our business and results of operations may suffer.

If we fail to increase brand awareness, it may have an adverse effect on our results of operations.

Due to a variety of factors, our opportunity to achieve and maintain a significant market share may be limited.  Developing and maintaining awareness of our brand name, among other factors, is critical.  Further, the importance of brand recognition will increase as competition in our market increases.  Successfully promoting and positioning our brand, products and services will depend largely on the effectiveness of our marketing efforts. Therefore, we may need to increase our financial commitment to creating and maintaining brand awareness.  If we fail to successfully promote our brand name or if we incur significant expenses promoting and maintaining our brand name, it would have a material adverse effect on our results of operations.

Our future advertising and marketing efforts may be costly and may not achieve desired results.

We plan to incur substantial expense in connection with our advertising and marketing efforts. Although we plan to target our advertising and marketing efforts on current and potential customers who we believe are likely to be in the market for the products we plan to sell, we cannot assure you that our advertising and marketing efforts will achieve our desired results. In addition, we will periodically adjust our advertising expenditures in an effort to optimize the return on such expenditures. Any decrease in the level of our advertising expenditures, which may be made to optimize such return could adversely affect our sales.

Assertions by third parties of infringement, misappropriation or other violation by us of their intellectual property rights could result in significant costs and substantially harm our business and operating results.

In recent years, there has been significant litigation involving intellectual property rights in many technology-based industries. Any infringement, misappropriation or related claims, whether or not meritorious, is time-consuming, diverts technical and management personnel and is costly to resolve. As a result of any such dispute, we may have to develop non-infringing technology, pay damages, enter into royalty or licensing agreements, cease providing our product or take other actions to resolve the claims. These actions, if required, may be costly or unavailable on terms acceptable to us. Any of these events could result in increases in operating expenses, limit our product offerings or result in a loss of business.

We may not be able to protect our intellectual property rights which may harm our business and results of operations.

We regard our trademarks, service marks, copyrights, patents, trade secrets, proprietary technologies, domain names and similar intellectual property as important to our success. We rely on trademark, copyright and patent law, trade secret protection and confidentiality agreements with our future employees, consultants, vendors, customers and others to protect our proprietary rights.  Our technology is currently covered by two patents and we have sought and are working to possibly obtain patent protection for other aspects of our technologies. Many of the trademarks that we use contain words or terms having a somewhat common usage and, as a result, we may have difficulty registering them in certain jurisdictions. We have not yet obtained registrations for our most important marks.  If other companies have registered or have been using in commerce similar trademarks for products similar to ours, we may have difficulty in registering, or enforcing an exclusive right to use, our marks.

There can be no assurance that our efforts to protect our proprietary rights will be sufficient or effective, that any pending or future patent and trademark applications will lead to issued patents and registered trademarks in all instances, that others will not develop or patent similar or superior technologies, products, or that our patents, trademarks and other intellectual property will not be challenged, invalidated, misappropriated or infringed by others. Additionally, the intellectual property laws and enforcement practices of other countries in which our product is or may in the future be offered may not protect our products and intellectual property rights to the same extent as the laws of the United States. If we are unable to protect our intellectual property from unauthorized use, our brand image may be harmed and our business and results of operations may suffer.

We plan to obtain insurance that may not provide adequate levels of coverage against claims.

9

We have obtained commercial product liability insurance that covers us for up to $2 million in overall damages and $1 million per occurrence.  This policy also covers us for general liability for up to $10,000 for damages to equipment and property.   However, there are types of losses we may incur that cannot be insured against or that we believe are not economically reasonable to insure. Such losses could have a material adverse effect on our business and results of operations.

Although dependent on certain key personnel, we do not have any key man life insurance policies on any such people.

We are dependent on Alexander M. Woods-Leo in order to conduct our operations and execute its business plan, however, we have not purchased any insurance policies with respect to him in the event of his death or disability. Therefore, if Alexander M. Woods-Leo dies or becomes disabled, we will not receive any compensation to assist with his absence. The loss of Alexander M. Woods-Leo could negatively affect our company and its operations.

Because we plan to develop our vertical farms in two specific geographical areas, we will be susceptible to economic and other trends and developments, including adverse weather conditions in these areas.

Our financial performance will be significantly dependent on our initial vertical farms, which we expect will be located in Colorado and Delaware. As a result, adverse economic conditions in these areas could have a material adverse effect on our overall results of operations. In addition, local strikes, terrorist attacks, increases in energy prices, inclement weather or natural or man-made disasters could have a negative effect on our business. Temporary or prolonged closures may occur and guest traffic may decline due to the actual or perceived effects of future weather-related events. Furthermore, our initial vertical farms will be located on opposite sides of our country.  The distance between the two farms will make it more costly and difficult for our management team to supervise and operate the farms.

We are subject to income taxes as well as non-income-based taxes, such as payroll, sales, use, value-added, net worth, property and goods and services taxes, in the U.S.

Significant judgment is required in determining our provision for income taxes and other tax liabilities. In the ordinary course of our business, there are many transactions and calculations where the ultimate tax determination is uncertain. Although we believe that our tax estimates are reasonable: (i) there is no assurance that the final determination of tax audits or tax disputes will not be different from what is reflected in our income tax provisions, expense amounts for non-income-based taxes and accruals and (ii) any material differences could have an adverse effect on our financial position and results of operations in the period or periods for which the determination is made.

We are not subject to Sarbanes-Oxley regulations and lack the financial controls and safeguards required of public companies.

We do not have the internal infrastructure necessary, and are not required, to complete an attestation about our financial controls that would be required under Section 404 of the Sarbanes-Oxley Act of 2002. There can be no assurances that there are no significant deficiencies or material weaknesses in the quality of our financial controls. We expect to incur additional expenses and diversion of management’s time when it becomes necessary to perform the system and process evaluation, testing and remediation required to comply with the management certification and auditor attestation requirements.

Risks Related to this Offering and Ownership of our Securities

Due to the lack of a current public market for our common stock, investors may have difficulty in selling stock they purchase.

Prior to this offering, no public trading market existed for our securities. There can be no assurance that a public trading market for our common stock will develop or that a public trading market, if developed, will be sustained.  We intend to engage a market maker to apply for quotation on the OTC Market. There can be no assurance that a market maker will agree to file the necessary documents with FINRA, which regulates the market makers on the OTC Market; nor can there be any assurance that such an application for quotation will be approved. Thus, it is anticipated that there will be little or no market for the shares sold in this offering until we are eligible to have our common stock quoted on the OTC Market and as a result, an investor may find it difficult to dispose of any shares purchased hereunder. Because there is none and may be no public market for our stock, we may not be able to secure future equity financing which would have a material adverse effect on our company

Furthermore, when and if our common stock is eligible for quotation on the OTC Market, there can also be no assurance as to the depth or liquidity of any market for the common stock or the prices at which holders may be able to sell the shares.

10

As a result, investors could find it more difficult to trade, or to obtain accurate quotations of the market value of, the stock as compared to securities that are traded on the NASDAQ trading market or on an exchange. Moreover, an investor may find it difficult to dispose of any shares purchased hereunder.

Investors may have difficulty in reselling their shares due to the lack of market or state Blue Sky laws.

Our common stock is currently not quoted on any market. No market may ever develop for our common stock, or if developed, may not be sustained in the future. The holders of our shares of common stock and persons who desire to purchase them in any trading market that might develop in the future should be aware that there may be significant state law restrictions upon the ability of investors to resell our shares. Accordingly, even if we are successful in having our securities available for trading on the OTC Market, investors should consider any secondary market for our securities to be a limited one. We intend to seek coverage and publication of information regarding the Company in an accepted publication which permits a “manual exemption.” This manual exemption permits a security to be distributed in a particular state without being registered if the company issuing the security has a listing for that security in a securities manual recognized by the state. However, it is not enough for the security to be listed in a recognized manual. The listing entry must contain (1) the names of issuers, officers, and directors, (2) an issuer’s balance sheet, and (3) a profit and loss statement for either the fiscal year preceding the balance sheet or for the most recent fiscal year of operations.  We may not be able to secure a listing containing all of this information.  Furthermore, the manual exemption is a non-issuer exemption restricted to secondary trading transactions, making it unavailable for issuers selling newly issued securities. Most of the accepted manuals are those published in Standard and Poor’s, Moody’s Investor Service, Fitch’s Investment Service, and Best’s Insurance Reports, and many states expressly recognize these manuals. A smaller number of states declare that they “recognize securities manuals” but do not specify the recognized manuals. The following states do not have any provisions and therefore do not expressly recognize the manual exemption: Alabama, Georgia, Illinois, Kentucky, Louisiana, Montana, South Dakota, Tennessee, Vermont and Wisconsin. Accordingly, our shares should be considered totally illiquid, which inhibits investors’ ability to resell their shares.

We will be subject to penny stock regulations and restrictions and you may have difficulty selling shares of our common stock.

The SEC has adopted regulations which generally define so-called “penny stocks” to be an 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.  We anticipate that our common stock will become a “penny stock”, and we will become subject to Rule 15g-9 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or the “Penny Stock Rule.” This rule imposes additional sales practice requirements on broker-dealers that sell such securities to persons other than established customers. For transactions covered by Rule 15g-9, a broker-dealer must make a special suitability determination for the purchaser and have received the purchaser’s written consent to the transaction prior to sale. As a result, this rule may affect the ability of broker-dealers to sell our securities and may affect the ability of purchasers to sell any of our securities in the secondary market.

For any transaction involving a penny stock, unless exempt, the rules require delivery, prior to any transaction in a penny stock, of a disclosure schedule prepared by the SEC relating to the penny stock market. Disclosure is also required to be made about sales commissions payable to both the broker-dealer and the registered representative and current quotations for the securities. Finally, monthly statements are required to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stock.

We do not anticipate that our common stock will qualify for exemption from the Penny Stock Rule. In any event, even if our common stock were exempt from the Penny Stock Rule, we would remain subject to Section 15(b)(6) of the Exchange Act, which gives the SEC the authority to restrict any person from participating in a distribution of penny stock, if the SEC finds that such a restriction would be in the public interest.

Sales of our common stock under Rule 144 could reduce the price of our stock.

Upon the consummation of this offering, there will be 10,095,571 shares of our common stock held by non-affiliates and 16,669,041 shares held by affiliates that Rule 144 of the Securities Act defines as restricted securities.  Up to 5,000,000 newly issued shares are being qualified in this offering, however all of the remaining shares will still be subject to the resale restrictions of Rule 144.  In general, persons holding restricted securities, including affiliates, must hold their shares for a period of at least six months, may not sell in any 90-day period more than the greater of (i) one percent of the total issued and outstanding shares and (ii) the average weekly trading volume of such shares during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale, and must resell the shares in an unsolicited brokerage transaction

11

at the market price.  The availability for sale of substantial amounts of common stock under Rule 144 could reduce prevailing market prices for our securities.  

This offering is being conducted on a self-underwritten “best efforts” basis without a minimum and we may not be able to execute our growth strategy if the $1,000,000 million maximum is not sold.

If you invest in the common stock and less than all of the offered shares are sold, the risk of losing your entire investment will be increased. We are offering our common stock on a self-underwritten “best efforts” basis without a minimum, and we can give no assurance that all of the offered common stock will be sold. If less than $1,000,000 million of common stock shares offered are sold, we may be unable to fund all the intended uses described in this offering circular from the net proceeds anticipated from this offering without obtaining funds from alternative sources or using working capital that we generate. Alternative sources of funding may not be available to us at what we consider to be a reasonable cost, and the working capital generated by us may not be sufficient to fund any uses not financed by offering net proceeds.  No assurance can be given to you that any funds will be invested in this offering other than your own.

This is a fixed price offering and the fixed offering price may not accurately represent the current value of us or our assets at any particular time. Therefore, the purchase price you pay for our shares may not be supported by the value of our assets at the time of your purchase.

This is a fixed price offering, which means that the offering price for our shares is fixed and will not vary based on the underlying value of our assets at any time.  Our board of directors has determined the offering price in its sole discretion without the input of an investment bank or other third party.  The fixed offering price for our shares has not been based on appraisals of any assets we own or may own, or of our company as a whole, nor do we intend to obtain such appraisals.  Therefore, the fixed offering price established for our shares may not be supported by the current value of our company or our assets at any particular time.

Since our officers and directors have substantial influence over our company, the rights of holders of the securities being offered may be materially limited, diluted, or qualified by the rights of other classes of securities and their interests may not be aligned with the interests of our stockholders.

Our officers and directors have significant control over stockholder matters, and the minority stockholders will have little or no control over our affairs. Our officers and directors will own approximately 62.28% of our outstanding common stock if all of the shares offered herein are sold. The shares offered for sale are exactly the same as the shares of common stock that are currently outstanding. Accordingly, our officers and directors will have control over stockholders matters, such as election of director, amendments to our articles of incorporation, and approval of significant corporate transactions. Furthermore, given the substantial equity interest held by our Chief Executive Officer, he will be able to elect directors who may be in favor of higher executive compensation packages for himself and other officers of our company than independent directors would be.  As a result, our minority stockholders will have little or no control over our affairs.

We may, in the future, issue additional shares of common stock, which would reduce investors’ percent of ownership and may dilute our share value.

Our articles of incorporation authorize the issuance of 100,000,000 shares of common stock.  Upon completion of this offering, we will have approximately 26,764,612 shares of common stock issued and outstanding. Accordingly, we may issue up to an additional 73,235,388 shares of common stock after this offering. The future issuance of common stock may result in substantial dilution in the percentage of our common stock held by our then existing shareholders. We may value any common stock issued in the future on an arbitrary basis. The issuance of common stock for future services or acquisitions or other corporate actions may have the effect of diluting the value of the shares held by our investors and might have an adverse effect on any trading market for our common stock.

Investors in this offering will experience immediate and substantial dilution.

The offering price of $0.20 per share is substantially higher than the net tangible book value per share of our common stock immediately following this offering. Therefore, if you purchase units in the offering, you will experience immediate and substantial dilution in net tangible book value per underlying share of common stock in relation to the price that you paid for your shares We expect the dilution as a result of the offering to be $0.17 per underlying share of common stock to new investors purchasing our shares in this offering at the offering price if the maximum amount is raised. Accordingly, if we were liquidated at our net tangible book value, you would not receive the full amount of your investment.  See the section entitled “Dilution.”

12

We have broad discretion in the use of the net proceeds from this offering, and our use of the offering proceeds may not yield a favorable return on your investment.

We intend to use the net proceeds of this offering for engineering and prototyping, marketing, production and inventory, administrative and corporate expenses, professional fees and compensation, and working capital reserves. However, our management has broad discretion over how these proceeds are to be used and based on unforeseen technical, commercial or regulatory issues could spend the proceeds in ways with which you may not agree.  Moreover, the proceeds may not be invested effectively or in a manner that yields a favorable or any return, and consequently, this could result in financial losses that could have a material adverse effect on our business, financial condition and results of operations.

We have never paid cash dividends on our stock and we do not intend to pay dividends for the foreseeable future.

We have paid no cash dividends on any class of our stock to date and we do not anticipate paying cash dividends in the near term. For the foreseeable future, we intend to retain any earnings to finance the development and expansion of our business, and we do not anticipate paying any cash dividends on our stock. Accordingly, investors must be prepared to rely on sales of their shares after price appreciation to earn an investment return, which may never occur. Investors seeking cash dividends should not purchase our shares. Any determination to pay dividends in the future will be made at the discretion of our board of directors and will depend on our results of operations, financial condition, contractual restrictions, restrictions imposed by applicable law and other factors our Board deems relevant.

Certain provisions of our articles of incorporation may make it more difficult for a third party to effect a change-of-control.

Our articles of incorporation authorize our board of directors to issue up to 50,000,000 shares of preferred stock. The preferred stock may be issued in one or more series, the terms of which may be determined at the time of issuance by our board of directors without further action by the stockholders. These terms may include voting rights including the right to vote as a series on particular matters, preferences as to dividends and liquidation, conversion rights, redemption rights and sinking fund provisions. The issuance of any preferred stock could diminish the rights of holders of existing shares, and therefore could reduce the value of such shares. In addition, specific rights granted to future holders of preferred stock could be used to restrict our ability to merge with, or sell assets to, a third party. The ability of our board of directors to issue preferred stock could make it more difficult, delay, discourage, prevent or make it costlier to acquire or effect a change-in-control, which in turn could prevent our stockholders from recognizing a gain in the event that a favorable offer is extended and could materially and negatively affect the market price of our common stock.

Upon the completion of this offering, we expect to elect to become a public reporting company under the Exchange Act, and thereafter publicly report on an ongoing basis as an “emerging growth company” under the reporting rules set forth under the Exchange Act. If we elect not to do so, we will be required to publicly report on an ongoing basis under the reporting rules set forth in Regulation A for Tier 2 issuers. In either case, we will be subject to ongoing public reporting requirements that are less rigorous than Exchange Act rules for companies that are not “emerging growth companies”, and our stockholders could receive less information than they might expect to receive from more mature public companies.

Upon the completion of this offering, we expect to elect to become a public reporting company under the Exchange Act. If we elect to do so, we will be required to publicly report on an ongoing basis as an “emerging growth company” (as defined in the JOBS Act) under the reporting rules set forth under the Exchange Act. For so long as we remain an “emerging growth company,” we may take advantage of certain exemptions from various reporting requirements that are applicable to other Exchange Act reporting companies that are not “emerging growth companies,” including but not limited to:

·not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act; 

·taking advantage of extensions of time to comply with certain new or revised financial accounting standards; 

·being permitted to comply with reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements; and 

·being exempt from the requirement to hold a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. 

We expect to take advantage of these reporting exemptions until we are no longer an emerging growth company. We would remain an “emerging growth company” for up to five years, although if the market value of our common stock that is held

13

by non-affiliates exceeds $700 million as of any June 30 before that time, we would cease to be an “emerging growth company” as of the following December 31.

If we elect not to become a public reporting company under the Exchange Act, we will be required to publicly report on an ongoing basis under the reporting rules set forth in Regulation A for Tier 2 issuers. The ongoing reporting requirements under Regulation A are more relaxed than for “emerging growth companies” under the Exchange Act. The differences include, but are not limited to, being required to file only annual and semiannual reports, rather than annual and quarterly reports. Annual reports are due within 120 calendar days after the end of the issuer’s fiscal year, and semiannual reports are due within 90 calendar days after the end of the first six months of the issuer’s fiscal year.

In either case, we will be subject to ongoing public reporting requirements that are less rigorous than Exchange Act rules for companies that are not “emerging growth companies,” and our stockholders could receive less information than they might expect to receive from more mature public companies. 

14

DILUTION

Dilution means a reduction in value, control or earnings of the shares the investor owns.

Immediate Dilution

An early-stage company typically sells its shares (or grants options over its shares) to its founders and early employees at a very low cash cost, because they are, in effect, putting their “sweat equity” into the company. When the company seeks cash investments from outside investors, like you, the new investors typically pay a much larger sum for their shares than the founders or earlier investors, which means that the cash value of your stake is diluted because all the shares are worth the same amount, and you paid more than earlier investors for your shares. Dilution may also be caused by pricing securities at a value higher than book value or expenses incurred in the offering.

Purchasers of our shares in this offering will experience an immediate dilution of net tangible book value per share from the public offering price.  Dilution in net tangible book value per share represents the difference between the amount per share paid by the purchasers of shares and the net tangible book value per share immediately after this offering.

After giving effect to the sale of our shares in this offering at an assumed public offering price of $0.20 per share, and after deducting the estimated offering expenses payable by us, our adjusted net tangible book value at September 30, 2018 would have been $794,366, or $0.03 per share, assuming the sale of the maximum number of shares offered for sale in this offering. Assuming the sale of the maximum number of shares offered for sale in this offering, this represents an immediate increase in net tangible book value per share of $0.03 to the existing stockholders and dilution in net tangible book value per share of $0.17 to new investors who purchase shares in the offering.

The following table sets forth the estimated net tangible book value per share after the offering and the dilution to persons purchasing shares.

Offering price per share	$	0.20
Net tangible book value per share at September 30, 2018	$	0.00
Adjusted net tangible book value per share after this offering	$	0.03
Increase in net tangible book value per share to the existing stockholders	$	0.03
Dilution in net tangible book value per share to new investors	$	0.17

The following table sets forth, assuming the sale of the maximum number of shares offered for sale in this offering (after deducting our estimated offering expenses), the total number of shares previously sold to existing stockholders, the total consideration paid for the foregoing and the average price paid per share. As the table shows, new investors purchasing shares may in certain circumstances pay an average price per share substantially higher than the average price per share paid by our existing stockholders.

	Shares Purchased			Total Consideration			Average  Price Per Share
	Number	%		Amount	%
Common Stock	21,764,612	81.32%	$	1,000	0.09%	$	-
New investors	5,000,000	18.68%	$	1,000,000	82.80%	$	0.20
Total	26,764,612		$	1,207,669		$

*Our founder was issued 10,000,000 shares at par value ($0.0001) for $1,000.  Additional shares of common stock were issued in exchange for certain services.

Future Dilution

Another important way of looking at dilution is the dilution that happens due to future actions by our company. The investor’s stake in our company could be diluted due to our issuing additional shares. In other words, when we issue more shares, the percentage of our company that you own will go down, even though the value of our company may go up. You will own a smaller piece of a larger company. This increase in number of shares outstanding could result from a stock offering (such as a public offering, another crowdfunding round, a venture capital round or an angel investment),

15

employees exercising stock options, or by conversion of certain instruments (such as convertible bonds, preferred shares or warrants) into stock.

If we decide to issue more shares, an investor could experience value dilution, with each share being worth less than before, and control dilution, with the total percentage an investor owns being less than before. There may also be earnings dilution, with a reduction in the amount earned per share (though this typically occurs only if we offer dividends, and most early stage companies are unlikely to offer dividends, preferring to invest any earnings into the company).

The type of dilution that hurts early-stage investors most occurs when a company sells more shares in a “down round,” meaning at a lower valuation than in earlier offerings. An example of how this might occur is as follows (numbers are for illustrative purposes only):

·In June 2017, an investor invests $20,000 for shares that represent 2% of a company valued at $1 million. 

·In December 2017, the company is doing very well and sells $5 million in shares to venture capitalists on a valuation (before the new investment) of $10 million. The investor now owns only 1.3% of the company but the investor’s stake is worth $200,000. 

·In June 2018, the company has run into serious problems and in order to stay afloat it raises $1 million at a valuation of only $2 million (the “down round”). The investor now owns only 0.89% of the company and the investor’s stake is worth only $26,660. 

This type of dilution might also happen upon conversion of convertible notes into shares. Typically, the terms of convertible notes issued by early-stage companies provide that in the event of another round of financing, the holders of the convertible notes get to convert their notes into equity at a “discount” to the price paid by the new investors, i.e., they get more shares than the new investors would for the same price. Additionally, convertible notes may have a “price cap” on the conversion price, which effectively acts as a share price ceiling. Either way, the holders of the convertible notes get more shares for their money than new investors. In the event that the financing is a “down round,” the holders of the convertible notes will dilute existing equity holders, and even more than the new investors do, because they get more shares for their money. Investors should pay careful attention to the amount of convertible notes that we have issued (and may issue in the future) and the terms of those notes.

If you are making an investment expecting to own a certain percentage of our company or expecting each share to hold a certain amount of value, it’s important to realize how the value of those shares can decrease by actions taken by us. Dilution can make drastic changes to the value of each share, ownership percentage, voting control, and earnings per share.

16

PLAN OF DISTRIBUTION

We are offering a maximum of 5,000,000 shares of common stock on a no minimum, “best efforts” basis at a price of $0.20 per share for maximum gross proceeds of up to $1,000,000. There is no minimum number of shares that must be sold in order to close this offering. As of the date of this offering circular, we have sold 956,844 shares for gross proceeds of $191,368.80.

We will sell the shares ourselves and do not plan to use underwriters or pay any commissions. We will be selling our shares using our best efforts and no one has agreed to buy any of our shares. This offering circular permits our officers and directors to sell the shares directly to the public, with no commission or other remuneration payable to them for any shares they may sell. There is no plan or arrangement to enter into any contracts or agreements to sell the shares with a broker or dealer.

The shares are being offered through Alexander M. Woods-Leo, our Chief Executive Officer, President, Secretary, Treasurer and director. Mr. Woods-Leo will be relying on the safe harbor in Rule 3a4-1 of the Exchange Act to sell the shares. No sales commission will be paid for shares sold by Mr. Woods-Leo. Mr. Woods-Leo is not subject to a statutory disqualification and is not associated persons of a broker or dealer.

Additionally, Mr. Woods-Leo primarily performs substantial duties on behalf of our company otherwise than in connection with transactions in securities. Mr. Woods-Leo has not been a broker or dealer or an associated person of a broker or dealer within the preceding 12 months and has not participated in selling an offering of securities for any issuer more than once every 12 months other than in reliance on paragraph (a)4(i) or (a)4(iii) of Rule 3a4-1 of the Exchange Act.

In the following states we cannot offer or sell our shares of common stock unless we register as an issuer dealer: Alabama, Arizona, Florida, Nebraska, Nevada, New Jersey, New York, North Dakota, Texas and Washington.  If we wish to offer and sell our shares of common stock in these states, we will hire an SEC registered broker-dealer to serve as our placement agent.  We may, however, decide to comply with a particular state’s issuer dealer registration requirements, in New York, for example, if we deem it appropriate.

Posting Agreement

We entered into that certain Posting Agreement, dated April 18, 2019, with StartEngine Crowdfunding, Inc. (“StartEngine”), a portal website that hosts public securities offerings. In consideration for hosting the public offering covered by this offering circular, including posting our offering circular, subscription documents and related materials on StartEngine.com, StartEngine will receive a cash payment of $50 per investor whose subscription is accepted and a five-year warrant to purchase the number our common stock exercisable at $0.20 (the offering price of the shares in this offering) per share on a cash or cashless basis, equal to the number of investors in this offering for which StartEngine will receive a fee multiplied by 50, with that number then divided by 30% of the offering price ($0.20). The warrant has standard adjustment provisions for stock splits, stock dividends, recapitalizations and similar transactions and anti-dilution protection. The warrant also has subsequent offering rights and piggy back registration rights.

Our offering circular will be furnished to prospective investors in this offering via download 24 hours a day, 7 days a week on the startengine.com website.

Process of Subscribing

Interested investors will be required to complete a subscription agreement in order to invest. The subscription agreement is available either through our company or on startengine.com. The subscription agreement must be delivered to us or through startengine.com and the investor may transfer funds for the subscribed amount in accordance with the instructions stated in the subscription agreement. We have agreed to pay FundAmerica LLC, a technology service provider, and Prime Trust, LLC, an escrow company, and an affiliate of FundAmerica LLC, (i) a one-time escrow fee of $500, (ii) a monthly escrow fee of $35; (iii) an accounting and transaction fee of $15 per transaction; (iv) a license fee of $300 per month; (v) fees for bad actor checks equal to $85 per US person, $150 per international individual and $250 for international entities; (vi) fees for anti-money laundering checks equal to $5 per US individuals and entities, $10 for EU and UK individuals, $75 for EU and UK entities and $120 for other international individuals and entities; (vii) $1 for each eSign subscription agreement; and (viii) any applicable fees for fund transfers (ACH $1, check $10, wire $15 for US and $35 for international).

Escrow Account. The funds tendered by potential investors will be held in a separate bank account maintained by Prime Trust, LLC, as escrow agent. Upon each closing, the proceeds collected for such closing will be disbursed to us and the shares for each closing will be issued to investors.

17

Right to Reject Subscriptions. After we receive your complete, executed subscription agreement and the funds required under the subscription agreement have been transferred to the escrow agent, we have the right to review and accept or reject your subscription in whole or in part, for any reason or for no reason. We will return all monies from rejected subscriptions immediately to you, without interest or deduction.

Acceptance of Subscriptions. Upon our acceptance of a subscription agreement, we will countersign the subscription agreement and issue the shares subscribed. Once you submit the subscription agreement and it is accepted, you may not revoke or change your subscription or request your subscription funds. All accepted subscription agreements are irrevocable.

Under Rule 251 of Regulation A, non-accredited, non-natural investors are subject to the investment limitation and may only invest funds which do not exceed 10% of the greater of the purchaser’s revenue or net assets (as of the purchaser’s most recent fiscal year end). As a result, a non-accredited, natural person may only invest funds which do not exceed 10% of the greater of the purchaser’s annual income or net worth (please see below on how to calculate your net worth).

How to Calculate Net Worth. For the purposes of calculating your net worth, it is defined as the difference between total assets and total liabilities. This calculation must exclude the value of your primary residence and may exclude any indebtedness secured by your primary residence (up to an amount equal to the value of your primary residence). In the case of fiduciary accounts, net worth and/or income suitability requirements may be satisfied by the beneficiary of the account or by the fiduciary, if the fiduciary directly or indirectly provides funds for the purchase of the shares in this offering.

In order to purchase the shares in this offering and prior to the acceptance of any funds from an investor, an investor will be required to represent, to our satisfaction, that he is either an accredited investor or is in compliance with the 10% of net worth or annual income limitation on investment in this offering.

Offering Period and Expiration Date

This offering commenced on September 12, 2018 upon qualified by the SEC and will terminate at the earlier of: (1) the date on which the maximum offering amount has been sold, (2) the date which is one year after this offering has been qualified by the SEC, or (3) the date on which this offering is earlier terminated by us in our sole discretion.

Pricing of the Offering

Prior to the offering, there has been no public market for our securities. The initial public offering price was determined by our board of directors in its sole discretion without the input of an investment bank or other third party.  The principal factors considered in determining the initial public offering price include:

·the information set forth in this offering circular; 

·our history and prospects and the history of and prospects for the industry in which we compete; 

·our past and present financial performance; 

·our prospects for future earnings and the present state of our development; 

·the general condition of the securities markets at the time of this offering; 

·the recent market prices of, and demand for, publicly traded securities of generally comparable companies; and 

·other factors deemed relevant by us. 

Investment Limitations

As set forth in Title IV of the JOBS Act, there are limits on how many shares an investor may purchase if the offering does not result in a listing on a national securities exchange. The following would apply unless we are able to obtain a listing on a national securities exchange.

Generally, in the case of trading on the over-the-counter markets, no sale may be made to you in this offering if the aggregate purchase price you pay is more than 10% of the greater of your annual income or net worth. Different rules apply to accredited investors and non-natural persons. Before making any representation that your investment does not exceed applicable thresholds, we encourage you to review Rule 251(d)(2)(i)(C) of Regulation A. For general information on investing, we encourage you to refer to www.investor.gov.

Because this is a Tier 2, Regulation A offering, most investors in the case of trading on the over-the-counter markets must comply with the 10% limitation on investment in the offering. The only investor in this offering exempt from this limitation

18

is an “accredited investor” as defined under Rule 501 of Regulation D under the Securities Act. If you meet one of the following tests you should qualify as an accredited investor:

(i) You are a natural person who has had individual income in excess of $200,000 in each of the two most recent years, or joint income with your spouse in excess of $300,000 in each of these years, and have a reasonable expectation of reaching the same income level in the current year;

(ii) You are a natural person and your individual net worth, or joint net worth with your spouse, exceeds $1,000,000 at the time you purchase shares of our common stock in the offering;

(iii) You are an executive officer or general partner of the issuer or a manager or executive officer of the general partner of the issuer;

(iv) You are an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, or the Code, a corporation, a Massachusetts or similar business trust or a partnership, not formed for the specific purpose of acquiring the shares in this offering, with total assets in excess of $5,000,000;

(v) You are a bank or a savings and loan association or other institution as defined in the Securities Act, a broker or dealer registered pursuant to Section 15 of the Exchange Act, an insurance company as defined by the Securities Act, an investment company registered under the Investment Company Act of 1940, or a business development company as defined in that act, any Small Business Investment Company licensed by the Small Business Investment Act of 1958 or a private business development company as defined in the Investment Advisers Act of 1940;

(vi) You are an entity (including an Individual Retirement Account trust) in which each equity owner is an accredited investor;

(vii) You are a trust with total assets in excess of $5,000,000, your purchase of shares of our common stock in the offering is directed by a person who either alone or with his purchaser representative(s) (as defined in Regulation D promulgated under the Securities Act) has such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of the prospective investment, and you were not formed for the specific purpose of investing in the shares in this offering; or

(viii) You are a plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has assets in excess of $5,000,000.

Blue Sky Law Considerations

The holders of our shares of common stock and persons who desire to purchase them in any trading market that might develop in the future should be aware that there may be significant state law restrictions upon the ability of investors to resell our shares. Accordingly, even if we are successful in having the shares available for trading on the OTC Market, investors should consider any secondary market for our securities to be a limited one. There is no guarantee that our stock will ever be quoted on the OTC Market. We intend to seek coverage and publication of information regarding our company in an accepted publication, which permits a “manual exemption”. This manual exemption permits a security to be distributed in a particular state without being registered if the company issuing the security has a listing for that security in a securities manual recognized by the state. However, it is not enough for the security to be listed in a recognized manual. The listing entry must contain (1) the names of issuers, officers, and directors, (2) an issuer’s balance sheet, and (3) a profit and loss statement for either the fiscal year preceding the balance sheet or for the most recent fiscal year of operations. We may not be able to secure a listing containing all of this information. Furthermore, the manual exemption is a non-issuer exemption restricted to secondary trading transactions, making it unavailable for issuers selling newly issued securities. Most of the accepted manuals are those published in Standard and Poor’s, Moody’s Investor Service, Fitch’s Investment Service, and Best’s Insurance Reports, and many states expressly recognize these manuals. A smaller number of states declare that they “recognize securities manuals” but do not specify the recognized manuals. The following states do not have any provisions and therefore do not expressly recognize the manual exemption: Alabama, Georgia, Illinois, Kentucky, Louisiana, Montana, South Dakota, Tennessee, Vermont and Wisconsin.

We currently do not intend to and may not be able to qualify securities for resale in other states, which require shares to be qualified before they can be resold by our shareholders.

19

USE OF PROCEEDS

We estimate that, at a per share price of $0.20, the net proceeds from the sale of the 5,000,000 shares in this offering will be approximately $800,137, after deducting the estimated offering expenses of approximately $199,863.

The following table below sets forth the uses of proceeds assuming the sale of 25%, 50%, 75% and 100% of the securities offered for sale in this offering by us. For further discussion, see the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Plan of Operations.”

		25% of Offering Sold		50% of Offering Sold		75% of Offering Sold		100% of Offering Sold
Offering Proceeds
Shares Sold		1,250,000		2,500,000		3,750,000		5,000,000
Gross Proceeds	$	250,000	$	500,000	$	750,000	$	1,000,000
Total Before Expenses		250,000		500,000		750,000		1,000,000
Offering Expenses
StartEngine Fees		30,863		55,863		80,863		105,863
Escrow Agent and Related Fees		4,000		4,000		4,000		4,000
Legal & Accounting		75,500		75,500		75,500		75,500
Publishing/EDGAR		5,000		5,000		5,000		5,000
Transfer Agent		5,000		5,000		5,000		5,000
Blue Sky Compliance		4,500		4,500		4,500		4,500
Total Offering Expenses		124,863		149,863		174,863		199,863
Amount of Offering Proceeds Available for Use		125,137		350,137		575,137		800,137
Expenditures
Engineering and Prototyping		10,000		40,000		80,000		80,000
Marketing		30,000		50,000		75,000		100,000
Production and Inventory		20,000		20,000		80,000		100,000
Administrative and Corporate Expenses		40,000		75,000		175,000		250,000
Professional Fees and Compensation		25,000		100,000		150,000		150,000
Working Capital Reserves		137		65,137		15,137		120,137
Total Expenditures		125,137		350,137		575,137		800,137
Net Remaining Proceeds	$	0	$	0	$	0	$	0

The above figures represent only estimated costs. This expected use of net proceeds from this offering represents our intentions based upon our current plans and business conditions. The amounts and timing of our actual expenditures may vary significantly depending on numerous factors, including the status of and results from operations. As a result, our management will retain broad discretion over the allocation of the net proceeds from this offering. We may find it necessary or advisable to use the net proceeds from this offering for other purposes, and we will have broad discretion in the application of net proceeds from this offering. Furthermore, we anticipate that we will need to secure additional funding for the fully implement our business plan. Please see the section entitled “Risk Factors” on page 5.

We reserve the right to change the above use of proceeds if management believes it is in the best interests of our company.

20

DESCRIPTION OF BUSINESS

Our Company

We are a vertical farming technology company with what we believe to be a unique vertical farming system that uses patented technology to allow farmers to grow up to 10 times more produce in a given area than they would be able to grow without our system based upon our testing. The vertical hydroponic system, meaning plants are grown without soil by exposing roots to mineral nutrient solutions in a water solvent, aims to reduce expenses associated with energy, water, space, and labor. Our system has been tested by our founder and CEO for over 3 years and such testing has shown that our system can reduce water usage both indoors and outdoors by over 85% compared to farming without our system. Furthermore, unlike most of our competitor’s systems, our system is effective both indoors and outdoors.  Our system is also fully scalable and allows farmers to maximize their space with the ability to grow everything but trees. We plan to sell our proprietary vertical growing systems to farmers and produce growers who wish to establish a higher produce sales yields. We plan to assemble all of our systems on and off site and utilize bulk sourced materials from outsourced manufacturers.

We plan to either sell or license our systems to our future customers. Purchasers of our systems will receive installation service and we will offer support services. We will employ and engage as contractors experienced construction workers to make sure the system is constructed properly. Once the system is constructed, we will perform a final test on the system to make sure everything is in working order, and that the customer is satisfied with the quality of the system.  Alternatively, our clients will be able to license our system and receive technical support and maintenance services from us. Licensing rights are available for one and two-year terms, with options for renewal. Additionally, we plan to provide a senior level consultant to assist farmers in the operation and maintenance of the system. It is our goal to help the customer from start to finish, including everything from assessing the proper contract, finding the right construction crews, and troubleshooting any issues that might come up.

We also plan to acquire or lease our own land and build our own vertical farms and sell produce.  In addition, we plan to offer landowners joint venture opportunities where we can establish and maintain farms on the land of others and provide them with profit sharing opportunities.

We also plan to provide farmers networking services to help them identify local restaurants, wholesale distribution, and even floral shops to distribute their produce.

Our Industry

According to Global Market Insights, Inc., the global vertical farming market is expected to grow at a compound annual growth rate of 27%, from $2 billion in 2017 to over $13 billion by 2024. Growth in vertical farming is being driven by low labor costs, the proximity of vertical farms to consumer bases, accessibility to fresh produce, and the lack of pesticide usage.

 

Source: Global Market Insights, Inc.

21

The three main segments of vertical farming are hydroponics (the process of growing plants in sand, gravel, or liquid, with added nutrients but without soil), aeroponics (the process of growing plants in an air or mist environment without the use of soil), and aquaponics (waste produced by farmed fish or other aquatic animals supplies nutrients for plants grown hydroponically, which in turn purifies the water). While hydroponics technology is expected to continue to dominate the market over the next few years, aeroponics and aquaponics are expected to show rapid growth due to the lower water usage of the former and the rising adoption of the latter by small-scale systems due to cost benefits.

Vertical farming has grown at a rapid pace in Asia-Pacific due to declining food self-sufficiency and arable lands in Singapore, China, and Japan. The Asia-Pacific vertical farming market is expected to reach $4 billion by 2024. Much of this growth will be due to Asian governments’ support of indoor agriculture ranging from national policy initiatives to subsidies.

As of November 2017, over $700 million had been invested in the agriculture (“ag”) technology space, and funding was on track to beat the previous two years combined. The largest increase was in venture capital interest in the space, which nearly doubled in 2017 from 2016.

 

Source: CB Insights

Our Product

The Apex Vertical Farming System is comprised of one reservoir, one water pump, and multiple rows of cylindrical pipes used to flow nutrient-rich water for growing plants. The rows are stacked to reduce overall land, water, and energy usage but are fully accessible for harvesting from the ground – no need for conveyor belts, scaffolding, or complex machinery. Effective for both indoor and outdoor use, the system can be scaled to accommodate different sized plants and root systems.  

Currently we have a commercial product liability insurance policy that allows us to grow produce and sell products commercially anywhere in the United States. We retain the right to sell, license, or enter into joint ventures with our proprietary technology.

Our Supply Chain and Customer Base

Raw materials essential to our businesses are purchased worldwide in the ordinary course of business from numerous suppliers. These raw materials consist mainly of wood and polymerizing vinyl chloride tubing. We also acquire seeds to grow crops in instances where we own and operate a company farm or operate and maintain a farm for a third party.  In general, these materials are available from multiple sources.

22

Our potential customers are farmers, grocery stores, wholesale distribution networks, and residential customers interested in converting their extra yard space into a growing area.

Our Competition

Our primary competitors are AeroFarms, Freight Farms, BrightFarms, and Edenworks. The following is a description of each competitor.

AeroFarms®: Founded in 2004, AeroFarms is an indoor agriculture group that uses aeroponics, LED lights, and growth algorithms. Its patented aeroponics growing system is a closed-loop system that does not use natural light or soil. The company claims the system uses 95% less water than field farming and 40% less than hydroponics. AeroFarms closed a $40 million Series D round in October 2017 with participation from IKEA Group, David Chang of the Momofuku Group, and retired U.S. Army General David Petraeus, bringing its total funding to over $130 million. The company just completed its ninth indoor farm in New Jersey and plans add to its 120-strong team of plant biologists, pathologists, microbiologists, mechanical engineers, system engineers, data scientists, and more.

Freight Farms: Launched in 2010, Freight Farms provides physical and digital solutions for creating local produce ecosystems. The company’s flagship product, The Leafy Green Machine™, is a complete hydroponic growing system capable of producing a variety of lettuces, herbs, and hearty greens. Assembled inside an upcycled shipping container, the prebuilt system includes all necessary components for commercial food production and enables anyone to grow fresh produce year round. Leafy Green Machines can be monitored in real time from any location, and users can purchase supplies directly from their mobile devices. Freight Farms completed a $7.3 million Series B round in June 2017 with participation from Spark Capital. As of December 2017, the company has sold over 160 Leafy Green Machines.

BrightFarms: BrightFarms designs, finances, builds, and operates hydroponic greenhouses at, or near, grocery retailers ─ cutting time, distance, and cost from the produce supply chain. Founded in 2011, the company claims its system uses 80% less water, 90% less land, and 95% less shipping fuel than long-distance field-grown produce. The company currently has three farms located in Illinois, Virginia, and Pennsylvania and is in the process of opening a new location in Ohio. In September 2016, BrightFarms announced it had raised $30 million in Series C funding with participation from Catalyst Ventures.

Edenworks: Founded in 2013, Edenworks is creating a scalable local food supply. It operates aquaponic ecosystems that it claims use 95% less water than conventional farms, no pesticides, and no genetically modified organisms. The Brooklyn-based company services the local Whole Foods with two varietals of microgreens. As of June 2017, Edenworks had raised $2.5 million in funding with plans to move to a larger facility and roll out additional product lines.

Currently there are several vertical, hydroponics companies in the market. However, we believe our system is logistically affordable while still delivering a competitive harvest and offering what we believe is a significant reduction of water and energy usage compared to conventional farming methods.

Our Competitive Advantages

We believe that the following characteristics of our system provide us with a competitive advantage:

·our system allows users to grow both root-based plants and vine plants, while most competing systems do not allow for growth of root-based plants; 

·our system is scalable for both indoor and outdoor use; 

·our system is low-cost compared to competing systems; and 

·our system can be used for both commercial and residential use. 

Our Growth Strategies

We intend to launch a consumer-based version of the Apex Vertical Farming System before the end of the second calendar quarter of 2019. We also intend to establish a farm using our system in Wilmington, Delaware on a residential property on or before the end of 2019. In addition, on December 31, 2017, we entered a Lease with Option to Purchase with Robert J. Wyatt, pursuant to which Mr. Wyatt leased to us certain real property located in the County of Pueblo, Colorado, consisting of approximately 40 acres and we intend to establish a farm on this property. We expect to hire sales representatives who

23

we can train to help us sell our vertical farming systems.  We also plan to focus on developing marketing and sales strategies and sourcing the capital necessary to execute our business plan.

Marketing

We expect to hire sales representatives who we can train to help us sell our vertical farming systems.  We also plan to attend relevant farming conferences and trade shows where we hope to meet potential strategic partners, vendors and customers. We will also market our products through our website and social media sites.  Another marketing initiative for our products will be to advertise in farming and food related print and digital magazines.  As we gain experience through these different marketing initiatives, we will make adjustments to spend more on those that we believe are most effective.  Once we have demonstrated viable marketing options, we will seek to expand our business both nationally and internationally.

Our Intellectual Property

We currently have two patents and one patent application filed with the United States Patent and Trademark Office.

Docket Number	Title	Application No.	Patent No.	Status
LEOT-002	Growing System	14/846,298	9,795,097	Issued Patent
LEOT-003	Growing System	15/788,225	10,004,188	Issued Patent
LEOT-004	Growing System	15/991,624	N/A	Pending

We also own the URL www.apexfarming.com.

We do not currently have any trademarks, but we expect to seek trademark protection of our name, Apex Farming, and our slogan, the “pinnacle of farming,” in the future.

Employees and Contractors

We currently have two (2) employees. One full-time employee, our CEO, is located in Delaware and the other part-time employee, our Vice President of Prefabrication, is located in Pennsylvania.  In addition, we have engaged a Foreman on a consulting basis, who is based in Delaware.  In addition, we use consultants for legal, accounting and administrative support.

Government Regulation

Several governmental agencies regulate various aspects of our business and our products in the United States, including the Food and Drug Administration, the Federal Trade Commission, the Consumer Product Safety Commission, the Department of Agriculture, the Environmental Protection Agency, state attorney general offices and various agencies of the states and localities in which our products are sold. We believe we are in compliance with all material government regulations which apply to our products and operations. However, we are not able to predict the nature of any future laws, regulations, interpretations or applications, nor can we predict what effect future changes would have on our business.

Our potential international customers are subject to similar governmental agency regulations in their various geographic regions. Compliance by our future international customers with such local regulations is beyond our control and we cannot predict their ability to maintain such compliance. However, we strive to assist our customers in meeting local regulations pertaining to the use and sale of our products whenever possible.

Legal Proceedings

We know of no existing or pending legal proceedings against us, nor are we involved as a plaintiff in any proceeding or pending litigation. There are no proceedings in which any of our directors, officers or any of their respective affiliates, or any beneficial stockholder, is an adverse party or has a material interest adverse to our interest.

24

DESCRIPTION OF PROPERTY

Our principal offices are located at 501 Silverside Road, PMB# 352, Wilmington, DE 19809. Our offices are part of a coworking space and we pay an annual rental rate of approximately $1,140 to utilize this space.  

In addition, we entered into a sublease with our CEO for the lease of 1,000 square feet of grow space.  Under the sublease agreement, which was entered into on May 1, 2018, we can use the outdoor space to grow produce for an initial term of three (3) years with the option to extend the term for up to an additional two (2) years. In consideration for this lease, Mr. Woods-Leo received 950,000 shares of our common stock.  We intend to establish a vertical farm on this land in late 2019 or early 2020.  

On December 31, 2017, we entered a Lease with Option to Purchase with Robert J. Wyatt, pursuant to which Mr. Wyatt leased to us certain real property located in the County of Pueblo, Colorado consisting of approximately 40 acres.  The term of this lease is for three (3) years commencing on January 1, 2018 and the annual rent is $1.  We are also required to pay all taxes and utilities for the property. The lease also contains an option to purchase the property upon payment of $10,000 to be held by Mr. Wyatt as option money for the property, which shall be applied to the purchase price at the option closing.  If the option is exercised on or before December 31, 2018, the purchase price shall be $35,000; if the option is exercised after December 31, 2018, and before December 31, 2019, the purchase price shall be $38,000; and if the option is exercised after December 31, 2019, the purchase price shall be $40,000. We intend to establish a vertical farm on this land after relevant surveying, permitting and utility access is completed.   We believe that our farm will be operational sometime in late 2019 or early 2020.

We believe that all our properties have been adequately maintained, are generally in good condition, and are suitable and adequate for our business.

We do not currently lease or own any other real property.

25

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of our operations together with our financial statements and related notes appearing at the end of this offering circular.  This discussion contains forward-looking statements reflecting our current expectations that involve risks and uncertainties.  Actual results and the timing of events may differ materially from those contained in these forward-looking statements due to a number of factors, including those discussed in the section entitled “Risk Factors” and elsewhere in this offering circular.

Overview

We are a vertical farming technology company with what we believe to be a unique vertical farming system that uses patented technology to allow farmers to grow up to 10 times more produce in a given area than they would be able to grow without our system based upon our testing. The vertical hydroponic system, meaning plants are grown without soil by exposing roots to mineral nutrient solutions in a water solvent, aims to reduce expenses associated with energy, water, space, and labor. Our system has been tested by our founder and CEO for over 3 years and such testing has shown that our system can reduce water usage both indoors and outdoors by over 85% compared to farming without our system. Furthermore, unlike most of our competitor’s systems, our system is effective both indoors and outdoors.  Our system is also fully scalable and allows farmers to maximize their space with the ability to grow everything but trees. We plan to sell our proprietary vertical growing systems to farmers and produce growers who wish to establish a higher produce sales yields. We plan to assemble all of our systems on and off site and utilize bulk sourced materials from outsourced manufacturers.

We plan to either sell or license our systems to our future customers. Purchasers of our systems will receive installation service and we will offer support services. We will employ and engage as contractors experienced construction workers to make sure the system is constructed properly. Once the system is constructed, we will perform a final test on the system to make sure everything is in working order, and that the customer is satisfied with the quality of the system.  Alternatively, our clients will be able to license our system and receive technical support and maintenance services from us. Licensing rights are available for one and two-year terms, with options for renewal. Additionally, we plan to provide a senior level consultant to assist farmers in the operation and maintenance of the system. It is our goal to help the customer from start to finish, including everything from assessing the proper contract, finding the right construction crews, and troubleshooting any issues that might come up.

We also plan to acquire or lease our own land and build our own vertical farms and sell produce.  In addition, we plan to offer landowners joint venture opportunities where we can establish and maintain farms on the land of others and provide them with profit sharing opportunities.

We also plan to provide farmers networking services to help them identify local restaurants, wholesale distribution, and even floral shops to distribute their produce.

Since our inception on September 19, 2017, we have devoted substantially all of our efforts to business planning, research and development, product development, general and marketing activities, and raising capital. Accordingly, we are considered to be in the development stage, since we are devoting substantially all of our efforts to research and development, product development, establishing systems and procedures for our business and planned principal operations. We have limited revenues from operations to date and therefore lack meaningful capital reserves, except for the proceeds from our recent offerings described below.  

Emerging Growth Company

Upon the completion of this offering, we may elect to become a public reporting company under the Exchange Act. We will qualify as an “emerging growth company” under the JOBS Act. As a result, we will be permitted to, and intend to, rely on exemptions from certain disclosure requirements. For so long as we are an emerging growth company, we will not be required to:

·have an auditor report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act; 

·comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis); 

26

·submit certain executive compensation matters to shareholder advisory votes, such as “say-on-pay” and “say-on-frequency;” and 

·disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO’s compensation to median employee compensation. 

In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.

We will remain an “emerging growth company” for up to five years, or until the earliest of (i) the last day of the first fiscal year in which our total annual gross revenues exceed $1 billion, (ii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our common shares that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter or (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three year period.

Going Concern

Our current financial condition and the uncertainty surrounding our ability to consummate this offering raises substantial doubt regarding our ability to continue as a going concern. Our financial statements are prepared using U.S. generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, as shown in the accompanying financial statements, we have sustained substantial losses from operations since inception and do not have a predictable revenue stream. In addition, we have used, rather than provided, cash in our operations. The lack of a proven profitable business strategy that would generate a predictable revenue stream raise substantial doubt for our company to continue as a going concern, which is also included in our independent auditor’s report. It is management’s plan in this regard to obtain additional working capital through equity financings. The accompanying financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should we be unable to continue in existence.

As of September 30, 2018, we had $13,947 in cash on hand and our monthly burn rate (i.e., the rate at which we are losing money) from the period from inception to September 30, 2018 was approximately $900.  At this rate, without raising additional capital, we would run out of funds in December 2019.  Our founder and CEO, Mr. Alexander M. Woods-Leo, has verbally agreed to contribute additional capital to us in the amount of up to $50,000 if needed to fund our operations.

Results of Operations

Our company was formed on September 19, 2017.  

For the year ended September 30, 2018, we generated revenue in the amount of $7,500 and our cost of sales was $77,027, which resulted in a gross loss of $69,527.  Our general and administrative expenses totaled $464,103, which consisted primarily of compensation for employees and consultants (including stock-based compensation) and professional fees.  As a result of the foregoing, our net loss for the year ended September 30, 3018 was $533,630.

For the period from inception to September 30, 2017, we generated no revenues and incurred expenses of $4,352. Our net loss for period from inception to September 30, 2017 was $4,352.

Liquidity and Capital Resources

As of September 30, 2018, we had cash and cash equivalents in the amount of $13,947 and total liabilities of $64,043.

Our net cash used in operating activities for the year ended September 30, 2018 was $174,756, which consisted of our net loss of $533,630 and prepaid expenses in the amount of $41,000, offset by stock based compensation in the amount of $327,490, advances from related party in the amount of $5,786, contributed capital of $12,269, depreciation expense of $175, deferred revenue of $4,000 and accounts payable and accrued expenses in the amount of $50,154.  Our net cash used in operating activities for the period from inception to September 30, 2017 was $0, which consisted of our net loss of

27

$4,352, offset by stock based compensation in the amount of $250, advances from related party in the amount of $364 and accounts payable and accrued expenses in the amount of $3,738.  

Our net cash used in investing activities for the year ended September 30, 2018 was $3,500, which consisted of cash paid for purchase of fixed assets. We had no investing activities for the period from inception to September 30, 2017.

Our net cash provided by financing activities for the year ended September 30, 2018 was $192,203, which consisted of cash received for the sale of stock in the amount of $191,203 and cash received from subscription payable in the amount of $1,000. We had no financing activities for the period from inception to September 30, 2017.   

On April 24, 2018, we completed an equity crowdfunding offering under Section 4(a)(6) of the Securities Act of 1933, as amended, or the Securities Act, and Regulation Crowdfunding promulgated thereunder. We raised a total of $206,669 through the sale of 2,952,421 shares of Series Seed Preferred Stock.  As a result of this offering, we received net proceeds of approximately $191,203.  All of the shares of Series Seed Preferred Stock automatically converted into shares of common stock on a 1-to-1 basis upon the initial closing of the Regulation A offering described above.  

Historically, we have been funded through the proceeds of these offerings and capital contributions made by our CEO. There is substantial doubt if we can continue as an on-going business for the next twelve months unless we are successful in generating sufficient revenues from our operations or we obtain additional capital. Due to our early stage of development, we do not anticipate that we will generate sufficient revenues from our operations for the next twelve months. Accordingly, we must raise cash from sources other than operations or our business may fail. It is management’s plan in this regard to obtain additional working capital through equity financings. However, we have not identified any potential source of alternative financing. There can be no guarantees that any such financing would become available to us. If we cannot raise additional capital, we would be required to cease business operations. As a result, investors would lose all of their investment.

Capital Expenditures and Other Obligations

We incurred capital expenditures of $3,500 and $0 in the years ended September 30, 2018 and 2017, respectively. We estimate that our total capital expenditures in the year ended September 30, 2019 will reach approximately $200,000. Such funds will be used to build our own vertical farms in Wilmington, Delaware and in the County of Pueblo, Colorado.  

Plan of Operations

Our primary goal for our first year of operation will be to hire new employees and build out land that we own. Our plan follows below. We are highly dependent upon the success of this offering in implementing the following plan.

Phase One (Mos. 1-3)

Estimated cost: $160,000-$300,000

Immediately, we plan to begin developing marketing and sales strategies. We expect to hire sales representatives who we can train to help us sell our vertical farming systems. We will begin building our farms in Delaware and Colorado and anticipate the cost of doing so will be between $160,000 and $300,000.

Phase Two (Mos. 4-6)

Estimated cost: $300,000

Following successful phase one, we will start growing produce indoors and begin establishing a new facility to prefab our systems in. We will also ramp up our marketing efforts at this stage. 

Phase Three (Mos. 7-9)

Estimated cost: $150,000

Following successful phases one and two, we will begin to roll out our retail sales strategy and increase our marketing efforts.

Phase Four (Mos. 10-12)

Estimated cost: $100,000

28

We hope to be selling our vertical farming systems in this quarter and will concentrate our efforts on promoting our product and expanding its distribution accordingly.

Off-Balance Sheet Arrangements

As of September 30, 2018, we did not have any off-balance sheet arrangements.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires our management to make assumptions, estimates and judgments that affect the amounts reported, including the notes thereto, and related disclosures of commitments and contingencies, if any. We have identified certain accounting policies that are significant to the preparation of our financial statements. These accounting policies are important for an understanding of our financial condition and results of operation. Critical accounting policies are those that are most important to the portrayal of our financial condition and results of operations and require management’s difficult, subjective, or complex judgment, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. Certain accounting estimates are particularly sensitive because of their significance to financial statements and because of the possibility that future events affecting the estimate may differ significantly from management’s current judgments. We believe the following critical accounting policies involve the most significant estimates and judgments used in the preparation of our financial statements:

Revenue and Cost Recognition. We apply revenue recognition provisions pursuant to ASC No. 605, Revenue Recognition, which provides guidance on the recognition, presentation and disclosure of revenue in financial statements filed with the SEC. The guidance outlines the basic criteria that must be met to recognize revenue and provides guidance for disclosure related to revenue recognition policies. Revenue is recognized on the completed contract method. This method is used because the typical contract is completed within one to six weeks and the financial position and results of operations of our company would not vary significantly within that time frame. A contract is considered complete when all costs except insignificant items have been incurred, and the work has been accepted by the customer.

Cash and Cash Equivalents. We consider all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.

Fair Value of Financial Instruments. Our balance sheet includes certain financial instruments. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization. ASC 820, “Fair Value Measurements and Disclosures”, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:

-Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. 

-Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or 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); and inputs that are derived principally from or corroborated by observable market data by correlation or other means. 

-Level 3 - Inputs that are both significant to the fair value measurement and unobservable. 

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of September 30, 2018. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include accrued expenses.

29

Stock-Based Compensation. ASC 718, “Compensation – Stock Compensation”, prescribes accounting and reporting standards for all share-based payment transactions in which employee services are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period). We account for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50, “Equity – Based Payments to Non-Employees.” Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The fair value of the share-based payment transaction is determined at the earlier of performance commitment date or performance completion date.

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Accounting Standards Codification 606 (“ASC 606”)). ASU No. 2014-09 provides guidance for revenue recognition. The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, companies will need to use more judgment and make more estimates than under current guidance.  These may include identifying performance obligations in the contract and estimating the amount of variable consideration to include in the transaction price attributable to each separate performance obligation. Subsequent to the initial standards, the FASB has also issued several ASUs to clarify specific revenue recognition topics. This guidance will be effective for our company for its fiscal year beginning on October 1, 2018. We will adopt using the modified retrospective approach to initially apply the update and recognize the remaining contract value at the date of application. We do not expect the adoption of ASU 2014-09 to have any impact on our total cash flows from operating, investing or financing activities.

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)”. Under this guidance, an entity is required to recognize right-of-use assets and lease liabilities on its balance sheet and disclose key information about leasing arrangements. This guidance offers specific accounting guidance for a lessee, a lessor and sale and leaseback transactions. Lessees and lessors are required to disclose qualitative and quantitative information about leasing arrangements to enable a user of the financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. This guidance is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period, and requires a modified retrospective adoption, with early adoption permitted. We are currently evaluating the impact of the adoption of this standard will have on our financial statements.

In March 2016, the FASB issued ASU 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting”. The standard is intended to simplify several areas of accounting for share-based compensation arrangements, including the income tax impact, classification on the statement of cash flows and forfeitures. ASU 2016-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, and early adoption is permitted. We elected to early adopt the new guidance in the second quarter of fiscal year 2016 which requires us to reflect any adjustments as of January 1, 2016, the beginning of the annual period that includes the interim period of adoption. The primary impact of adoption was the recognition of additional stock compensation expense and paid-in capital for all periods in fiscal year 2016. Additional amendments to the recognition of excess tax benefits, accounting for income taxes and minimum statutory withholding tax requirements had no impact to retained earnings as of January 1, 2016, where the cumulative effect of these changes is required to be recorded. We have elected to account for forfeitures as they occur to determine the amount of compensation cost to be recognized in each period.

30

DIRECTORS, EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES

The following table sets forth the name and position of each of our current executive officers, director and significant employees.

Name	Position	Age	Term of Office	Approximate hours per week for part-time employees
Alexander M. Woods-Leo	Chief Executive Officer, President, Treasurer, Secretary and Director	30	From September 19, 2017	N/A
Robert White	Vice President of Prefabrication	29	From January 28, 2018	10-20

Alexander M. Woods-Leo, CEO, President, Treasurer, Secretary and Director

Alexander M. Woods-Leo has served as our Chief Executive Officer, President, Secretary, Treasurer and our sole director since our inception.  Mr. Woods-Leo served as CEO of Leo Tech Holdings, Inc., from September 2014 to September 2017. Leo Tech Holdings, Inc. is an investment holding company and incubator. Mr. Woods-Leo’s primary responsibilities were to oversee the incubation and run the marketing and consulting practices. Mr. Woods-Leo served as CEO of Leo Tek, Inc., from February 2013 to September 2014. Mr. Woods-Leo operated the company and sought merger and acquisition opportunities to enter application technology businesses. Mr. Woods-Leo holds a Life and Health license (IL, DE). Mr. Woods-Leo is deeply committed to the growth and attainment of success in our company.  

Robert White, Vice President of Prefabrication

Robert White has served as our Vice President of Prefabrication since January 28, 2018. Mr. White has served as Master Carpenter in Temple University from August 2015 to Present.  Mr. White served as Head Fabricator of Virginia Stage Company from July 2014 to June 2015. He served as Chief Set Builder of Media Theatre from July 2013 to June 2014. Mr. White has over sixteen years of carpentry experience and over five years of welding experience. Mr. White has spent the past eleven years working in professional theatre companies designing structural sets. Mr. White has expertise with off-site constructional logistics and transporting prefabricated structures to location for assembly. Mr. White holds a Bachelor of Arts in Theatre Arts from Gettysburg College.

Directors are elected until their successors are duly elected and qualified.

There are no family relationships between any director, executive officer, or any significant employee.

To the best of our knowledge, none of our directors or executive officers has, during the past five years:

·been convicted in a criminal proceeding (excluding traffic violations and other minor offences); or 

·had any petition under the federal bankruptcy laws or any state insolvency law was filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, or any partnership in which he was general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing.  

31

COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth the annual compensation of each of the three highest paid persons who were executive officers or directors during our last completed fiscal year ended September 30, 2018.

Name	Capacities in which Compensation was received	Cash compensation ($)	Other compensation ($)(1)	Total compensation ($)
Alexander M. Woods-Leo	Chief Executive Officer and President	0	150,000	150,000
Robert White	Vice President of Prefabrication	0	994	994

(1)The amounts shown represent shares of common stock. These amounts are equal to the aggregate grant-date fair value with respect to the shares issued, computed in accordance with the ASC Topic 718. 

On May 1, 2018, we entered into an employment agreement with Alexander M. Woods-Leo as the Chief Executive Officer, which was amended on June 1, 2018. Under the employment agreement, as amended, Mr. Woods-Leo is entitled to an annual base salary of $125,000, which shall be increased annually by no less than 5% or such greater amount as is determined by our board of directors.  As we did not have the cash necessary to pay the base salary for at least the first year of Mr. Woods-Leo’s employment, on June 1, 2018, we paid his salary for the first year of his employment (May 1, 2018 until April 30, 2019) in advance through the issuance of 1,785,714 shares of common stock.  Until such time as our cash flow supports the payment of Mr. Woods-Leo’s base salary (as determined in good faith by our board of directors), we are not required to pay such base salary and, instead, the base salary shall accrue on our books as a debt or liability to Mr. Woods-Leo.  Alternatively, at our option, we may pay all or any portion of the base salary by the issuance of common stock having a value that is equal to the then owing amount of accrued base salary as determined by our board of directors in good faith. Mr. Woods-Leo shall be reimbursed for all reasonable and necessary expenses paid by him during the employment term, shall be entitled to three weeks of paid vacation per year, and received a signing bonus of 357,143 shares of common stock. The term of Mr. Woods-Leo’s employment is for three years commencing on May 1, 2018 and automatically renews for successive one-year periods until the employment agreement is terminated in accordance with its terms. If Mr. Woods-Leo is terminated without cause, he is entitled to severance pay for a period equal to the greater of twelve months or the remainder of the term of the agreement

On January 28, 2018, we employed Robert White as Vice President of Prefabrication.  As compensation for the services to be provided by Mr. White, we agreed to issue to Mr. White 21,000 shares of common stock.  We issued 600 shares on January 28, 2018 and agreed to issue Mr. White 1,700 shares for each month that Mr. White remains in our employ. Mr. White’s employment is at will and may be terminated at any time.    

32

SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITYHOLDERS

The following table sets forth information regarding beneficial ownership of our voting stock as of May 9, 2019 (i) by each of our officers and directors who beneficially own more than 10% of our common stock; (ii) by all of our officers and directors as a group; and (iii) by each person who is known by us to beneficially own more than 10% of our common stock.  Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Except as set forth below, each of the beneficial owners listed below has direct ownership of and sole voting power and investment power with respect to the shares. Unless otherwise specified, the address of each of the persons set forth below is in care of our company at 501 Silverside Road, PMB #352, Wilmington, DE 19809.

Title of Class	Name and address of beneficial owner	Amount and nature of beneficial ownership	Amount and nature of beneficial ownership acquirable(1)	Percent of class(2)
Common Stock	Alexander M. Woods-Leo (3)	16,598,041	0	73.05%
Common Stock	All directors and officers as a group	16,669,041	0	73.36%

*Less than 1%.

(1)Includes any securities acquirable within 60 days in accordance with SEC Rule 13d-3(d)(1).   

(2)Based on 22,721,456 shares of our common stock outstanding as of May 9, 2019.   

(3)Includes 2,500,000 shares of common stock held by LeoTech Holdings, Inc. Mr. Woods-Leo is the Chief Executive Officer of LeoTech Holdings, Inc. and has voting and investment power over securities held by it. Mr. Woods-Leo disclaims beneficial ownership of such securities except to the extent of his pecuniary interest therein. 

33

INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS

The following includes a summary of transactions since the beginning of our 2016 fiscal year, or any currently proposed transaction, in which we were or are to be a participant and the amount involved exceeded or exceeds the lesser of $120,000 and one percent of the average of our total assets at year-end for the last two completed fiscal years, and in which any related person had or will have a direct or indirect material interest (other than compensation described under “Compensation of Directors and Executive Officers”).  We believe the terms obtained or consideration that we paid or received, as applicable, in connection with the transactions described below were comparable to terms available or the amounts that would be paid or received, as applicable, in arm’s-length transactions.  

On September 19, 2017, we entered into a technology assignment agreement with LeoTech Holdings, Inc., pursuant to which LeoTech Holdings, Inc. assigned certain patent applications owned by it, as well as the business plan relating to the exploitation of such patents, to us in exchange for 2,500,000 shares of our common stock. Alexander M. Woods-Leo, our CEO and sole director, is also the CEO of LeoTech Holdings, Inc.

On May 1, 2018, we entered into a sublease agreement with Mr. Woods-Leo, whereby Mr. Woods-Leo agreed to sublease to us 1,000 square feet of the premises located at 1105 Monterey Place, Wilmington, DE 19809 for an initial term of three (3) years that may be extended for up to two (2) additional years. In exchange, we issued 950,000 shares of common stock to Mr. Woods-Leo and agreed to issue an additional 380,000 if the agreement is extended for the additional two (2) years.  

Mr. Woods-Leo has also covered various expenses and expects to continue to do so until the completion of this offering.  Mr. Woods-Leo has agreed that these amounts, which will be paid prior to the completion of this offering, will be treated as a capital contribution by him, and will not be repaid to him by us from the proceeds of this offering.  

34

SECURITIES BEING OFFERED

This offering relates to the sale of up to 5,000,000 shares of common stock of our company.

Our authorized capital stock consists of 100,000,000 shares of common stock, $0.0001 par value per share, and 50,000,000 shares of preferred stock, par value $0.0001. As of the date of this offering circular, there are 22,721,456 shares of our common stock issued and outstanding, including 956,844 shares that have already been sold in this offering.

The following is a summary of the rights of our capital stock as provided in our articles of incorporation and bylaws. For more detailed information, please see our articles of incorporation and bylaws, which have been filed as exhibits to the offering statement of which this offering circular is a part.

Common Stock

Voting Rights. The holders of the common stock are entitled to one vote for each share held of record on all matters submitted to a vote of the stockholders. Under our articles of incorporation and bylaws, any corporate action to be taken by vote of stockholders other than for election of directors shall be authorized by the affirmative vote of the majority of votes cast. Directors are elected by a plurality of votes.  Stockholders do not have cumulative voting rights.

Dividend Rights. Subject to preferences that may be applicable to any then-outstanding preferred stock, holders of common stock are entitled to receive ratably those dividends, if any, as may be declared from time to time by the board of directors out of legally available funds.

Liquidation Rights. In the event of our liquidation, dissolution or winding up, holders of common stock will be entitled to share ratably in the net assets legally available for distribution to stockholders after the payment of all of our debts and other liabilities and the satisfaction of any liquidation preference granted to the holders of any then-outstanding shares of preferred stock.

Other Rights. Holders of common stock have no preemptive, conversion or subscription rights and there are no redemption or sinking fund provisions applicable to the common stock. The rights, preferences and privileges of the holders of common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of preferred stock.

Preferred Stock

We are authorized to issue up to 50,000,000 shares of preferred stock. Our articles of incorporation authorize our board of directors to issue these shares in one or more series, to determine the designations and the powers, preferences and rights and the qualifications, limitations and restrictions thereof, including the dividend rights, conversion or exchange rights, voting rights (including the number of votes per share), redemption rights and terms, liquidation preferences, sinking fund provisions and the number of shares constituting the series. Our board of directors could, without stockholder approval, issue preferred stock with voting and other rights that could adversely affect the voting power and other rights of the holders of common stock and which could have the effect of making it more difficult for a third party to acquire, or of discouraging a third party from attempting to acquire, a majority of our outstanding voting stock.

Warrants

We issued a five-year warrant to our outside corporate and securities counsel in exchange for such counsel’s agreement to defer legal fees for up to four months.  The warrant provides the holder with the right to purchase 388,143 shares of common stock at an exercise price of $0.07. The warrant may be exercised on a cashless basis.

Transfer Agent and Registrar

We have engaged Colonial Stock Transfer Company, Inc. as its transfer agent and registrar.  Colonial’s address is 66 Exchange Place, Suite 100, Salt Lake City, Utah. 84111 and its telephone number is (801) 355-5740.  Colonial maintains a website at www.colonialstock.com.

Shares Eligible for Future Sale

Prior to this offering, there was no public market for our common stock. We cannot predict the effect, if any, that market sales of shares of our common stock or the availability of shares of our common stock for sale will have on the market price of our common stock. Sales of substantial amounts of our common stock in the public market could adversely affect the

35

The 26,764,612 shares of common stock outstanding after this offering will be restricted as a result of securities laws. Restricted securities may be sold in the public market only if they have been registered or if they qualify for an exemption from registration under Rule 144 under the Securities Act.

Rule 144

A person who has beneficially owned restricted shares of common stock for at least six months would be entitled to sell their shares provided that (1) such person is not deemed to have been one of our affiliates at the time of, or at any time during the three months preceding, a sale and (2) we are subject to the Exchange Act periodic reporting requirements for at least three months before the sale. Persons who have beneficially owned restricted shares of common stock for at least six months but who are our affiliates at the time of, or any time during the three months preceding, a sale, would be subject to additional

restrictions, by which such person would be entitled to sell within any three-month period a number of shares that does not exceed the greater of either of the following:

•1% of the number of shares then outstanding, which will equal 267,646 shares of common stock immediately after this offering; and 

•the average weekly trading volume of the shares of common stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale. 

Sales under Rule 144 are also limited by manner of sale provisions and notice requirements and to the availability of current public information about us.

36

LEGAL MATTERS

The validity of the common stock offered hereby will be passed upon for us by Sherman & Howard LLC.

EXPERTS

Our financial statements for the year ended September 30, 2018 included in this offering circular have been audited by M&K CPAS, PLLC, an independent registered public accounting firm, as stated in its report appearing herein.  Such financial statements have been so included in reliance upon the report of such firm given upon its authority as an expert in accounting and auditing.   

INTERESTS OF NAMED EXPERTS AND COUNSEL

We issued to our legal counsel, Bevilacqua PLLC, 714,286 shares of common stock and a five-year warrant for the purchase of 388,143 shares of common stock at an exercise price of $0.07 per share. Such securities are issued in exchange for Bevilacqua PLLC’s agreement to defer legal fees for up to four months.

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the SEC an offering statement on Form 1-A under the Securities Act with respect to the common stock offered by this offering circular. This offering circular does not contain all of the information included in the offering statement, portions of which are omitted as permitted by the rules and regulations of the SEC. For further information pertaining to us and the common stock to be sold in this offering, you should refer to the offering statement and its exhibits. Whenever we make reference in this offering circular to any of our contracts, agreements or other documents, the references are not necessarily complete, and you should refer to the exhibits attached to the offering statement for copies of the actual contract, agreement or other document filed as an exhibit to the offering statement or such other document, each such statement being qualified in all respects by such reference. Upon the closing of this offering, we will be subject to the informational requirements of Tier 2 of Regulation A and will be required to file annual reports, semi-annual reports, current reports and other information with the SEC. We anticipate making these documents publicly available, free of charge, on our website as soon as reasonably practicable after filing such documents with the SEC.  

You can read the offering statement and our future filings with the SEC over the Internet at the SEC’s website at www.sec.gov. You may also read and copy any document we file with the SEC at its public reference facility at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. You may also obtain copies of the documents at prescribed rates by writing to the Public Reference Section of the SEC. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference facilities.

37

FINANCIAL STATEMENTS

	Page
Financial Statements for the Years Ended September 30, 2018 and 2017
Report of Independent Registered Public Accounting Firm	F-1
Balance Sheets as of September 30, 2018 and 2017	F-2
Statement of Operations for the Year Ended September 30, 2018 and Period of September 19, 2017 (Inception) to September 30, 2017	F-3
Statements of Changes in Stockholders’ Equity (Deficit) for the Year Ended September 30, 2018 and Period of September 19, 2017 (Inception) to September 30, 2017	F-4
Statement of Cash Flows for the Year Ended September 30, 2018 and Period of September 19, 2017 (Inception) to September 30, 2017	F-5
Notes to the Audited Financial Statements	F-6

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and

Stockholders of Apex Farms Corp.

Opinion on the Financial Statements

We have audited the accompanying balance sheets of Apex Farms Corp. (the Company) as of September 30, 2018 and 2017, and the related statements of operations, stockholders’ equity (deficit), and cash flows for the period from inception September 19, 2017 to September 30, 2017 and the year ended September 30, 2018, and the related notes and schedules (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 September 30, 2018 and 2017, and the results of its operations and its cash flows for the period from inception September 19, 2017 to September 30, 2017, and the year ended September 30, 2018, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

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

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

Our audit included performing procedures to assess the risks of material misstatement of the 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 audit provides a reasonable basis for our opinion.

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company suffered losses from operations which raise substantial doubt about its ability to continue as a going concern. Managements plans regarding those matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ M&K CPAS, PLLC

We have served as the Company’s auditor since 2018.

Houston, TX

January 28, 2019

F-1

APEX FARMS CORP.

BALANCE SHEETS

(AUDITED) 

	September 30, 2018			September 30, 2017
ASSETS
Cash & Cash Equivalents	$	13,947		$	-
Prepaid Expenses		41,000			-
Property, plant and equipment, net		3,325			-
TOTAL ASSETS	$	58,272		$	-
LIABILITIES AND STOCKHOLDERS’ DEFICIT
CURRENT LIABILITIES:
Accounts Payable and accrued expenses	$	53,893		$	3,738
Advances from related party		6,150			364
Deferred Revenue		4,000			-
TOTAL LIABILITIES	$	64,043		$	4,102
STOCKHOLDERS’ DEFICIT:
Preferred stock, $0.0001 par value; 50,000,000 shares authorized; 3,011,469 and 0 issued and outstanding as of September 30, 2018 and 2017, respectively		301			-
Common stock, $0.0001 par value; 100,000,000 shares authorized; 16,924,057 and 12,500,000 shares issued and outstanding as of September 30, 2018 and September 30, 2017, respectively		1,692			1,250
Stock Receivable		-			(1,000	)
Additional paid in capital		530,218			-
Accumulated deficit		(537,982	)		(4,352	)
TOTAL STOCKHOLDERS’ EQUITY (DEFICIT)		(5,771)			(4,102	)
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)	$	58,272		$	-

The accompanying notes are an integral part of these audited financial statements.

F-2

APEX FARMS CORP.

STATEMENTS OF OPERATIONS

(AUDITED)

	Year Ended September 30, 2018		For the Period of September 19, 2017 (Inception) to September 30, 2017
Revenue	$	7,500	$	-
Cost of sales		(77,027)		-
Gross Loss		(69,527)		-
Expenses:
General and administrative		464,103		4,352
Operating loss		(533,630)		(4,352	)
Net loss	$	(533,630)	$	(4,352	)
Basic and diluted loss per share	$	(0.04)	$	(0.00	)
Weighted average number of common shares outstanding – basic and diluted		14,714,919		12,500,000

The accompanying notes are an integral part of these audited financial statements.

F-3

APEX FARMS CORP.

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)

(AUDITED)

	Preferred Shares	Par Value Preferred Shares		Common Shares	Par Value Common Shares		Stock Receivable			Additional Paid-in Capital		Accumulated Deficit			Total
Balances, September 19, 2017	-	$	-	-	$	-	$	-		$	-	$	-		$	-
Issuance of 12,500,000 shares of common stock for subscription and patent	-		-	12,500,000		1,250		(1,000	)		-		-			250
Net loss	-		-	-		-		-			-		(4,352	)		(4,352	)
Balances, September 30, 2017	-	$	-	12,500,000	$	1,250	$	(1,000	)	$	-	$	(4,352	)	$	(4,102	)
Stock based compensation	-		-	4,424,057		442		-			327,048		-			327,490
Issuance of 3,011,469 shares of preferred seed stock for cash, net	3,011,469		301	-		-		-			190,902		-			191,203
Contribution by officer	-		-	-		-		-			12,269		-			12,269
Cash received from stock receivable	-		-	-		-		1,000			-		-			1,000
Net loss	-		-	-		-		-			-		(533,630	)		(533,63	)
Balances, September 30, 2018	3,011,469	$	301	16,924,057	$	1,692	$	-		$	530,218	$	(537,982	)	$	(5,771	)

The accompanying notes are an integral part of these audited financial statements.

F-4

APEX FARMS CORP.

STATEMENT OF CASH FLOWS

(AUDITED)

	Year Ended September 30, 2018			For the Period September 19, 2017 (Inception) to September 30, 2018
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(533,630	)	$	(4,352	)
Adjustments to reconcile net loss to net cash used in operations:
Stock based compensation		327,490			250
Contributed capital		12,269			-
Depreciation expense		175			-
Change in current assets and liabilities:
Prepaid expenses		(41,000	)		-
Accounts payable and accrued expenses		50,154			3,738
Advances from related party		5,786			364
Deferred revenue		4,000			-
Net Cash Used in Operating Activities		(174,756	)		-
CASH FLOWS FROM INVESTING ACTIVITIES
Cash paid for purchase of fixed assets		(3,500	)		-
Net Cash Used in Investing Activities		(3,500	)		-
CASH FLOWS FROM FINANCING ACTIVITIES
Stock sold for cash		191,203			-
Cash received from subscription payable		1,000			-
Net Cash Provided by Financing Activities		192,203			-
CHANGE IN CASH		13,947			-
CASH AT BEGINNING OF PERIOD	$	-		$	-
CASH AT END OF PERIOD	$	13,947		$	-
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for:
Interest	$	-		$	-
Income taxes	$	-		$	-
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Stock issued for stock receivable	$	-		$	1,000

The accompanying notes are an integral part of these audited financial statements.

F-5

APEX FARMS CORP.

NOTES TO THE AUDITED FINANCIAL STATEMENTS

SEPTEMBER 30, 2018

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

Apex Farms Corp., a Nevada corporation (“the Company”), was incorporated under the laws of the State of Nevada on September 19, 2017 with the name Apex Farms Corp. The Company intends to serve as a vehicle to make a business out of proprietary technology. As of September 30, 2018, the Company has limited operations.

The Company has elected September 30th as its fiscal year end.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

This summary of significant accounting policies is presented to assist in understanding the Company's financial statements. These accounting policies conform to accounting principles, generally accepted in the United States of America, and have been consistently applied in the preparation of the financial statements.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. In the opinion of management, all adjustments necessary in order to make the financial statements not misleading have been included. Actual results could differ from those estimates.

Revenue and Cost Recognition

The Company applies revenue recognition provisions pursuant to ASC No. 605, Revenue Recognition, which provides guidance on the recognition, presentation and disclosure of revenue in financial statements filed with the Securities and Exchange Commission. The guidance outlines the basic criteria that must be met to recognize revenue and provides guidance for disclosure related to revenue recognition policies.

Revenue is recognized on the completed contract method. This method is used because the typical contract is completed within one to six weeks and the financial position and results of operations of the Company would not vary significantly within that time frame. A contract is considered complete when all costs except insignificant items have been incurred, and the work has been accepted by the customer.

During the year ended September 30, 2018 the company completed one installation with a third party customer totaling $7,500 in revenues.  There was no revenue for the period ended September 30, 2017.

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. Cash and cash equivalents at September 30, 2018 and 2017 were $13,947 and $0, respectively.

Income Taxes

The Company accounts for income taxes under ASC 740, “Income Taxes.” Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations. No deferred tax assets or liabilities were recognized at September 30, 2018.

F-6

Basic Earnings (Loss) Per Share

The Company computes basic and diluted earnings (loss) per share in accordance with ASC Topic 260, Earnings per Share. Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the reporting period. Diluted earnings (loss) per share reflects the potential dilution that could occur if stock options and other commitments to issue common stock were exercised or equity awards vest resulting in the issuance of common stock that could share in the earnings of the Company.

The Company does not have any potentially dilutive instruments as of September 30, 2018 and, thus, anti-dilution issues are not applicable.

Fair Value of Financial Instruments

The Company’s balance sheet includes certain financial instruments. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization.

ASC 820, Fair Value Measurements and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:

Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or 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); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

Level 3 - Inputs that are both significant to the fair value measurement and unobservable.

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of September 30, 2018 and 2017. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include accrued expenses.

Related Parties

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

Share-Based Compensation

ASC 718, “Compensation – Stock Compensation”, prescribes accounting and reporting standards for all share-based payment transactions in which employee services are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).

The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50, “Equity – Based Payments to Non-Employees.” Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable: (a) the goods or

F-7

services received; or (b) the equity instruments issued. The fair value of the share-based payment transaction is determined at the earlier of performance commitment date or performance completion date.

The Company had no stock-based compensation plans as of September 30, 2018 and September 30, 2017.

The Company’s stock based compensation for the year ended September 30, 2018 was $327,490.  The Company’s stock based compensation for the period ended September 30, 2017 was $250.

Recently Issued Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Accounting Standards Codification 606 (“ASC 606”)). ASU No. 2014-09 provides guidance for revenue recognition. The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, companies will need to use more judgment and make more estimates than under current guidance.  These may include identifying performance obligations in the contract and estimating the amount of variable consideration to include in the transaction price attributable to each separate performance obligation. Subsequent to the initial standards, the FASB has also issued several ASUs to clarify specific revenue recognition topics. This guidance will be effective for the Company for its fiscal year beginning on October 1, 2018. The Company will adopt using the modified retrospective approach to initially apply the update and recognize the remaining contract value at the date of application. The Company does not expect the adoption of ASU 2014-09 to have any impact on its total cash flows from operating, investing or financing activities.

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)”. Under this guidance, an entity is required to recognize right-of-use assets and lease liabilities on its balance sheet and disclose key information about leasing arrangements. This guidance offers specific accounting guidance for a lessee, a lessor and sale and leaseback transactions. Lessees and lessors are required to disclose qualitative and quantitative information about leasing arrangements to enable a user of the financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. This guidance is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period, and requires a modified retrospective adoption, with early adoption permitted. The Company is currently evaluating the impact of the adoption of this standard will have on its financial statements.

In March 2016, the FASB issued ASU 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting”. The standard is intended to simplify several areas of accounting for share-based compensation arrangements, including the income tax impact, classification on the statement of cash flows and forfeitures. ASU 2016-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, and early adoption is permitted. The Company elected to early adopt the new guidance in the second quarter of fiscal year 2016 which requires it to reflect any adjustments as of January 1, 2016, the beginning of the annual period that includes the interim period of adoption. The primary impact of adoption was the recognition of additional stock compensation expense and paid-in capital for all periods in fiscal year 2016. Additional amendments to the recognition of excess tax benefits, accounting for income taxes and minimum statutory withholding tax requirements had no impact to retained earnings as of January 1, 2016, where the cumulative effect of these changes is required to be recorded. The Company has elected to account for forfeitures as they occur to determine the amount of compensation cost to be recognized in each period.

NOTE 3 – GOING CONCERN

The Company’s financial statements are prepared in accordance with generally accepted accounting principles applicable to a going concern that contemplates the realization of assets and liquidation of liabilities in the normal course of business.

The Company demonstrates adverse conditions that raise substantial doubt about the Company’s ability to continue as a going concern for one year following the issuance of these financial statements. These adverse conditions are negative financial trends, specifically operating loss, working capital deficiency, and other adverse key financial ratios.

The Company has not established any source of revenue to cover its operating costs. Management plans to fund operating expenses with related party contributions to capital. There is no assurance that management's plan will be successful.

F-8

The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event that the Company cannot continue as a going concern.

NOTE 4 – PREPAID EXPENSES

On April 25, 2018, the Company paid $100,000 in cash to a third party for prepaid construction and consulting. During the year ended September 30, 2018, $59,000 was expensed for business consulting work performed.  The remaining $41,000 will be used to pay for additional consulting services and the construction of a greenhouse to be used by the Company.

NOTE 5 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES

The Company had accounts payable and accrued expenses totaling $53,894 and $3,738 at September 30, 2018 and 2017, respectively.  These consisted primarily of professional fees and marketing expenses.

NOTE 6 – DEFERRED REVENUE

Deferred revenue totaled $4,000 and $0 as of September 30, 2018 and 2017, respectively. A customer had made a payment on a system but not confirmed a date to set up the system.

NOTE 7 – INCOME TAXES

The Company has not recognized an income tax benefit for its operating losses generated based on uncertainties concerning its ability to generate taxable income in future periods. The tax benefit for the period presented is offset by a valuation allowance established against deferred tax assets arising from the net operating losses, the realization of which could not be considered more likely than not. In future periods, tax benefits and related deferred tax assets will be recognized when management considers realization of such amounts to be more likely than not. As of September 30, 2018, the Company incurred a cumulative net loss carryforward of approximately $197,973. NOLs begin expiring in 2037. The loss results in a deferred tax asset of approximately $41,574 at the effective statutory rate of 21%. The deferred tax asset has been off-set by an equal valuation allowance.

	September 30, 2018			September 30, 2017
Deferred tax asset, generated from net operating loss at statutory rates	$	41,574		$	651
Valuation allowance	$	(41,574	)	$	(651	)

NOTE 8 – COMMITMENTS AND CONTINGENCIES

The Company follows ASC 450-20, Loss Contingencies, to report accounting for contingencies. Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. Except as set forth below, there were no commitment or contingencies as of September 30, 2018.

On May 1, 2018, the Company entered into an employment agreement with Mr. Woods-Leo as the Chief Executive Officer, which was amended on June 1, 2018. Under the employment agreement, as amended, Mr. Woods-Leo is entitled to an annual base salary of $125,000, which shall be increased annually by no less than 5% or such greater amount as is determined by the Company’s board of directors.  As the Company does not have the cash necessary to pay the base salary for at least the first year Mr. Woods-Leo’s employment, on June 1, 2018, the Company paid his salary for the first year of his employment (May 1, 2018 until April 30, 2019) in advance through the issuance of 1,785,714 shares of Common Stock. Until such time as the Company’s cash flow supports the payment of Mr. Woods-Leo’s base salary (as determined in good faith by our board of directors), the Company is not required to pay such base salary and, instead, the base salary shall accrue on the Company’s books as a debt or liability to Mr. Woods-Leo. Alternatively, at the Company’s option, the Company may pay all or any portion of the base salary by the issuance of Common Stock having a value that is equal to the then owing amount of accrued base salary as determined by the board of directors in good faith. Mr. Woods-Leo shall be reimbursed for all reasonable and necessary expenses paid by him during the employment term, shall be entitled to three weeks of paid vacation per year, and received a signing bonus of 357,143 shares of Common Stock. The term of Mr. Woods-Leo’s employment is for three years commencing on May 1, 2018 and automatically renews for successive one-year periods until the employment agreement is terminated in accordance with its terms. If Mr. Woods-Leo is terminated

F-9

without cause, he is entitled to severance pay for a period equal to the greater of twelve months or the remainder of the term of the agreement.

On January 1, 2018 the Company entered into a Royalty Agreement with David Allen.  Pursuant to the terms of the Royalty Agreement, the Company is required to pay to Mr. Allen a royalty at a rate of 1% on annual net sales after taxes.  The Royalty Agreement defines “net sales” as gross sales of the Company and its licensees and sublicensees excluding excise duty and sales tax.  The term of the agreement is for three years commencing on January 1, 2018 and ending on December 31, 2020.  The royalty is due and payable each year within sixty (60) days following the close of the applicable fiscal year.  If the Company does not timely pay the royalty when due, the Company is required to pay interest in the unpaid amount at a rate of 10% per annum.

NOTE 9 – SHAREHOLDER’S EQUITY

Preferred Stock

The authorized preferred stock of the Company consists of 50,000,000 shares with a par value of $0.0001. The Company had no shares of preferred stock issued and outstanding at September 30, 2017 and 3,011,469 shares of preferred stock issued and outstanding as of September 30, 2018.

On April 4, 2018, the Company filed Amended and Restated Articles of Incorporation with the Nevada Secretary of State to, among other things, designate 10,000,000 shares of its preferred stock as “Series Seed Preferred Stock” and establish the terms thereof. Holders of shares of Series Seed Preferred Stock vote together with the holders of Common Stock on an as-if-converted to Common Stock basis. Except as provided by law or as set forth in the Amended and Restated Articles of Incorporation, the holders of shares of Series Seed Preferred Stock vote together with the holders of shares of Common Stock as a single class. The Company is not required to pay dividends at any specific rate on the Series Seed Preferred Stock; provided, however, that if any dividend is paid on the outstanding Common Stock, the Series Seed Preferred Stock would participate in such dividend on a pari passu basis with the holders of Common Stock on an as converted to Common Stock basis. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company or any Deemed Liquidation Event (as defined in the Amended and Restated Articles of Incorporation), before any payment shall be made to the holders of Common Stock by reason of their ownership thereof, the holders of shares of Series Seed Preferred Stock then outstanding shall be entitled to be paid out of the funds and assets available for distribution to its stockholders, an amount per share equal to the greater of (a) $0.07 for such share of Series Seed Preferred Stock, plus any dividends declared but unpaid thereon, or (b) such amount per share as would have been payable had all shares of Series Seed Preferred Stock been converted into Common Stock immediately prior to such liquidation, dissolution or winding up or Deemed Liquidation Event. Each share of Series Seed Preferred Stock is convertible at any time at the option of the holder into one share of Common Stock for each share of Series Seed Preferred Stock, subject to adjustment in the event of any stock splits, stock combinations, recapitalizations and similar transactions. In addition, upon either (a) the closing of the sale of shares of Common Stock to the public in a public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Securities Act”), or a qualified offering statement under Regulation A of the Securities Act, or (b) the date and time, or the occurrence of an event, specified by vote or written consent of the holders of at least a majority of the outstanding shares of Series Seed Preferred at the time of such vote or consent, voting as a single class on an as-converted basis, (i) all outstanding shares of Series Seed Preferred Stock shall automatically be converted into shares of Common Stock, at the foregoing conversion ratio.

On April 24, 2018, the Company completed an equity crowdfunding offering under Section 4(a)(6) of the Securities Act and Regulation Crowdfunding promulgated thereunder. The Company raised a total of $206,669 through the sale of 2,952,421 shares of Series Seed Preferred Stock. As a result of this offering, the Company received net proceeds of approximately $191,203. In connection with this offering, the Company also issued 59,048 shares of Series Seed Preferred Stock to First Democracy VC, the platform for the offering, as partial consideration for their services.

Common Stock

The authorized Common Stock of the Company consists of 100,000,000 shares with a par value of $0.0001. There were 12,500,000 shares of Common Stock issued and outstanding at September 30, and 16,924,057 shares of Common Stock issued and outstanding at September 30, 2018.

On September 19, 2017, the Company issued 10,000,000 founder’s shares of restricted Common Stock valued at $1,000 at par value ($.0001) to our sole officer and director, Mr. Alexander M. Woods-Leo, in exchange for the development of the business plan for the Company.

F-10

On September 25, 2017, the Company issued 2,500,000 founder’s shares of restricted Common Stock valued at $250 at par value ($.0001) to Mr. Woods-Leo, in exchange for patents which were not yet developed. This resulted in stock based compensation of $250.

On May 1, 2018, the Company entered into a sublease with Mr. Woods-Leo for the lease of 1,000 square feet of grow space. Under the sublease agreement, the Company can use the outdoor space to grow produce for an initial term of three (3) years with the option to extend the term for up to an additional two (2) years. In consideration for this lease, Mr. Woods-Leo received 950,000 shares of the Company’s Common Stock valued at $66,500 based on recent cash selling prices of shares.

On May 1, 2018, the Company entered into an employment agreement with Mr. Woods-Leo as the Chief Executive Officer, which was amended on June 1, 2018. Under the employment agreement, as amended, Mr. Woods-Leo is entitled to an annual base salary of $125,000, which shall be increased annually by no less than 5% or such greater amount as is determined by the Company’s board of directors.  As the Company does not have the cash necessary to pay the base salary for at least the first year Mr. Woods-Leo’s employment, on June 1, 2018, the Company paid his salary for the first year of his employment (May 1, 2018 until April 30, 2019) in advance through the issuance of 1,785,714 shares of Common Stock valued at $125,000 based on recent cash selling prices of shares. Mr. Woods-Leo also received a signing bonus of 357,143 shares of Common Stock valued at $25,000 based on recent cash selling prices of shares.

On January 28, 2018, the Company employed Robert White as Vice President of Prefabrication. As compensation for the services to be provided by Mr. White, the Company agreed to issue to Mr. White 21,000 shares of Common Stock. The Company issued 600 shares on January 28, 2018 and agreed to issue Mr. White 1,700 shares for each month that Mr. White remains in the Company’s employ, valued at a total of $1,750 as of September 30, 2018 based on recent cash selling prices of shares. Mr. White’s employment is at will and may be terminated at any time. 

In January 2018, the Company entered into separate consulting agreements with VentureNet Capital Group. Inc., Tom Preziuso, Dave Allen and Thomas Wick, pursuant to which, as sole compensation, the Company issued (or agreed to issue in the case of Mr. Wick) to these consultants 500,000, 300,000, 500,000 and 25,000 shares of the Company’s Common Stock, respectively, valued at a total of $91,000 based on recent cash selling prices of shares. Mr. Wick was issued 1,000 shares on January 27, 2018 and the remaining shares will be issued over the year at the rate of one-twelfth per month.

The Company did not have any potentially dilutive instruments as of September 30, 2018 and 2017 and, thus, anti- dilution issues are not applicable.

Warrant

On January 11, 2018, the Company issued a five-year warrant to its outside corporate and securities counsel in exchange for such counsel’s agreement to defer legal fees for up to four months. The warrant provides the holder with the right to purchase 388,143 shares of Common Stock at an exercise price of $0.07 valued at $17,806 on the grant date. The warrant may be exercised on a cashless basis.

This warrant does not trade in an active securities market, and as such, the Company estimates the fair value of the warrant using the Black-Scholes Option Pricing Model using the following assumptions:

Risk free interest rates	0	%
Expected life	5 years
Estimated volatility	83	%
Dividend yield	—	%

The risk-free interest rate assumption is based upon observed interest rates on the United States government securities appropriate for the term of the warrant.

The expected term is based on the remaining term of the warrant.

The Company determined the expected volatility assumption using the historical volatility of comparable public companies’ common stock. The Company will continue to monitor peer companies and other relevant factors used to measure expected volatility, until such time that the Company’s common stock has enough market history to use historical volatility.

F-11

The dividend yield assumption is based on the Company’s history and expectation of dividend payouts. The Company has never declared or paid any cash dividends on its common stock, and the Company does not anticipate paying any cash dividends in the foreseeable future.

NOTE 10 – RELATED-PARTY TRANSACTIONS

Equity

On September 19, 2017, the Company issued 10,000,000 founder’s shares of restricted Common Stock valued at $1,000 at par value ($.0001) to its sole officer and director, Mr. Alexander M. Woods-Leo, in exchange for the development of the business plan for the Company.

On September 25, 2017, the Company issued 2,500,000 founder’s shares of restricted Common Stock valued at $250 at par value ($.0001), to Mr. Woods-Leo, in exchange for patents which were not yet developed. This resulted in stock based compensation of $250.

On May 1, 2018, the Company entered into a sublease with Mr. Woods-Leo for the lease of 1,000 square feet of grow space. Under the sublease agreement, the Company can use the outdoor space to grow produce for an initial term of three (3) years with the option to extend the term for up to an additional two (2) years. In consideration for this lease, Mr. Woods-Leo received 950,000 shares of the Company’s Common Stock valued at $66,500 based on recent cash selling prices of shares.

On May 1, 2018, the Company entered into an employment agreement with Mr. Woods-Leo as the Chief Executive Officer, which was amended on June 1, 2018. Under the employment agreement, as amended, Mr. Woods-Leo is entitled to an annual base salary of $125,000, which shall be increased annually by no less than 5% or such greater amount as is determined by the Company’s board of directors.  As the Company does not have the cash necessary to pay the base salary for at least the first year Mr. Woods-Leo’s employment, on June 1, 2018, the Company paid his salary for the first year of his employment (May 1, 2018 until April 30, 2019) in advance through the issuance of 1,785,714 shares of Common Stock. Until such time as the Company’s cash flow supports the payment of Mr. Woods-Leo’s base salary (as determined in good faith by our board of directors), the Company is not required to pay such base salary and, instead, the base salary shall accrue on the Company’s books as a debt or liability to Mr. Woods-Leo. Alternatively, at the Company’s option, the Company may pay all or any portion of the base salary by the issuance of Common Stock having a value that is equal to the then owing amount of accrued base salary as determined by the board of directors in good faith. Mr. Woods-Leo shall be reimbursed for all reasonable and necessary expenses paid by him during the employment term, shall be entitled to three weeks of paid vacation per year, and received a signing bonus of 357,143 shares of Common Stock. The term of Mr. Woods-Leo’s employment is for three years commencing on May 1, 2018 and automatically renews for successive one-year periods until the employment agreement is terminated in accordance with its terms. If Mr. Woods-Leo is terminated without cause, he is entitled to severance pay for a period equal to the greater of twelve months or the remainder of the term of the agreement.

Additional paid-in capital

During the period ended June 30, 2018, Mr. Woods-Leo paid expenses on behalf of the Company totaling $11,905.  At this time, the total debt owed to Mr. Woods-Leo, $12,269, was forgiven and that amount was recorded as additional paid-in capital.

Advances

During the period ended September 30, 2017, the Company’s CEO, Mr. Alexander M. Woods-Leo, paid expenses on behalf of the Company totaling $364. These expenses were recorded as advances from related party and consisted primarily of filing fees.

As of September 30, 2018, Mr. Woods-Leo has paid expenses on behalf of the Company totaling $6,150.  This debt is recorded as advances from related party and is unsecured, noninterest-bearing and payable on demand.

NOTE 11 – PREPAID EXENSES

On April 25, 2018, the Company paid $100,000 to a vendor for business consulting and the construction of a greenhouse to be used by the business.  As of September 30, 2018, the vendor had provided $59,000 in consulting and construction work to the Company, leaving a remaining balance of $41,000 as of September 30, 2018.

F-12

NOTE 12 – SUBSEQUENT EVENTS

Management has evaluated subsequent events through January 28, 2018. Based on our evaluation, except as set forth below, no events have occurred requiring adjustment or disclosure.

Since September 30, 2018, the Company has issued an aggregate of 6,800 shares of Common Stock to Robert White and an aggregate of 8,000 shares of Common Stock to Thomas Wick under the agreements described in Note 8.

Since September 30, 2018, the Company has completed multiple closings of its offering under Regulation A of Section 3(b) of the Securities Act in which the Company has raised a total of $91,567.80 through the sale of 457,839 shares of Common Stock.  As a result of this offering, the Company has received net proceeds of approximately $3,993.48.

Upon completion of the first closing of the Regulation A offering on October 1, 2018, all shares of the Company’s Series Seed Preferred Stock were automatically converted into 3,011,469 shares of Common Stock (see Note 9).

F-13

PART III – EXHIBITS

Exhibit Index

Exhibit No.	Description
2.1	Amended and Restated Articles of Incorporation of Apex Farms Corp.
2.2	Bylaws of Apex Farms Corp.
3.1	Warrant issued by Apex Farms Corp. to Bevilacqua PLLC on January 11, 2018
3.2*	Form of Warrant issued by Apex Farms Corp. to StartEngine Crowdfunding, Inc. (included in Exhibit 6.15)
4.1*	Form of Subscription Agreement
6.1	Technology Assignment Agreement, dated September 19, 2017, between LeoTech Holdings, Inc. and Apex Farms Corp.
6.2	Royalty Agreement, dated January 1, 2018, between Apex Farms Corp. and David Allen
6.3	Sublease, dated May 1, 2018, between Alexander Mr. Woods-Leo and Apex Farms Corp.
6.4	Lease with Option to Purchase, dated December 31, 2017, between Robert J. Wyatt and Apex Farms Corp.
6.5	Employment Agreement, dated May 1, 2018, between Apex Farms Corp. and Alexander Mr. Woods-Leo
6.6	Amendment No. 1 to Employment Agreement, dated June 1, 2018, between Apex Farms Corp. and Alexander Mr. Woods-Leo
6.7	Offer Letter, dated January 26, 2018, between Apex Farms Corp. and Robert White
6.8	Independent Contractor Agreement, dated April 23, 2018, between Apex Farms Corp. and Phoenix Logistics LLC
6.9	Consulting Agreement, dated January 26, 2018, between Apex Farms Corp. and Dave Allen
6.10	Consulting Agreement, dated January 26, 2018, between Apex Farms Corp. and Thomas Wick
6.11	Consulting Agreement, dated January 23, 2018, between Apex Farms Corp. and VentureNet Capital Group, Inc.
6.12	Consulting Agreement, dated January 23, 2018, between Apex Farms Corp. and Tom Preziuso
6.13	Engagement Letter between Apex Farms Corp. and Bevilacqua PLLC
6.14	Supplement to Engagement Letter between Apex Farms Corp. and Bevilacqua PLLC
6.15*	Posting Agreement, dated April 18, 2019, between StartEngine Crowdfunding, Inc. and Apex Farms Corp.
8.1*	Escrow Services Agreement, dated May 13, 2019, between Prime Trust, LLC and Apex Farms Corp.
11.1*	Consent of M&K CPAS, PLLC
11.2	Consent of Sherman & Howard LLC (included in Exhibit 12.1)
12.1	Opinion of Sherman & Howard LLC
13.1	“Testing the Waters” Materials

* Filed herewith.

All other exhibits were previously filed.  

III-1

SIGNATURES

Pursuant to the requirements of Regulation A, the issuer certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form 1-A and has duly caused this offering statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Wilmington, County of New Castle, State of Delaware on May 15, 2019.

APEX FARMS CORP.
By:	/s/ Alexander M. Woods-Leo
	Alexander M. Woods-Leo CEO and President

This offering statement has been signed by the following persons, in the capacities, and on the dates indicated.

SIGNATURE	TITLE	DATE
/s/ Alexander M. Woods-Leo	CEO, President, Secretary, Treasurer and Director (principal executive officer and principal financial and accounting officer)	May 15, 2019
Alexander M. Woods-Leo

EX1A-6 MAT CTRCT

POSTING AGREEMENT

THIS POSTING AGREEMENT (the “Agreement”) is made as of 04/18/2019, between StartEngine Crowdfunding, Inc. (“StartEngine”), a Delaware corporation, and Apex Farms Corp., a Nevada corporation (the “Company”), to act as the Company’s online intermediary technology platform (the “Platform”) in connection with the Company’s proposed offering promulgated under Regulation A (“Reg A+”) under the Securities Act of 1933, as amended (the “Securities Act”), (the “Offering”) of common or preferred stock (the “Securities”).

WHEREAS, StartEngine operates the website www.startengine.com, an intermediary technology platform that permits issuers to independently connect with prospective Investors (as defined below) on the Platform.     

WHEREAS, the Company and StartEngine wish to work cooperatively based upon the terms and conditions herein.

NOW, THEREFORE, the undersigned, in consideration of the foregoing and for other good and valuable consideration, receipt and sufficiency of which is hereby acknowledged, intending to be legally bound, mutually hereby agree as follows:

1.Appointment.  Subject to the terms and conditions of this Agreement, the Company hereby engages StartEngine, and StartEngine hereby agrees to provide, the services detailed herein as the Company’s intermediary funding platform in connection with the Offering.  The Company will be permitted to make available certain offering documents to prospective Investors (as defined below) on the Platform. The Company acknowledges that StartEngine is not a registered broker-dealer under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or registered as an investment advisor under the Investment Advisers Act of 1940, as amended (the “Advisors Act”), and that StartEngine will not perform any activities requiring registration with or membership of the Financial Industry Regulatory Authority (“FINRA”) or the Securities and Exchange Commission (the “SEC”).     

The Company further agrees to engage StartEngine Secure, which will renew annually. Please see Appendix C for the full agreement with StartEngine Secure.  Company agrees to permit StartEngine Secondary to use the Company’s logo and trademarks for permitting secondary trading of the securities offered by the Company.

2.           Services.     Subject to the terms of this Agreement, StartEngine agrees to permit the Company to post the Offering on the Platform, which can be utilized by the Company for “testing the waters” and the offering and sale of securities pursuant to Reg A+.  The Company’s use of the Platform shall be subject to the terms of use and privacy policy, which may be amended from time to time, posted on the Platform.  StartEngine grants the Company a limited and revocable license to use the Platform in accordance with the terms of this Agreement.  The Company agrees to engage a securities attorney or securities compliance company for a review of any and all Test the Waters material appearing on the Platform prior to posting said material on the Platform and the Company shall provide all necessary information and pay the requisite fees to complete the Bad Actor Check for compliance with Reg A Rule 262 prior to appearing on the Platform.  StartEngine reserves the right to terminate use of the Platform if it becomes aware of a violation of the requirements of this Agreement or any law.  StartEngine also reserves the right to terminate this Agreement if the Company does not file Form 1-A with the SEC within 90 days of posting on the Platform.  In the event the Offering is terminated, all funds held in escrow shall be promptly returned to Investors.  Furthermore, if the Offering is terminated for any reason the campaign page will be promptly removed, the Company will not be entitled to any data that has accumulated or been collected by StartEngine, and the Company may not appear on a competitor’s platform for 30 days. StartEngine shall offer a Service Level Agreement (“SLA”) during the term of the Company’s campaign attached as Appendix D.

The Company agrees that it shall be required to engage an escrow agent under a separate agreement to provide escrow services for the Offering and that StartEngine will be a party to such agreement, with the authority to order disbursements thereunder.  The Company agrees to comply with the broker-dealer registration requirements of any state into which it offers or sells the Securities, including where necessary engaging a registered broker or making appropriate filings by the Company or its employees. The Company shall inform StartEngine with respect to any states that it is not making offerings in.

The Company further agrees to engage StartEngine Crowdfunding Inc. to provide this service through StartEngine Secure, which will renew annually. Please see Appendix C for the full agreement with StartEngine Secure.  Company agrees to permit StartEngine Secondary to use the Company’s logo and trademarks for permitting secondary trading of the securities offered by the Company.

At the request of StartEngine, Company must offer a 10% bonus on the price of securities, for a 24 hour period, to all active StartEngine shareholders. If Company is conducting a revenue share offering, they must offer offer 10% additional participation on the allocated revenue. If Company is conducting a debt offering, they must offer 10% additional payment on the interest.

3.       Information and Offering Materials.  

         (a)         The Company recognizes that, in completing its engagement hereunder, StartEngine may be using and relying on both publicly available information and principally on data, material and other information (including non-public information) furnished to StartEngine by the Company. The Company will furnish to prospective Investors any and all information and data concerning the Company, its business, financial condition and plans for the Offering that are required by state and Federal securities regulations (the “Information”), including any “test-the-waters” communications and materials which summarize the opportunity for potential investors to be used in connection with the Offering to the extent such material is made available (collectively, the “Offering Materials”). Any Information and Offering Materials forwarded to prospective investors or made available on the Platform will be in compliance with state and Federal securities laws, rules and regulations.  StartEngine and its counsel will have the opportunity to review any offering related materials that name StartEngine and the Company agrees that it will make any changes reasonably requested by StartEngine to any materials that mention StartEngine. The Company represents and warrants that, to its knowledge, all Information and the Offering Materials, including, but not limited to, the Company’s financial statements, will b not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading.  StartEngine will not be obligated to verify the accuracy and/or adequacy of such Information supplied or disclosed to potential investors.  If the Offering Materials and/or the Information are required to be amended so as not to be misleading or omit to state such a material fact, and the Offering is still posted on www.startengine.com, the Company shall notify StartEngine immediately in the manner prescribed in Section 11, and any amendment shall be made evident to Investors by the Company.  StartEngine grants the Company a limited, revocable, non-exclusive, non-transferable license to post the Offering Materials on the Platform for the term of the engagement.  StartEngine shall be entitled to rely upon any representations, warranties or covenants made by the Company or any third party disclosed in the Offering Materials to the Company or by the Company to the potential and actual investors and any third party.  The Company agrees to cooperate with all reasonable requests from StartEngine public relations and marketing initiatives for the Platform.   During the Offering and until this Agreement is terminated, Company may have access to information collected by StartEngine as long as the Company does not violate any privacy policies established by StartEngine.

         (b)      Until the date that is two years from the date hereof, StartEngine will keep all information obtained from the Company confidential except: (i) Offering Materials which are provided to StartEngine to be made available on the Platform and the Offering Circular filed with the SEC; (ii) Offering information such as the number of reservations, amount reserved, funding goals, etc. (iii) information which is otherwise publicly available, or previously known to or obtained by, StartEngine independently of the Company and without breach of any of StartEngine’s agreements with the Company; (iv) StartEngine may disclose such information to its officers, directors, employees, agents and representatives, and to its other advisors and financial sources on a need to know basis only and will require that all such persons will keep such information strictly confidential.  No such obligation of confidentiality shall apply to information that: (x) is in the public domain as of the date hereof or hereafter enters the public domain without a breach by StartEngine, (y) was known or became known by StartEngine prior to the Company’s disclosure thereof to StartEngine as evidenced by written records, (z) becomes known to StartEngine from a source other than the Company, and other than by the breach of an obligation of confidentiality owed to the Company; (v) is disclosed by the Company to a third party without restrictions on its disclosure; (vi) is independently developed by StartEngine as evidenced by written records; or (vii) is required to be disclosed by StartEngine or its officers, directors, employees, agents, attorneys and to its other advisors and financial sources, pursuant to any order of a court of competent jurisdiction or other governmental body or as may otherwise be required by law.  

4.Compensation.   For the Platform posting services described in Section 2, the Company agrees to pay $50 per Investor Fee. StartEngine shall be entitled to receive an administration fee of $50 per Investor upon deposit of funds by each Investor into the designated escrow account (“Platform Fees”). Invoices are sent every two weeks, and shall be paid by the Company within 10 days.  In the event any closing is held at a time when any Investor Fee is owing to StartEngine, Company authorizes the escrow agent to reimburse such fees to StartEngine from any funds held in escrow. If a closing is not held at a time when any Investor Fee is owing to StartEngine, Company shall pay StartEngine via ACH deposit. StartEngine will initiate an invitation to pay via ACH through Bill.com. Checks are not accepted.In the event Company cancels the Offering, Platform Fees will still be due to StartEngine on accounts where funds were actually received. In addition, StartEngine shall be entitled to receive warrants to purchase that number of shares determined by dividing (i) the product of (a) the number of individual investors for which StartEngine will receive a Platform Fee times (b) $50 by (ii) 30% of the issue price to the investors (“Warrants”). The form of Warrant is attached as Appendix B to this Agreement.  Platform fees and Warrants are earned upon Investor deposit into the designated escrow account and are due regardless of whether the Company cancels its offering.  Additional fees are set out in Appendix A hereto. 

Company agrees that StartEngine shall design, build and create your campaign page and provide account and marketing consulting services for a fee of $25,000. Payment must be made upfront at the time of signing to commence the services.

Company agrees to purchase StartEngine Secure for a fee of $5 per investor per year or a maximum fee of $10,000 per year for up to 5,000 shareholders, payable by credit card or ACH. See Appendix I for fees for companies with more than 5,000 shareholders.  StartEngine Secure operates as a transfer agent to manage all of your your cap table needs. Secure fees shall be taken from each disbursement. If the Company  does not meet its minimum funding goal, no service shall be provided and thus no payment shall be due for such services.

5.   Term of Engagement.  This Agreement will remain in effect for 12 months from the date of this Agreement.  The parties hereto may terminate this Agreement at any time by written consent.  This Agreement will automatically renew after 12 months.  

6.             Mutual Indemnification.  The Company and StartEngine agree to indemnify and hold each other harmless from and against any and all claims, demands, losses, causes of action, damages, lawsuits, judgments, including attorney’s fees and costs, to the extent caused by or arising out of or relating to the work, errors, omissions and/or operations of the other party.  The Company will indemnify and hold harmless StartEngine, its directors and officers and each person, if any, who controls StartEngine against any losses, claims, damages or liabilities, joint or several, to which StartEngine may become subject, under the Securities  Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement of a material fact or omission of a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading in any of the material provided by the Company to appear on StartEngine’s Platform or filed with the SEC, or any amendment or supplement thereof.  The Company shall reimburse StartEngine for any legal or other expenses reasonably incurred in connection with investigation or defense or loss, claim, damage, liability or action referred to in the previous sentence as such expenses are incurred. The Company will not, however, be responsible for any claims, losses, damages, liabilities, or expenses, which are finally judicially determined to have resulted solely from StartEngine’s gross negligence or intentional misconduct.  The Company shall assume the defense of such action, including the employment and fees of counsel (reasonably satisfactory to StartEngine) and payment of reasonable and accountable expenses.

7.Representations and Warranties.  Each of the Company and StartEngine represents and warrants that (a) it has full right, power and authority to enter into this Agreement and to perform all of its obligations hereunder and (b) this Agreement has been duly authorized and executed and constitutes a legal, valid and binding agreement of such party enforceable in accordance with its terms.   

The Company represents that it has not taken, and it will not take any action, directly or indirectly, so as to cause the Offering to fail to be entitled to rely upon the exemption from registration afforded by Reg A+ and other applicable rules and regulations, including filing any state “blue sky” filings. The Company further agrees that any representations and warranties made by it to any prospective investor in the Offering or placement agent shall be deemed also to be made to StartEngine for its benefit and StartEngine shall be deemed a third party beneficiary to any such agreements.   The Company agrees that it will comply with the SEC’s ongoing reporting requirements under Reg A+.

8.Parties; Assignment; Independent Contractor; Governing Law; No Tax Advice.  This Agreement has been and is made solely for the benefit of the parties hereto and each of their respective persons, agents, employees, officers, directors and controlling persons and their respective heirs, executors, personal representatives, successors and assigns, and nothing contained in this Agreement will confer any rights upon, nor will this Agreement be construed to create any rights in, any person who is not party to such Agreement, other than as set forth in this section.  The rights and obligations of either party under this Agreement may not be assigned without the prior written consent of the other party hereto and any other purported assignment will be null and void.  StartEngine has been retained under this Agreement as an independent contractor, and it is understood and agreed that this Agreement does not create a fiduciary relationship between StartEngine and the Company or their respective officers, directors and controlling persons.  StartEngine shall have no control over any aspect of the Company and StartEngine shall not be considered to be the agent of the Company for any purpose whatsoever and StartEngine is not granted any right or authority to assume or create any obligation or liability, express or implied, on the Company’s behalf, or to bind the Company in any manner whatsoever.  The Company acknowledges that StartEngine does not provide financial, accounting, investment, tax or legal advice. This Agreement shall be construed and interpreted in accordance with the laws of the State of New York. 

9.     Legal and Other Compliance.  The Company at its own expense, will use its best efforts to obtain any registration, qualification or approval required to sell any Securities under the laws (including U.S. state “blue sky” laws relating to broker registration and the making of notice filings) of any applicable jurisdictions (including any applicable foreign jurisdiction or any instrumentality thereof).  Without limiting the generality of the foregoing, the Company represents that it is not subject to any disqualifying event as set forth in Rule 262 under the Securities Act. The Company agrees that it is responsible for compliance with the restrictions on investment amounts set out in Reg A+.  The Company understands and agrees that there are compliance requirements that pertain to the Offering both on the Platform and off the Platform.  The Company further understands and agrees that StartEngine does not purport to make any representation, warranty, or guarantee that any activity by the Company or StartEngine, whether through the Platform or not, is in compliance with applicable state or Federal securities laws or the rules and regulations of any self-regulatory organization.  It is expressly understood that none of the services provided by StartEngine should be deemed legal advice.  StartEngine makes no representation or warranties that offerings of securities on the Platform comply with state or Federal securities laws.  The Company agrees that it shall consult its legal counsel to independently determine whether use of the Platform for the Offering complies with state and Federal laws, rules and regulations.   

10.Exclusivity. 

(a)It is expressly understood that StartEngine will post other company offerings on the Platform and is not required to operate the Platform as its sole and exclusive function.  In addition to operating the Platform, StartEngine and its affiliates may engage in other business activities in the future.  

(b)The Company’s engagement with StartEngine pursuant to this Agreement shall be exclusive for the term of this Agreement and it is expressly understood that the Company may not post the Offering Materials on the company's website or any website, including any other Reg A+ online investment technology platform.  

11.Notices.  Any notices required by this Agreement shall be in writing and shall be addressed, and delivered or mailed postage prepaid, to the other parties hereto at such addresses as such other parties may designate from time to time for the receipt of such notices.  Until further notice, the address of each party to this Agreement for this purpose shall be the following:  

If to StartEngine: 

StartEngine Crowdfunding, Inc.  

750 N. San Vicente Blvd 

Suite 800W

 West Hollywood, CA 90069 

Tel: 310-748-7821 

Attn:  Howard Marks 

If to the Company: 

Apex Farms Corp. 

501 Silverside RD. 

Tel: 3023073668 

Attn: Alex Leo 

12.Disclaimer.   The Company acknowledges and agrees that its use of the Platform provided by StartEngine is done at the Company’s own risk.  To the fullest extent permissible by law, neither StartEngine nor any other party involved in creating, producing, or delivering the Platform shall be liable to the Company or any third-party for any lost profits or lost opportunity, or for any direct, incidental, consequential, special, indirect or punitive damages arising out of the Company’s access to, or use of, the Platform.  In addition, the Company acknowledges that it will be solely accountable for all content on and relating to the Offering on www.startengine.com. Without limiting the foregoing, everything on the Platform is provided to the Company “as is” without warranties or guarantees of any kind, either expressed or implied, including but not limited to, the implied warranties of merchantability, fitness for a particular purpose, or non-infringement.   

13.Validity.  In case any term of this Agreement will be held invalid, illegal or unenforceable, in whole or in part, the validity of any of the other terms of this Agreement will not in any way be affected thereby. 

14.Entire Agreement Counterparts; Amendments.  This Agreement is the final, complete, and exclusive agreement of the parties with respect to the subject matter hereof and supersedes and merges all prior or contemporaneous communications and understandings between the parties.  No modification of or amendment to this Agreement will be effective unless in writing and signed by the party to be charged. This Agreement may be executed in counterparts and each of such counterparts will for all purposes be deemed to be an original, and such counterparts will together constitute one and the same instrument. 

15.Press and Marketing. The Company agrees that StartEngine shall, from and after any closing, have the right to reference the Offering and StartEngine’s role in connection therewith in StartEngine’s marketing materials and on its website and to place advertisements in financial and other newspapers and journals, in each case at its own expense. The Company also acknowledges that StartEngine has the right to utilize the email database of its all users of the Platform for the purposes of marketing and promotion.  StartEngine has the right to publish all campaign statistics. Any advertising conducted by the Company must include the StartEngine logo. StartEngine shall provide appropriate placements and sizes and provide a link to the artwork options.  

The Company acknowledges that they have the responsibility to provide a brief video testimonial to StartEngine within 14 days of the offering live date. Testimonial logistics will be organized by StartEngine.

                                                                    [Signature Page Follows]                        

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered by their duly authorized officers as of the date hereof.

STARTENGINE CROWDFUNDING, INC. 

By: /s/ Allen Jebsen 

Name: Allen Jebsen

Title: VP, Sales

APEX FARMS CORP. 

By: /s/ Alexander M. Woods-Leo

Name: Alexander M. Woods-Leo

Title: CEO

APPENDIX A

·Escrow Setup - $500 (one-time fee) 

·Escrow Account - $35/month account reporting fee (regardless of amount of funds in bank account) 

·Accounting and Transaction Fee - $15/transaction 

·API License - $300/month 

·Funds processing fee - ACH - $1.00, Check $10, Wire $15US/$35/Int’l 

·ACH Exception - $7/transaction 

·Bank Surcharges - May apply for check returns, NSF’s, etc. (Fees vary) 

·Bad Actor Checks (US) - $85 for each offering “covered person” (issuer and each associated person) 

·Bad Actor Checks (International) - $150/individual, $250/entity 

·AML for individuals - $5.00 domestic, $10.00 EU/UK, $120 other int’l (only for investments of $2,000 or more)  

·AML for entities - $5.00 domestic, $75.00 EU/UK, $120 other int’l (only for investments of $2,000 or more)  

·eSign Subscription Agreements - $1/agreement 

·StartEngine Secure  

o$5 per investor, or a maximum fee of:  

§$10,000 per year for up to 5,000 shareholders 

§$15,000 per year for up to 10,000 shareholders 

§$20,000 per year for up to 20,000 shareholders 

§$30,000 per year for 20,000+ shareholders 

·Cryptocurrency investments (BTC, ETH) - $10 per investment 

* BTC & wire investments not accepted until escrow opens, which occurs after Minimum Offering Amount reached. To accept BTC & wire investments from beginning of Offering company can pay optional fee.

All fees are subject to change within 48 hours of written notice. Fees will not change once offering begins. All services can be purchased at https://startengine.squarespace.com/services/

APPENDIX B

WARRANT

NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE 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 OR OTHER LOAN SECURED BY SUCH SECURITIES.

COMMON STOCK PURCHASE WARRANT

[COMPANY] 

Initial Warrant Shares: _____________Initial Exercise Date: _______ __, 20__ 

THIS COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, StartEngine Crowdfunding, Inc. or its assigns (the “Holder”) 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 “Initial Exercise Date”) and on or prior to the close of business on the 5 year anniversary of the Initial Exercise Date (the “Termination Date”) but not thereafter, to subscribe for and purchase from [COMPANY], a ______________ corporation (the “Company”), up to _________ shares (as subject to adjustment hereunder, the “Warrant Shares”) of the Company’s common stock (“Common Stock”); provided, however, the number of Warrant Shares issuable hereunder shall increase by 25% on each 6-month anniversary of the Initial Exercise Date if, prior to such date, a Liquidity Event has not occurred.  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).

Section 1.Definitions.  In addition to the terms defined elsewhere in this Agreement, the following terms have the meanings indicated in this Section 1: 

“Affiliate” 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.

“Board of Directors” means the board of directors of the Company.

“Business Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.

“Commission” means the United States Securities and Exchange Commission.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“Going Public Date” Such first date whereby the Common Stock is registered under Section 12(b) or 12(g) of the Exchange Act or the Common Stock is qualified under Regulation A.

“Liens” means a lien, charge pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.

“Liquidity Event” shall mean any one of the following events has occurred: (a) an initial underwritten public offering of Common Stock by a nationally recognized underwriter pursuant to a registration Statement filed in accordance with the Securities Act and pursuant to which at least, $30,000,000 in gross proceeds is raised for the benefit of the Company and pursuant to which the Holder has the right to include the Warrant Shares for inclusion in such offering or (b) a Fundamental Transaction with a valuation to the Company of at least $50,000,000 pursuant to which the Holder has the right to put this Warrant back to the Company for cash equal to the Black Scholes Value pursuant to Section 3(e).  

“Person” 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.

“Proceeding” 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.

“Rule 144” means Rule 144 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.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

“Trading Day” means a day on which the Common Stock is traded on a Trading Market.

“Trading Market” 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 MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange or the OTC Bulletin Board (or any successors to any of the foregoing).

“Transfer Agent” means _____________________, the current transfer agent of the Company, with a mailing address of ___________________ and a facsimile number of _______________, and any successor transfer agent of the Company.

“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is 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 is then listed or quoted as reported by Bloomberg L.P. (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 OTC Bulletin Board is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the OTC Bulletin Board, (c) if the Common Stock is not then listed or quoted for trading on the OTC Bulletin Board and if prices for the Common Stock are then reported in the “Pink Sheets” published by Pink 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 Holder and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.

Section 2.Exercise. 

a.Exercise of Warrant.  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 (or such other office or agency of the Company as it may designate by notice in writing to the registered Holder at the address of the Holder appearing on the books of the Company) of a duly executed facsimile copy (or e-mail attachment) of the Notice of Exercise form annexed hereto. Within three Trading Days following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the 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 form be required.  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 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 any objection to any Notice of Exercise within three (3) Business Days 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. 

b.Exercise Price.  The exercise price per share of the Common Stock under this Warrant shall be $_____, subject to adjustment hereunder (the “Exercise Price”). 

c.Cashless Exercise.  If at the time of exercise hereof there is no effective registration statement registering for sale or resale the Warrant Shares, 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) = the VWAP on the Trading Day immediately preceding the date on which Holder elects to exercise this Warrant by means of a “cashless exercise,” as set forth in the applicable Notice of Exercise;

(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 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 Warrant Shares shall take on the registered characteristics of the Warrants being exercised, and the holding period of the Warrants being exercised may be tacked on to the holding period of the Warrant Shares.  The Company agrees not to take any position contrary to this Section 2(c).

d.Mechanics of Exercise. 

i.Delivery of Warrant Shares Upon Exercise.  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 (“DWAC”) 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 Holder or (B) this Warrant is being exercised via cashless exercise, and otherwise by physical delivery of a certificate or appropriate notation in the records kept by the Company’s transfer agent, 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 three Trading Days after the delivery to the Company of the Notice of Exercise (such date, the “Warrant Share Delivery Date”).   The Warrant Shares shall be deemed to have been issued, and Holder or any other person so designated to be named therein shall be deemed to have become a holder of record of such shares for all purposes, as of the date the Warrant has been exercised, with payment to the Company of the Exercise Price (or by cashless exercise, if permitted) and all taxes required to be paid by the Holder, if any, pursuant to Section 2(d)(vi) prior to the issuance of such shares, having been paid. 

ii.Delivery of New Warrants Upon Exercise.  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.

iii.Rescission Rights.  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. 

iv.Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise.  Following the Going Public Date, 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, 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 “Buy-In”), 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 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. 

v.No Fractional Shares or Scrip.  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.

vi.Charges, Taxes and Expenses.  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; provided, however, that in the event 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. 

vii.Closing of Books.  The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof. 

e.Holder’s Exercise Limitations.  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 (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below).  For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of shares 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 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.  Except as set forth in the preceding sentence, 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 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 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.   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 shares of Common Stock outstanding.  Upon the written or oral request of a Holder, the Company shall within two Trading Days confirm orally and in writing to the Holder the number of shares 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 since the date as of which such number of outstanding shares of Common Stock was reported.  The “Beneficial Ownership Limitation” 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 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.

Section 3.Certain Adjustments. 

a.Stock Dividends and Splits. 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 shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares or (iv) issues by reclassification of shares of the Common Stock any 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 shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of shares 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 stockholders 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. 

b.Subsequent Equity Sales. If the Company or any Subsidiary thereof, as applicable, at any time while this Warrant is outstanding, shall sell or grant any option to purchase, or sell or grant any right to reprice, or otherwise dispose of or issue (or announce any offer, sale, grant or any option to purchase or other disposition) any Common Stock or Common Stock Equivalents, at an effective price per share less than the Exercise Price then in effect (such lower price, the “Base Share Price” and such issuances collectively, a “Dilutive Issuance”) (it being understood and agreed that if the holder of the Common Stock or Common Stock Equivalents so issued shall at any time, whether by operation of purchase price adjustments, reset provisions, floating conversion, exercise or exchange prices or otherwise, or due to warrants, options or rights per share which are issued in connection with such issuance, be entitled to  

receive shares of Common Stock at an effective price per share that is less than the Exercise Price, such issuance shall be deemed to have occurred for less than the Exercise Price on such date of the Dilutive Issuance at such effective price), then simultaneously with the consummation of each Dilutive Issuance the Exercise Price shall be reduced and only reduced to equal the Base Share Price and the number of Warrant Shares issuable hereunder shall be increased such that the aggregate Exercise Price payable hereunder, after taking into account the decrease in the Exercise Price, shall be equal to the aggregate Exercise Price prior to such adjustment.  Such adjustment shall be made whenever such Common Stock or Common Stock Equivalents are issued.  Notwithstanding the foregoing, no adjustments shall be made, paid or issued under this Section 3(b) in respect of an Exempt Issuance.  The Company shall notify the Holder, in writing, no later than the Trading Day following the issuance or deemed issuance of any Common Stock or Common Stock Equivalents subject to this Section 3(b), indicating therein the applicable issuance price, or applicable reset price, exchange price, conversion price and other pricing terms (such notice, the “Dilutive Issuance Notice”).  For purposes of clarification, whether or not the Company provides a Dilutive Issuance Notice pursuant to this Section 3(b), upon the occurrence of any Dilutive Issuance, the Holder is entitled to receive a number of Warrant Shares based upon the Base Share Price regardless of whether the Holder accurately refers to the Base Share Price in the Notice of Exercise. If the Company enters into a Variable Rate Transaction, despite the prohibition thereon in the Purchase Agreement, the Company shall be deemed to have issued Common Stock or Common Stock Equivalents at the lowest possible conversion or exercise price at which such securities may be converted or exercised.

c.Subsequent Rights Offerings.  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 the record holders of any class of shares of Common Stock (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 shares 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 shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, 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 shares of 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). 

d.Pro Rata Distributions.  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 holders of shares of Common Stock, 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 "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 shares 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 shares of Common Stock are to be determined for the participation in such Distribution (provided, however, 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 shares of 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).

e.Fundamental Transaction. 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, (ii) the Company, 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, (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 is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires more than 50% of the outstanding shares of Common Stock (not including any shares of 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 “Fundamental Transaction”), 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) or Section 2(f)] on the exercise of this Warrant), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) or Section 2(f)] 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, purchase this Warrant from the Holder by paying to the Holder an amount of cash equal to the Black Scholes Value of the remaining unexercised portion of this Warrant on the date of the consummation of such Fundamental Transaction.  “Black Scholes Value” means the value of this Warrant based on the Black and Scholes Option Pricing Model obtained from the “OV” function on Bloomberg, L.P. (“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 Fundamental Transaction and the Termination Date, (B) an expected volatility equal to the greater of 100% and the 100 day volatility  

obtained from the HVT function on Bloomberg as of the Trading Day immediately following the public announcement of the applicable Fundamental Transaction, (C) the underlying price per share used in such calculation shall be the sum of the price per share being offered in cash, if any, plus the value of any non-cash consideration, if any, being offered in such Fundamental Transaction and (D) a remaining option time equal to the time between the date of the public announcement of the applicable Fundamental Transaction and the Termination Date.  The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume 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 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 shares of 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 shares of 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 and the other Transaction Documents 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 and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein.

f.Calculations. 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 shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding. 

g.Notice to Holder.   

i.Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly mail to the Holder 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. 

ii.Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) 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 stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any  

consolidation or merger to which the Company 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 is 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 mailed to the Holder at its last address as it shall appear upon the Warrant Register of the Company, at least 20 calendar 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 mail such notice or any defect therein or in the mailing thereof shall not affect the validity of the corporate action required to be specified in such notice.  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.

Section 4.Transfer of Warrant. 

a.Transferability.  Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof, this Warrant and all rights hereunder (including, without limitation, any registration rights) 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.  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.   

b.New Warrants. 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 Exercise Date and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.

c.Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”), 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. 

d.Transfer Restrictions. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this Warrant shall not be either (i) registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue sky laws or (ii) eligible for resale without volume or manner-of-sale restrictions or current public information requirements pursuant to Rule 144, the Company may require, as a condition of allowing such transfer, that the Holder or transferee of this Warrant, as the case may be, provides to the Company an opinion of counsel, the form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that the transfer of this Warrant does not require registration under the Securities Act. 

e.Representation by the Holder.  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. 

Section 5.Miscellaneous. 

a.No Rights as Stockholder Until Exercise.  This Warrant does not entitle the Holder to any voting rights, dividends or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section 3.   

b.Loss, Theft, Destruction or Mutilation of Warrant. 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. 

c.Saturdays, Sundays, Holidays, etc.  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. 

d.Authorized Shares.   

The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of

any purchase rights under this Warrant.  The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of executing stock certificates to execute and issue the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant.  The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed.  The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).  

Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, 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 of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment.  Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.

Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.

e.Governing Law.  All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed by and construed and enforced in accordance with the internal laws of the State of [______________________], without regard to the principles of conflict of laws thereof.  Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense of this Warrant shall be commenced in the state and federal courts sitting in the City of New York, of Manhattan (the “New York Courts”).  Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York Courts 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 suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such New York Courts, or such New York Courts are improper or inconvenient venue for such proceeding.  Each party hereto hereby irrevocably  

waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Warrant.  If any party shall commence an action or proceeding to enforce any provisions of this Warrant, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorneys’ fees and other costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding.

f.Restrictions.  The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered and the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws. 

g.Nonwaiver and Expenses.  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, notwithstanding the fact that all rights hereunder terminate on the Termination Date.  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. 

a.Notices.  Any and all notices or other communications or deliveries to be provided by the Holders hereunder including, without limitation, any Notice of Exercise, shall be in writing and delivered personally, by facsimile, or sent by a nationally recognized overnight courier service, addressed to the Company, at the address set forth above Attention: _________________, facsimile number _______________, email address _______________, or such other facsimile number, email address or address as the Company may specify for such purposes by notice to the Holders.  Any and all notices or other communications or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by facsimile, or sent by a nationally recognized overnight courier service addressed to each Holder at the facsimile number or address of such Holder appearing on the books of the Company, or if no such facsimile number or address appears on the books of the Company.  Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth in this Section prior to 5:30 p.m. (New York City time) on any date, (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth in this Section on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (iii) the second Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given. 

h.Limitation of Liability.  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 stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company. 

i.Remedies.  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.

j.Successors and Assigns.  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. 

k.Amendment.  This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder. 

l.Severability.  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. 

m.Headings.  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. 

n.Piggyback Registration Rights.  If, at any time after date hereof, the Company shall determine to prepare and file with the Commission a registration statement relating to an offering for its account or the account of others under the Securities Act of any of its equity securities, other than on Form S-4 or Form S-8 (each as promulgated under the Securities Act), or their then equivalents relating to equity securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with the stock option or other employee benefit plans, the Company shall send to the Holder a written notice of such determination and if, within 15 calendar days after the date of such notice, the Holder (or any permitted successor or assign) shall so request in writing, the Company shall include in such registration statement all or any part of the Warrant Shares that such Holder requests to be registered.  Further, in the event that the offering is a firm-commitment underwritten offering, the Company may exclude the Warrant Shares if so requested in writing by the lead underwriter of such offering.  In the case of inclusion in a firm-commitment underwritten offering, the Holders must sell their Warrant Shares on the same terms set by the underwriters for shares of Common Stock to be sold for the account of the Company. 

********************

(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.

[COMPANY]

By:__________________________________________

    Name:

    Title:

NOTICE OF EXERCISE

TO:__________________ 

1.The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any. 

2.Payment shall take the form of (check applicable box): 

[  ] in lawful money of the United States; or

[ ] [if permitted] the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 2(c).

3.Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below: 

_______________________________ 

The Warrant Shares shall be delivered to the following DWAC Account Number:

_______________________________ 

_______________________________ 

_______________________________ 

[SIGNATURE OF HOLDER]

Name of Investing Entity: ________________________________________________________________________

Signature of Authorized Signatory of Investing Entity: _________________________________________________

Name of Authorized Signatory: ___________________________________________________________________

Title of Authorized Signatory: ____________________________________________________________________

Date: ________________________________________________________________________________________

ASSIGNMENT FORM

(To assign the foregoing warrant, execute
this form and supply required information.
Do not use this form to exercise the warrant.)

FOR VALUE RECEIVED, [____] all of or [_______] shares of the foregoing Warrant and all rights evidenced thereby are hereby assigned to

_______________________________________________ whose address is

_______________________________________________________________.

_______________________________________________________________

Dated:  ______________, _______

Holder’s Signature:_____________________________ 

Holder’s Address:_____________________________ 

_____________________________ 

NOTE:  The signature to this Assignment Form must correspond with the name as it appears on the face of the Warrant, without alteration or enlargement or any change whatsoever.  Officers of corporations and those acting in a fiduciary or other representative capacity should file proper evidence of authority to assign the foregoing Warrant.

APPENDIX C

StartEngine Secure Service Agreement

This agreement (“Agreement”) sets forth the terms and conditions by which __________________ (“Issuer”, “you”, “your”) appoints StartEngine Secure LLC (“Service Provider”, “us”, “our”, “we”) as the exclusive provider of software and services relating to the recording of the issuance, transfer and registration of Issuer’s securities issued pursuant to Regulation A under the Securities Act of 1933, and associated holder positions, and for clearing ownership changes and new issuances (the “Services”) of the Issuer’s __________________ securities (the “Securities”). The parties hereby agree to the following Terms and Conditions:

1.STATUS OF SERVICE PROVIDER 

a.Service Provider is a stock transfer agent registered with the Securities and Exchange Commission.  

b.Service Provider will not hold, manage, possess or otherwise handle securities. 

c.Service Provider is not providing escrow services to Issuer. 

d.Service Provider is not providing payment services to Issuer but will provide security holder information to Issuer in order for Issuer to contact such holders and obtain the information necessary to make dividend payments or pay amounts owing under debt securities. Issuer acknowledges that Service Provider does not maintain banking information with respect to investors in Issuer’s securities. 

2.GENERAL APPOINTMENT OF SERVICE PROVIDER 

.Issuer hereby engages Service Provider to provide software and transfer agent services relating to the recording of the issuance, transfer and registration of Issuer’s Securities (as defined in 2(b) below) and associated holders, and to perform such other services related to the Securities as provided herein. You hereby certify that the Issuer has taken such action as shall have been required to appoint Service Provider to provide the Services and that authority has been granted to enter into this Agreement, which will remain valid and in force so long as we provide Services to Issuer. 

a.The term “Securities” as used in this Agreement shall mean the equity and debt and revenue share securities, including any warrants and options, of Issuer issued pursuant to Regulation A under the Securities Act on the StartEngine platform. Issuer affirms, represents and warrants that it has provided to Service Provider  all applicable data concerning its Securities and associated holder positions. 

b.Issuer further represents and warrants that it will not use the Services for any Securities that have not been duly authorized and issued in accordance with its articles of incorporation and bylaws or equivalent instruments. 

3.MANAGEMENT OF RECORDS OF SECURITIES AND HOLDERS 

Records with respect to the Securities and holders of the Securities shall be managed by Service Provider in accordance with the instructions and information provided by Issuer and its authorized Administrators in the Service Provider’s system.

i.a. All investor communications (to holders of record) other than confirmations of ownership and statements of change related thereto, whether by email, SMS text message, phone calls or other means shall be the responsibility of Issuer and/or its Administrators. The parties unconditionally agree that Service Provider will not be responsible for creating, editing or commenting on,  or have any involvement  

with any such investor communication relating to the ownership or transfer of the Securities, and no action, including the provision of communication tools, may be regarded or interpreted as Service Provider having participated in the content of any such communications.

b.Service Provider shall  be the sole person authorized to add, modify or remove Securities from the system.. 

c.Issuer warrants and represents to Service Provider that it will provide complete and accurate information with respect to the Securities, the holders thereof and the restrictions applicable to transfer of the Securities (including the dates that any such restrictions are no longer applicable). 

2.BOOK-ENTRY ONLY, NO DTC SECURITIES 

.Ownership of Issuer’s Securities will be “book-entry” only form, meaning that ownership interests shall be recorded and kept only on the books and records of Issuer. No physical certificates shall be issued, nor received, by Service Provider or any other person. Service Provider’s system permits records with respect to the Securities in book-entry form only. Book-entry form means Service Provider maintains records of shares on an investor’s behalf without issuing physical certificates. Service Provider shall provide the means for Issuer to send out email confirmations of positions and notifications of changes from Issuer upon each event affecting any person’s ownership interest.  

a.The securities covered by this Agreement are not DTC eligible.  

3.AUTHORIZED OFFICERS AND ACCOUNT ADMINISTRATORS 

.Issuer shall have the ability to appoint a single Administrator for its Service Provider account, access to which may be either via our dashboard tools or our Application Programming Interface (“API”). Issuer accepts sole and absolute liability and responsibility for managing its Administrators and for safeguarding passwords, API keys, and other security measures. 

a.Service Provider shall be protected and held harmless when enabling and accepting any actions taken by, or instructions given by an  Administrator. When any Administrator of Issuer shall no longer be vested with the authority to give instructions or provide information with respect to the Securities for Issuer, a written notice thereof shall be given to Service Provider and until receipt of such notice Service Provider shall be fully protected and held harmless in recognizing, enabling and accepting the instructions or communications of such Administrator. 

b.Service Provider shall not be considered notified of any termination of Administrators of Issuer until notice of such termination shall be given in writing by Issuer or its Administrators to Service Provider. Such terminations shall have no effect on any transactions or activities of such person prior to the effectiveness of such termination, including those which have already been entered into our systems and are pending or in process. 

4.DATA ACCESSIBILITY 

.Issuer understands and agrees that inspection of Securities records and other records maintained on the systems of Service Provider may be subject to the inspection rights of securities regulatory authorities including the Securities and Exchange Commission. 

a.Service Provider is hereby authorized to make certain data available to industry third-party systems, both directly and via API integrations, including but not limited to broker-dealers, investment advisers, registered service providers, securities exchanges, rating agencies, research firms and others for purposes of enabling them to obtain information about and descriptions of Issuer’s Securities, payment  

history of such Securities, confirmations of a holder’s ownership positions, enforcing restrictions on any proposed divestitures (including ownership changes), among other things.

5.RESPONSIBILITIES, INDEMNITY, AND COMPENSATION  

.Service Provider may rely and act, or refuse to act, without investigation upon any list, instruction, certification, authorization, or other communication, including electronic communications and actions input into the Service via dashboard or API (“communications”), provided by the Issuer, its agents or representatives. Issuer agrees that it shall not give Service Provider direction to take any action or refrain from taking any action, if implementing such direction would be in violation of applicable law, regulation or any third parties’ contract rights. Service Provider agrees that it shall not transfer any Security if such Security is subject to any restriction or prohibition on transfer, and Service Provider shall not be liable to Issuer or any other party for refusing to effect any such transfer. 

a.Service Provider may conclusively and in good faith rely and act, or refuse to act or provide its services, upon the records and information provided to it by Issuer and/or its Administrators without being required or expected to undertake an independent review or audit of such records and information, and shall have no responsibility or liability for the accuracy or inaccuracy of such records and information. 

b.Service Provider may, in connection with the services described in this Agreement, engage, at Service Provider’s sole expense (unless agreed in writing by Issuer), without notice, subcontractors, agents, co- Service Providers or attorneys-in-fact, and service providers (e.g. hosting datacenter) in its sole and absolute discretion. Service Provider is authorized by Issuer to execute all agreements, appoint agents or sub-agents and do all other acts deemed necessary to carry out the general purposes of, and to fulfill its obligations under this Agreement. 

c.Issuer agrees that Service Provider shall be paid all agreed upon fees for its services and reimbursed for expenses. Issuer shall pay $5 per investor per year, payable by credit card or ACH. Service Provider may increase or decrease (“change”) the fees we charge at any time upon 60 days’ notice. All fees are incurred immediately at time of service usage (or order), not at the time of execution and are not prorated for any partial periods, nor are they refundable in whole or in part, regardless of whether or not the service was completed or cancelled, unless agreed to in writing by Service Provider. Furthermore, Service Provider may add new Services, discontinue any tools or Services, or make modifications to tools or Services at any time and without notice, in its sole and absolute discretion. Issuer shall pay interest at the rate of 1.50% per month for all balances due to Service Provider which remain unpaid for 30 days after the due date thereof. Furthermore, Service Provider may, at its option, cease providing Services to Issuer at any time, in its sole discretion, until past due amounts are paid.

 

6.CONSENT TO USE OF NAME AND LOGO 

Each party may disclose in regulatory filings, marketing materials and in other communications the fact that the parties have entered into this Agreement, however, neither party may disclose the specific terms of this Agreement including the fees agreed by and between the parties without the prior written consent of the other party, unless disclosure of such fee information is already public, is required to be disclosed by SEC rules and regulations, or pursuant to a court order.

9.UNCLAIMED PROPERTY ADMINISTRATION; LOST SECURITY HOLDER SEARCH 

Service Provider will not provide unclaimed property reporting services for unclaimed funds or Securities, which may be deemed abandoned or otherwise subject to applicable unclaimed property law or regulation. Any obligations with respect to unclaimed property are solely the responsibility of Issuer. Service Provider shall have no responsibility to provide services regarding lost holder accounts for Issuer’s Securities.

10.MUTUAL CONFIDENTIALITY OF INFORMATION 

a.As used herein, the “Confidential Information” means all confidential and proprietary information of a party disclosed (“Disclosing Party”) to the other party (“Receiving Party”), whether orally or in writing, that is designated as confidential or that reasonably should be understood to be confidential given the nature of the information and the circumstances of disclosure, including the terms and conditions of this Agreement, data, business and marketing plans, technology and technical information, product designs, API designs, and business processes. Confidential Information shall not include any information that: (i) is or becomes generally known to the public without breach of any obligation owed to Disclosing Party; (ii) was known to Receiving Party prior to its disclosure by Disclosing Party without breach of any obligation owed to the Disclosing Party; (iii) was independently developed by Receiving Party without breach of any obligation owed to Disclosing Party; or (iv) is received from a third party without breach of any obligation owed to Disclosing Party. All intellectual property, work product, software, code, and other proprietary information or work product of both parties to this Agreement is expressly agreed to be Confidential Information. 

b.Receiving Party shall not disclose, use, transmit, or otherwise disseminate, sell or transfer any of the Confidential Information of Disclosing Party for any purpose other than as is set forth in this Agreement, including in Section 8 above, except with Disclosing Party’s prior written permission (with email serving as an appropriate form of written communication). 

c.Each party agrees to effectively protect the confidentiality of the Confidential Information of the other party in the same manner that it protects the confidentiality of its own proprietary and confidential information of like kind, but in no event using less than reasonable care. 

d.If Receiving Party discloses or uses or threatens to disclose or use any of the Confidential Information of Disclosing Party in breach of the terms hereunder, Disclosing Party shall have the right, in addition to any other remedies available in law and equity, to seek injunctive relief to enjoin such act, it being specifically acknowledged by each of the parties to this Agreement that any other available remedies are inadequate. 

11.TERM 

.The Agreement shall have a term of one year, beginning when the offering launches, which term shall automatically renew for successive one-year terms unless either party shall provide written notice of cancellation 30 days prior to the end of any applicable term period. If the Issuer does not launch or does not meet its minimum funding goal, no service shall be provided and thus no payment shall be due to Service Provider. In addition, either party may terminate this Agreement (i) at any time upon 30 days’ notice, (ii) immediately if the other party is in material breach of its obligations hereunder, unless the breaching party has cured such breach, (iii) immediately upon notification or confirmation of any bankruptcy, receivership or dissolution of either party, or, (iv) immediately upon notification or confirmation of any judgment or final order by any law enforcement or regulatory authority against either party or any of their associated persons (officers, directors and substantial beneficial owners). 

a.Upon the effective date of termination in accordance with the provisions noted above Service Provider shall deliver within 90 days, at the expense of Issuer, to Issuer or to a successor Service Provider as directed in writing by Issuer, all records of Issuer in the possession of Service Provider, in a form and format as decided by Service Provider in its sole and absolute discretion.

 

12.WARRANTIES AND DISCLAIMER 

.Mutual Warranties. Each party to this Agreement represents and warrants to the other that it has the right and authority to enter into this Agreement and to perform all of its respective obligations and undertakings. Each party further represents and warrants that: (a) this Agreement has been duly executed and delivered and constitutes a valid and binding agreement enforceable against such party in accordance with its terms; (b) no authorization or approval from any other person is required in connection with such party’s execution, delivery, or performance of this Agreement; and (c) the execution, delivery, and performance of this Agreement does not violate the terms or conditions of any other agreement to which it is a party or by which it is otherwise bound. 

a.Warranties by Issuer: 

i.Issuer hereby represents and warrants that all information, records and materials provided to Service Provider or set forth on Service Provider’s systems are accurate, truthful and comply with all applicable laws, and will not infringe the copyright, trade secret, privacy, publicity, or other rights of any third party. Issuer hereby indemnifies and holds Service Provider harmless for any and all violations or breaches of this Section 12(b). Issuer acknowledges that it is sharing its information, materials and records with Service Provider in order for us to provide the Services and perform under this Agreement. 

ii.Breach of Warranties. In the event of any breach of any of Issuer’s responsibilities or warranties herein, in addition to any other remedies available at law or in equity Service Provider will have the right to immediately, in Service Provider’s sole and reasonable discretion, suspend Services if deemed necessary by Service Provider to prevent or eliminate difficulties in the operation of Services or harm to Service Provider’s business or reputation, or to prevent potential litigation or other controversies. 

b.Disclaimer. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, SERVICE PROVIDER MAKES NO REPRESENTATION OR WARRANTY OF ANY KIND WHETHER EXPRESS, IMPLIED (EITHER IN FACT OR BY OPERATION OF LAW), OR STATUTORILY. SERVICE PROVIDER EXPRESSLY DISCLAIMS ANY AND ALL IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, QUALITY, ACCURACY, TITLE, AND NON-INFRINGEMENT. SERVICE PROVIDER DOES NOT WARRANT AGAINST INTERFERENCE WITH THE USE OF THE SERVICES OR SOFTWARE OR AGAINST INFRINGEMENT. SERVICE PROVIDER DOES NOT WARRANT THAT THE SERVICES OR SOFTWARE ARE ERROR-FREE OR THAT OPERATION OF THE DASHBOARD, THE API OR THE SERVICE WILL BE SECURE OR UNINTERRUPTED. SERVICE PROVIDER EXPRESSLY DISCLAIMS ANY AND ALL LIABILITY ARISING OUT OF THE FLOW OF DATA AND DELAYS ON THE INTERNET. ISSUER WILL NOT HAVE THE RIGHT TO MAKE OR PASS ON ANY REPRESENTATION OR WARRANTY ON BEHALF OF SERVICE PROVIDER TO ANY THIRD PARTY. ISSUER’S ACCESS TO AND USE OF THE SERVICES AND API ARE AT ISSUER’S OWN RISK. ISSUER UNDERSTANDS AND AGREES THAT THE SERVICES ARE PROVIDED TO IT ON AN “AS IS” AND “AS AVAILABLE” BASIS. SERVICE PROVIDER WILL NOT BE LIABLE TO ISSUER FOR ANY DAMAGES RESULTING FROM ISSUER’S RELIANCE ON OR USE OF THE SERVICES. 

13.LIMITATION OF LIABILITY 

.Disclaimer of Consequential Damages. ISSUER HEREBY ACKNOWLEDGES AND AGREES, NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT, SERVICE PROVIDER WILL NOT, UNDER ANY CIRCUMSTANCES, BE LIABLE TO ISSUER FOR CONSEQUENTIAL, INCIDENTAL, SPECIAL, OR EXEMPLARY DAMAGES ARISING OUT OF OR RELATED TO THE TRANSACTION CONTEMPLATED UNDER THIS AGREEMENT, INCLUDING BUT NOT LIMITED TO, LOST PROFITS, LOSS OF BUSINESS OR HOLDER CLAIMS. 

a.Cap on Liability. ISSUER HEREBY ACKNOWLEDGES AND AGREES THAT UNDER NO CIRCUMSTANCES WILL SERVICE PROVIDER’S TOTAL LIABILITY ARISING OUT OF OR RELATED TO THIS AGREEMENT, REGARDLESS OF WHETHER THE ACTION OR CLAIM IS BASED ON CONTRACT, TORT, WARRANTY OR OTHERWISE, WILL EXCEED THE TOTAL AMOUNT OF FEES PAID, IF ANY, BY ISSUER TO SERVICE PROVIDER UNDER THIS AGREEMENT DURING THE 12 MONTH PERIOD PRIOR TO THE OCCURRENCE OF THE EVENT GIVING RISE TO SUCH LIABILITY. 

b.General Indemnification. Issuer hereby agrees to indemnify, protect, defend and hold harmless Service Provider and its officers, directors, members, shareholders, employees, agents, related businesses (including but not limited to StartEngine Crowdfunding, Inc., its affiliates and subsidiaries), partners, vendors, successors and assigns from and against any and all third party claims, demands, obligations, losses, liabilities, damages, recoveries and deficiencies (including interest, penalties and reasonable attorneys’ fees, costs and expenses), which Service Provider may suffer as a result of: (a) any breach of or material inaccuracy in the representations and warranties, or breach, non-fulfillment or default in the performance of any of the conditions, covenants and agreements, of Issuer contained in this Agreement; or error or misstatement of any information, directions or actions delivered by Issuer or its agents pursuant to any of the provisions of this Agreement, or (b) any obligation which is expressly the responsibility of Issuer under this Agreement, or (c) any other cost, claim or liability arising out of or relating to operation or use of the license granted hereunder. Furthermore, Issuer shall protect, hold harmless and indemnify Service Provider and its officers, directors, members, shareholders, employees, agents, partners, vendors, successors and assigns from and against any and all liability related to Issuer’s business and business related operations and affairs, and use of the API, license, the Services API or any breach of the terms of this Agreement. Service Provider hereby agrees to indemnify, protect, defend and hold harmless Issuer and its officers, directors, members, shareholders, employees, agents, related businesses, partners, vendors, successors and assigns from and against any and all third party claims, demands, obligations, losses, liabilities, damages, recoveries and deficiencies (including interest, penalties and reasonable attorneys’ fees, costs and expenses), which Issuer may suffer as a result of any breach of or material inaccuracy in the representations and warranties, or breach, non-fulfillment or default in the performance of any of the conditions, covenants and agreements, of Service Provider contained in this Agreement; or error or misstatement of any information, directions or actions delivered by Service Provider or its agents pursuant to any of the provisions of this Agreement,. Any amount due under the aforesaid indemnity will be due and payable by Service Provider within thirty (30) days after demand thereof. Any amount due under the aforesaid indemnity will be due and payable by the applicable party within thirty (30) days after demand thereof. 

14.MISCELLANEOUS 

a.Notices. All notices permitted or required by this Agreement will be via email, and will be deemed to have been delivered and received upon sending via any nationally recognized and trusted  

SMTP delivery service. Notices shall be delivered to the addresses of record which, if to Service Provider, shall be to [CONTACT DETAILS], and if to Issuer shall be to the email address on file in your account.

b.No Implied License. Except as expressly provided in this Agreement, this Agreement is not intended and will not be construed to confer upon either party any license rights to any patent, trademark, copyright, or other intellectual property rights of either party hereto or any other rights of any kind not specifically conferred in this Agreement. All right, title, and interest in the technology used and the services provided are and remain the exclusive property of Service Provider. 

c.Severability. If any portion or provision of this Agreement is for any reason found to be ineffective, unenforceable, or illegal by any arbitrator or court having jurisdiction, such condition will not affect the validity or enforceability of any of the remaining portions or provisions hereof. 

d.No Legal Partnership or Agency. This Agreement is not intended and shall not be construed as creating a joint venture or a legal partnership between the Issuer and Service Provider, and shall not be interpreted as permitting either party to act as an agent for the other party to this Agreement. or creating a fiduciary relationship or duty or any other obligations other than those expressly imposed by this Agreement. 

e.No Underwriting. Issuer agrees without reservation that Service Provider is not acting as an underwriter of any Securities offering, nor as a broker or dealer on any Securities transaction. Furthermore, Issuer agrees that it is not authorized to nor is it acting as an agent of Service Provider concerning any Securities offering. 

f.No Legal, Tax or Accounting Advice. Issuer agrees without reservation that Service Provider does not provide any legal, tax or accounting advice in any way, nor on any matter, regardless of the communication, and whether is it oral or written. Issuer unconditionally agrees to rely solely on its legal, tax and accounting professionals for any such advice and on all matters. 

g.No Investment Advice or Recommendations. Issuer agrees that Service Provider does not provide any investment advice, nor does Service Provider make any Securities recommendations nor solicit the offer or sale of Securities to any issuer or investor. Service Provider does not provide any brokerage or other service or advice in the structuring of any offering. Issuer agrees that any communications from Service Provider, whether written, oral or otherwise, regardless of content, will never be interpreted or relied upon as investment advice or a securities recommendation. Issuer agrees that it will only rely on the advice of its attorneys, accountants and other professional advisors, including any registered broker-dealers acting as an underwriter for a securities offering. 

h.Electronic Signature and Communications Notice and Consent. Both Issuer and Service Provider hereby consents and agrees that electronically signing this Agreement constitutes each party’s signature, acceptance and agreement as if actually signed by that party in writing. Further, each party agrees that no certification authority or other third party verification is necessary to validate any electronic signature; and that the lack of such certification or third party verification will not in any way affect the enforceability of your signature or resulting contract between Issuer and Service Provider. Each party understands and agrees that their e-signature executed in conjunction with the electronic submission of this Agreement shall be legally binding. Each party agrees that their electronic signature is the legal equivalent of their manual signature on this Agreement and consents to be legally bound by the Agreement’s terms and conditions. Furthermore, both Issuer and Service Provider hereby agree that all current and future notices, confirmations and other communications regarding this Agreement specifically, and future communications in general between the parties, may be made by email, sent to the email address of record as set forth in the Notices section above or as otherwise from time to time  

changed or updated and disclosed to the other party, without necessity of confirmation of receipt, delivery or reading, and such form of electronic communication is sufficient for all matters regarding the relationship between the parties. If any such electronically-sent communication fails to be received for any reason, including but not limited to such communications being diverted to the recipients’ spam filters by the recipients email service provider, or due to a recipient’s change of address, or due to technology issues by the recipient’s service provider, the parties agree that the burden of such failure to receive is on the recipient and not the sender, and that the sender is under no obligation to resend communications via any other means, including but not limited to postal service or overnight courier, and that such communications shall for all purposes, including legal and regulatory, be deemed to have been delivered and received. No physical, paper documents will be sent to Issuer, and if you desire physical documents then you agree to directly and personally print, at your own expense, the electronically-sent communication(s) and maintaining such physical records in any manner or form that you desire

i.Assignment. No party may transfer or assign its rights and obligations under this Agreement without the prior written consent of the other parties. Notwithstanding the foregoing, without the consent of the other parties, any party may transfer or assign its rights and obligations hereunder in whole or in part (a) pursuant to any merger or consolidation, and, (b) to the successors and assigns of all or substantially all of the assets of such assigning party, provided such entity shall be bound by the terms hereof. This Agreement will be binding upon and will inure to the benefit of successors and assigns. 

j.Binding Arbitration, Applicable Law and Venue, Attorneys’ Fees. This Agreement is governed by, and will be interpreted and enforced in accordance with the laws of the State of California without regard to principles of the conflict of laws. The parties hereby agree that any claim or dispute arising under this Agreement may only be brought in arbitration, with venue in Los Angeles, California. It is further agreed that any such action will be pursuant to the rules of the American Arbitration Association. Issuer and Service Provider each consent to this method of dispute resolution, as well as jurisdiction, and consent to Los Angeles being a convenient forum for any such claim or dispute and each party waives any right it may have to object to either the venue or jurisdiction for such claim or dispute. In the event of any dispute among the parties, the prevailing party shall be entitled to recover damages plus reasonable costs and attorney’s fees and the decision of the arbitrator shall be final, binding and enforceable in any court. 

k.Counterparts; Facsimile; Email; Signatures. This Agreement may be executed in counterparts, each of which will be deemed an original and all of which, taken together, will constitute one and the same instrument, binding on each signatory thereto. This Agreement may be executed by signatures, electronically or otherwise, delivered by email, and a copy hereof that is properly executed and delivered by a party will be binding upon that party to the same extent as an original executed version hereof. 

l.Force Majeure. No party will be liable for any default or delay in performance of any of its obligations under this Agreement if such default or delay is caused, directly or indirectly, by fire, flood, earthquake or other acts of God; labor disputes, strikes or lockouts; wars, rebellions or revolutions; riots or civil disorder; accidents or unavoidable casualties; interruptions in transportation or communications facilities or delays in transit or communication; supply shortages or the failure of any person to perform any commitment to such party related to this Agreement; or any other cause, whether similar or dissimilar to those expressly enumerated in this Section 15(n), beyond such party’s reasonable control. 

m.Interpretation. Each party to this Agreement has been represented by counsel and/or has had sufficient time to carefully review each of the terms and provisions of this Agreement and voluntarily accepted each term and provision and executed this Agreement. All pronouns and any variation thereof will be deemed to refer to the masculine and feminine, and to the singular or plural as the identity of the  

person or persons may require for proper interpretation of this Agreement. And it is the express will of all parties that this Agreement is written in English and uses the font styles and sizes contained herein.

n.Captions. The section headings in this Agreement are intended solely for convenience of reference and shall be given no effect in the construction or interpretation of this Agreement. 

o.Beneficiaries. The parties agree that there are no third party beneficiaries to this Agreement. 

p.Entire Agreement; Amendments. This Agreement sets forth the entire agreement between the parties concerning the Service Provider services provided, and supersedes all prior or contemporaneous communications, representations or agreements between the parties, whether oral or written, regarding the subject matter of this Agreement. This agreement may not be modified or amended except by written agreement executed by all the parties of this Agreement. 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered by their duly authorized officers as of the date hereof.

StartEngine Secure LLC 

By: _______________________________ 

Name:

Title:

Company

By: ______________________________________

Name:  

Title:

EXHIBIT  I

StartEngine Secure Services and Fees

·The fees for StartEngine Secure are listed below. Additional transaction fees are detailed below. Secure fees will be taken out of each disbursement. Secure shall renew on the date the company launched their campaign on StartEngine. 

o$5 per investor, or a maximum fee of:  

§$10,000 per year for up to 5,000 shareholders 

§$15,000 per year for up to 10,000 shareholders 

§$20,000 per year for up to 20,000 shareholders 

§$30,000 per year for 20,000+ shareholders  

·Campaign page message board is active during the subscription 

·Invest services to respond to chat or email from investors and refer unanswered questions to Issuer. 

·Unlimited shareholder updates with the new editor (video and graphics) 

·Permanent record of all communications 

·Transfer recording services charged to issuer: 

·Add new investor (no fee) 

·Full or partial ownership transfer additional - $2 per recording 

·Change of address with email confirmation - $2 per recording 

·Stock splits recording and email confirmation - $2 per shareholder 

·Convertible note conversion into shares recording and email confirmation - $2 per shareholder 

APPENDIX D

This StartEngine Service Level Agreement (“SLA” or “Agreement”) sets forth our policies and guarantees for the Platform. Please review this SLA together with our Terms of Use and Privacy Policy, as found via links at the bottom of our website, which also provide for certain rights and obligations relating to your use of the Platform. Unless otherwise expressly provided below, this SLA is subject at all times to the Terms of Use then in-effect.

StartEngine reserves the right to change the terms of this SLA at any time with written notice.

Service Commitment

StartEngine will use commercially reasonable efforts to make the Platform available with an Annual Uptime Percentage of at least 99.00%, excluding planned service maintenance. In the event that StartEngine does not meet this SLA uptime commitment during the Company campaign, Company will be eligible to receive a Service Credit as follows:

Annual Uptime Percentage & Data Integrity Service Credit

The maximum cumulative credit for any and all applicable Service Credits in a month is 100% of the total fees actually paid by Company to StartEngine  in any month so affected.

ThresholdUptime 

95.1% to 99.99%10% 

90.1% to 95%25% 

Below 90%100% 

Definitions

“Annual Uptime Percentage” is calculated by subtracting from 100% the percentage of 5-minute periods during a Service Year in which StartEngine’s Platform was Unavailable to you. If you have been using our Platform for less than a full 365 days, your Service Year for purposes of submitting a Claim and determining a Service Credit will be deemed to be the preceding 365 days, but any such days prior to your actual use of the service will be deemed to have had 100% Availability. Any Unavailability occurring during your period of use, but prior to submitting a Claim cannot be used as a basis for future submitted Claims. Annual Uptime Percentage measurements exclude Unavailability resulting directly or indirectly from any SLA Exclusion.

“Availability” means the ability to login and perform operations by means of the Platform.

“Claim” means a claim for a Service Credit you submit by opening a support case with StartEngine, on the basis that the Platform has been Unavailable to you during a service period.

“Licensee” refers to the person or entity who is using and paying for services on the Platform.

“Incident” means any set of circumstances resulting in the Unavailability of or data loss in the Platform at any time, consistent with the Service Level commitments under this Agreement. An Incident, for purposes of submitting and determining the validity of a Claim, shall not be based on any SLA Exclusions.

“Service Credit” is a dollar credit, calculated as set forth below and in the table above that we may credit back to you upon your submission of a validated and accepted SLA Claim.

“Service Level” means the amount of time expressed as a percentage during which the Platform is available and accessible to users.

“Service Year” is the 365 day period preceding the date of an SLA claim.

“SLA Exclusion” means an instance or reason for which the Service Level Commitment hereunder does not apply and the associated inability to login and perform operations by means of the Platform does not constitute Unavailability or Data Loss for purposes of a Service Credit.

“Unavailable” or “Unavailability” means each full increment of 5 minutes during your use of the Platform where your access to the Platform has no functionality.

APPENDIX E

Payment Terms

Company appoints StartEngine and StartEngine’s payment processor and acquiring bank (the “Processor”) as its agent for the purpose of receiving payments from its investors (as defined in the Agreement), (each such payment being a “Transaction” and the related funds being “Funds”). Company agrees that as of when StartEngine’s designated payment processor or acquiring bank, are first in possession of Funds, such Funds shall be deemed to have been received by Company or its designated escrow company (the “Escrow Agent”). In the event that, for whatever reason, StartEngine or Processor fails to settle Funds to Company or Escrow Agent, Company shall: (i) shall not seek to collect the Funds from investors a second time; and (ii) shall issue to investors such equity or other consideration as it has promised in exchange for the Funds. Each Transaction shall be, as a matter of law, a two-party payment transaction between the investor as payor and the Company as payee, acting through its agent, StartEngine.

Company shall require investors to make Transaction payments in such method as StartEngine shall require.  The methods that StartEngine may require include, without limitation, credit or debit card, ACH or wire transfer.  ACH and wire Transactions shall be payable to the Escrow Agent or StartEngine, as indicated by StartEngine on the ACH or wire instructions provided by StartEngine to investors and Company though the StartEngine site.

As agent for StartEngine in receipt of Transaction Funds, StartEngine shall follow Company’s instructions with respect to settlement of Funds and StartEngine has the right to issue receipts to investors for Transactions Funds in the name of the Company (each a “Receipt”).  Company shall honor Receipts.  Each investor is a third party beneficiary under this Addendum and entitled to enforce StartEngine’s rights hereunder.

Company represents that it is party to an escrow agreement with the Escrow Agent identified in the Agreement and that such Escrow Agent is acting for and on behalf of the Company in its receipt of Transaction Funds.

Company acknowledges that StartEngine is not a bank or money transmitter. In the event of a bankruptcy or insolvency of StartEngine or its payment processor or acquiring bank, Funds may be at risk of loss. Company will not necessarily benefit from FDIC insurance in respect of Funds that are not yet in its possession.

Company, to its knowledge, shall not permit any Transaction to occur involving any: (i) person or entity who to its knowledge appears on the U.S. Department of the Treasury, Office of Foreign Assets Control (OFAC), Specially Designated Nationals List (SDN); (ii) person or entity who is less than 18 years of age; or (iii) person or entity that is making a Transaction for any purpose other than an investment in Company pursuant to a valid Subscription Agreement.  Company states that each Transaction that occurs shall constitute payment for an issuance of equity by Company and shall not be for any other purpose or on behalf of any third party.

Company shall not be liable for the failure of any Transaction on account of the card being ineffective and Company shall never be liable to settle any Transaction Funds to Company or Escrow Agent that Processor has not itself received. Company acknowledges and agrees that StartEngine shall be under no obligation to challenge any chargebacks under the Processing Agreement, either on behalf of Company or StartEngine.

Company agrees to the fees as set out in Appendix A hereto.  StartEngine reserves the right to cause Processor to offset all fees and other amounts owing to StartEngine or Processor from Transaction settlements that would otherwise be payable to Company.

In the event that a chargeback occurs with respect to any Transaction, and the related investor’s holding of securities is cancelled, Company shall provide the necessary information to the transfer agent, or through StartEngine Secure, as the case may be, to reflect the cancellation of such holding. Chargebacks can occur up to 6 months after the date of the original transaction. Company agrees that the Escrow Agent shall hold back 6% of all funds to account for the probability of chargebacks for 6 months (an increase of 120 days from the 60 day ACH hold) from the close of the campaign. In the event that StartEngine or Processor become liable for any chargebacks, fraud, fines or other amounts on account of Transactions: (i) Company shall void the investor subscription in question; and (ii) Company shall deliver the amounts thereof to StartEngine on demand and Company authorizes StartEngine to retrieve such amounts from the Escrow Agent.

Company acknowledges that, as agent for the Company, StartEngine shall allow investors the option of investing up to $2,000 via credit card per investment. This amount is dependent on the individual’s investment limits as outlined in the Regulation Crowdfunding and Regulation A rules.

Company acknowledges that no refunds will be needed or required, except in the case of chargebacks, because Transactions are not processed until the company disburses. Refunds are not offered after the campaign has closed, except in the case of chargebacks, and investors cannot cancel their investment in the 48 hours prior to the end of the offering.

Company desires to effect settlement of credits and debits from the Company Deposit Account (which account is identified by uploading a scan of a blank Company check or by such other means as StartEngine may require) by means of ACH and/or wire transfer in conjunction with the Agreement.  In accordance with this desire, Company authorizes StartEngine and/or its affiliates to initiate debit and credit entries to the Company Deposit Account.  Company agrees to maintain sufficient funds in Company Deposit Account to cover debit transactions.  By signing this authorization, Company states that it has authority to agree to such transactions and that the Company Deposit Account indicated is a valid and legitimate account for the handling of these transactions.  This authority is to remain in effect until StartEngine receives written notice from Company revoking it.  This authorization is for the payment of payment processing fees, chargeback amounts, or any other sums owed to StartEngine or StartEngine’s affiliates.  Company also certifies that the appropriate authorizations are in place to allow Company to authorize this method of settlement.  All changes to the identification of the Company Deposit Account under this authorization must be made in writing in accordance with the Agreement.  Company understands that if the information supplied as to the ABA Routing Number and Account Number of the Company Deposit Account is incorrect, and funds are incorrectly deposited, StartEngine will attempt to assist Company in the recovery of such funds but has no liability as to restitution of the same.  StartEngine’s assistance in recovering the funds, where available, will be billed to Company at StartEngine’s current hourly rate for such work.  Company acknowledges that the origination of ACH transactions to the Company Deposit Account must comply with the provisions of U.S. law.

EX1A-8 ESCW AGMT

 

 

 

 

 

 

 

 

EX1A-9 ACCT LTR

 

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the inclusion in this Offering Statement on Form 1-A, as it may be amended, of our report dated January 28, 2019, of Apex Farms Corp. relating to the audit of the financial statements for the years and period ended September 30, 2018 and 2017, respectively, and the reference to our firm under the caption “Experts” in the Offering Statement.

/s/ M&K CPAS, PLLC 

www.mkacpas.com

Houston, Texas

May 15, 2019