S-1/A

As filed with the Securities and Exchange Commission on March 16, 2022

Registration No. 333- 259924 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

AMENDMENT NO. 13

to

Form S-1

REGISTRATION STATEMENT

Under

The Securities Act of 1933

Novusterra Inc.

(Exact name of registrant as specified in its charter)

Florida	3990	85-3129871
(State or other jurisdiction of	(Primary Standard Industrial	(IRS Employer
incorporation or organization)	Classification Code Number)	Identification No.)

561 NE 79th Street, Suite 325

Miami, FL 33138

(786) 473-6233

(Address, including zip code, and telephone number,

including area code, of registrant’s principal executive offices)

I. Andrew Weeraratne

Chief Executive Officer

561 NE 79th Street, Suite 325

Miami, FL 33138

(786) 473-6233

(Name, address, including zip code, and telephone number,

including area code, of agent for service)

Please send copies of all communications to:

Clifford J. Hunt Esq. Law Office of Clifford J. Hunt, P.A. 8200 Seminole Boulevard Seminole, Florida 33772 (727) 471-0444 M. Ali Panjwani, Esq. Pryor Cashman LLP 7 Times Square New York, New York 10036 (212) 421-4100

As soon as practicable after this registration statement becomes effective

(Approximate date of commencement of proposed sale to the public)

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

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

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

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Securities Exchange Act of 1934.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☒
Emerging Growth Company	☒

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

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.

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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND WE ARE NOT SOLICITING OFFERS TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.

SUBJECT TO COMPLETION, DATED __________, 2022

PROSPECTUS

Units Consisting of 3,333,333 Shares of Common Stock and Warrants to purchase up to 6,666,66 6 Shares of Common Stock

Novusterra Inc. 

This is a firm commitment initial offering of 3,333,333 units (the “Units”) of Novusterra Inc. (the “Company,” “we,” “us” or “our”), each Unit consisting of one share of common stock, no par value and an accompanying a warrant to purchase two shares of our common stock. Each warrant will have an exercise price of $5.7875 per share (equal to 125% of the offering price per Unit based on an assumed public offering price of $4.63 per Unit, which is the midpoint of the range set forth herein), will be exercisable upon issuance and will expire five years from issuance. It is currently estimated that the combined initial public offering price per Unit will be between $4.13 and $5.13. An assumed initial public offering price of $4.63 (which is the midpoint of the range set forth herein) is used throughout this prospectus. The Units will have no stand-alone rights and will not be issued or certificated as stand-alone securities. Purchasers will receive only shares of common stock and warrants. The shares of common stock and warrants may be transferred separately, immediately upon issuance. The offering also includes the shares of common stock issuable from time to time upon exercise of the warrants. All proceeds received by us from the sale of the shares of Common Stock and accompanying warrants offered hereby will be deposited into our corporate account and will immediately be available for our use (See “Use of Proceeds”).

Prior to this offering, there has been no public market for our common stock or warrants. We have applied to list our common stock and warrants on The Nasdaq Capital Market (the “Exchange”) under the symbol “NOVS” and “NOVSW," respectively, subject to our raising a minimum of $15,000,000 in this offering to meet the Exchange’s requirement that we have unrestricted publicly held shares of common stock following the closing worth at least $15,000,000. Accordingly, while the estimates set forth above represent our bona fide estimate of the range of public offering price per share and number of shares to be issued, consistent with the requirements of the Securities and Exchange Commission and the Exchange, we may ultimately issue more shares at a lower price or fewer shares at a greater price to achieve such minimum value of unrestricted publicly held shares. There is no assurance that our listing application will be approved by the Exchange. If our common stock and warrants are not listed on the Exchange, we will not consummate this offering. On April 15, 2021, our Board of Directors, and on April 16, 2021, stockholders holding a majority of our outstanding voting shares, authorized a reverse stock split of the outstanding shares of our common stock in a range of up to one-for-three (1:3), which became effective as of April 16, 2021. All share numbers in this prospectus have thus been adjusted to give effect to such reverse stock split.

Investing in our Common Stock involves a high degree of risk. See “Risk Factors” beginning on page 4 of this prospectus. Neither the U.S. Securities and Exchange Commission (the “SEC”) nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), and will be subject to reduced public company reporting requirements. This prospectus complies with the requirements that apply to an issuer that is an emerging growth company. See “Summary—Implications of Being an Emerging Growth Company.”

	Per Unit	Total
Public offering price	$	$
Underwriting discounts and commissions (1)	$	$
Proceeds to us, before expenses	$	$

(1) Does not include a non-accountable expense allowance equal to 1.0% of the gross proceeds of this offering payable to EF Hutton, the representative of the underwriters. We have also agreed to issue warrants to the representative of the underwriters. See “Underwriting” for additional information regarding underwriter compensation.

We have granted the underwriters the option for a period of 45 days to purchase up to an additional 500,000 shares of our common stock and/or additional warrants in any combination thereof, at the initial public offering price less the underwriting discounts and commissions, solely to cover over-allotments, if any.

The underwriter expects to deliver the shares of common stock and warrants against payment on or about , 2022.

Sole Book-Running Manager

EF HUTTON

division of Benchmark Investments, LLC

The date of this prospectus is __________, 2022

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TABLE OF CONTENTS

	Page No.
ABOUT THIS PROSPECTUS	1
OTHER INFORMATION	1
PROSPECTUS SUMMARY	1
SUMMARY OF THE OFFERING	3
SUMMARY FINANCIAL INFORMATION	4
RISK FACTORS	5
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION	12
USE OF PROCEEDS	12
DILUTION	13
CAPITALIZATION	14
UNDERWRITING	15
DESCRIPTION OF SECURITIES TO BE REGISTERED	20
INFORMATION WITH RESPECT TO THE REGISTRANT	22
DESCRIPTION OF BUSINESS	22
DESCRIPTION OF PROPERTY	30
LEGAL PROCEEDINGS	30
WHERE COMMON STOCK IS BEING OFFERED AND MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS	30
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL STATEMENTS AND RESULTS OF OPERATIONS	31
DIRECTORS AND EXECUTIVE OFFICERS	33
EXECUTIVE COMPENSATION	35
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT	37
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS	38
LEGAL MATTERS	38
EXPERTS	38
WHERE YOU CAN FIND ADDITIONAL INFORMATION	39
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES	39
FINANCIAL STATEMENTS	F-1
PART II—INFORMATION NOT REQUIRED IN PROSPECTUS	II-1
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION	II-1
INDEMNIFICATION OF DIRECTORS AND OFFICERS	II-2
RECENT SALES OF UNREGISTERED SECURITIES	II-2
EXHIBITS	II-3
UNDERTAKINGS	II-4

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ABOUT THIS PROSPECTUS

You should only rely on the information contained in this document or to which we have referred you. We have not authorized anyone to provide you with information otherwise. If anyone provides you with different or inconsistent information, you should not rely on it. We are not making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted.

On April 15, 2021, our Board of Directors, and on April 16, 2021, stockholders holding a majority of our outstanding voting shares, authorized a reverse stock split of the outstanding shares of our common stock in a range of up to one-for-three (1:3), which became effective as of April 16, 2021. All share numbers in this prospectus have thus been adjusted to give effect to such reverse stock split, except for the financial statements and notes thereto.

OTHER INFORMATION

We maintain our web site at www.novusterrainc.com. Information on such web site is not considered a part of this prospectus. Unless specifically set forth to the contrary, when used in this prospectus the terms “Novusterra”, “we”, “us”, “our” and similar terms refer to Novusterra Inc., a Florida corporation.

PROSPECTUS SUMMARY

Basis of Presentation

Certain monetary amounts, percentages and other figures included in this prospectus have been subject to rounding adjustments. Accordingly, figures shown as totals in certain tables or charts may not be the arithmetic aggregation of the figures that precede them, and figures expressed as percentages in the text may not total 100% or, as applicable, when aggregated may not be the arithmetic aggregation of the percentages that precede them.

Market, Industry and Other Data

This prospectus includes estimates regarding market and industry data and forecasts, which are based on publicly available information, industry publications and surveys, reports from government agencies and our own estimates based on our management’s knowledge of, and experience in, the industry and markets in which we compete.

In presenting this information, we have made certain assumptions that we believe to be reasonable based on such data and other similar sources, and on our knowledge of, and our experience to date in, the markets for our products. Market data is subject to change and may be limited by the availability of raw data, the voluntary nature of the data gathering process and other limitations inherent in any statistical survey of market data. In addition, customer preferences are subject to change. Accordingly, you are cautioned not to place undue reliance on such market data. References herein to our being a leader in a market or product category refer to our belief that we have a leading market share position in such specified market based on sales dollars, unless the context otherwise requires.

About Us

The Company, sometimes referred to herein as "we," "us,” “our," and the "Company" and/or "Novusterra Inc.” was incorporated on September 21, 2020, in the State of Florida. Our fiscal year-end date is December 31. Our address is 561 NE 79th Street Suite 325, Miami FL 33138 our telephone number to 786-473-6233 and our website is www.novusterrainc.com. However, you should not consider any information on, or that can be accessed through, our website a part of this Registration Statement.

We began with the objective to build a Rare Earth Elements (“REE”) Processing Facility to process REE for commercial use. However, as approved by a Board of Directors meeting held on March 19, 2021, we changed our objective to developing Graphene since we discovered research illustrating that Graphene, similar to an REE, is a versatile commodity that could be helpful in solving major global problems with the potential for attractive earnings.

Our decision to begin the process of producing Graphene was made easier due to the relationship the Company’s management team has with American Resources Corporation (NASDAQ: AREC) (“ARC”) as a result of prior business activities. ARC through its wholly owned subsidiary, Advanced Carbon Material LLC (“ACM”), signed an exclusive license agreement with Ohio University (the “License Agreement”) to manufacture Graphene using carbon as a raw material using patented technology owned by Ohio University. The suite of patents was originally developed by Dr. Gerardine Botte, the current Whitacre Department Chair in Chemical Engineering at Texas Tech University, an independent board member of ARC and Chief Technical Officer of ACM. Dr. Botte developed and patented these technologies when she served as Ohio University's Distinguished Professor and Russ Professor of Chemical and Biomolecular Engineering.

On March 31, 2021, we entered into a Graphene Development Agreement with ARC that provides us with a nonexclusive sublicense from ARC (the “Sublicense”) of certain patents ARC currently has licensed from Ohio University pursuant to the License Agreement relating to the manufacture of Graphene using coal byproducts. Pursuant to such agreement, we agreed to raise funds via an initial public offering in order to build a manufacturing facility to produce and market Graphene commercially. The agreement also provides that the Company and ARC are each entitled to receive fifty percent (50%) of the operating profits from our Graphene manufacturing and marketing business. This profit sharing arrangement is limited to only the operating profits from the Graphene factory using the rights provided by the Sublicense and will not apply to any other activities in which the Company may engage in the future, including the production of Graphene using any other technology. Hence, the Company has been researching alternative methods to produce Graphene. The Company also plans to look into acquiring companies that use or can use Graphene as raw material for other applications. As part of the above two agreements, Andrew Weeraratne was replaced by Mark Jensen, the Chief Executive Officer and the Chairman of the Board of ARC, as the Chairman of the Company’s Board of Directors.

1

As approved at a special shareholders meeting attended by major shareholders on March 19, 2021, we signed an agreement with ARC on March 31, 2021, to issue ARC 10,000,000 shares of Class B common stock (with 10 votes each) plus 5,700,000 shares of Class A common stock (with one vote each) of the Company, comprising 51.14% of total shares giving 87.57% of voting power to ARC, who plans to distribute such shares to ARC’s shareholders as stock dividends after the completion of this offering. At a special shareholders meeting held on April 4, 2021, attended by majority of shareholders, including ARC, the Company voted to eliminate the Class B shares and increase the Class A shares by the number of Class B shares then outstanding, and designate the Class A shares as “Common Shares.” Further, at a special stockholders meeting held on April 16, 2021, attended by a majority of shareholders, the Company voted to effectuate a one-for-three (1:3) reverse stock split, which became effective as of April 16, 2021. As a consequence of eliminating the Class B shares on April 4, 2021, as of March 16, 2022, ARC holds 5,233,333 Class A common shares, or 49.92% of the Company’s voting stock, and Andrew Weeraratne holds 4,173,150 common shares, or 39.81% of the Company’s voting stock, based on 10,482,424 common shares outstanding.

In order to manufacture and market Graphene using the technology we have sublicensed from ARC, we have signed a lease agreement with ARC to lease land and a building ARC owns in Kentucky to build our Graphene manufacturing factory, with such lease payments to be paid after we have received the proceeds from this offering. Once we have received the proceeds from this offering, we plan to hire experts in the Graphene industry to help us select, purchase and install the necessary equipment needed to begin the process of making Graphene from carbon.

Graphene has been unknowingly produced in small quantities for centuries, through the use of pencils and other similar applications of graphite. However, only in the recent years have the valuable qualities of Graphene has been discovered. In 1947, Canadian physicist Philip Wallace wrote a pioneering paper about the electronic behavior of graphite that sparked considerable interest in the field.1 Further, in 1960, Nobel Prize winning chemist Linus Pauling speculated about how flat, single layers of Carbon atoms would behave. In 1962, such materials were named "Graphene" by German chemist Hanns-Peter Boehm, who had spotted them under his electron microscope the year before.

We have listed detailed uses of Graphene, marketing and commercialization strategy elsewhere in this registration statements. However, to briefly outline, Graphene can be used for energy storage to water filtration, to solidify various productions through mixing with other raw materials to maintaining body temperature by lacing Graphene in wearables among many other uses of Graphene.

Emerging Growth Company

We are an “emerging growth company” as defined under the federal securities laws and, as such, may elect to comply with certain reduced public company reporting requirements for future filings. As an emerging growth company, we are exempt from certain financial disclosure and governance requirements for up to five years as defined in the Jumpstart Our Business Startups Act (“the JOBS Act”), that eases restrictions on the sale of securities; and increases the number of shareholders a company must have before becoming subject to the SEC’s reporting and disclosure rules. We shall continue to be deemed an emerging growth company until the earliest of:

(a)	our annual gross revenue exceeds $1.07 billion;
(b)	the last day of our fiscal year following the fifth anniversary of the completion of this offering;
(c)	we issue more than $1.0 billion of non-convertible debt in any three-year period; or
(d)	we become a “large accelerated filer,” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

As an emerging growth company we are exempt from Section 404(b) of Sarbanes Oxley. Section 404(a) requires Issuers to publish information in their annual reports concerning the scope and adequacy of the internal control structure and procedures for financial reporting. This statement shall also assess the effectiveness of such internal controls and procedures. Section 404(b) requires that the registered accounting firm shall, in the same report, attest to and report on the assessment on the effectiveness of the internal control structure and procedures for financial reporting.

As an emerging growth company we are also exempt from Section 14A (a) and (b) of the Exchange Act, which requires the shareholder approval of executive compensation and golden parachutes.

We have elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(2) of the JOBS Act, which allows us to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. As a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates.

Exchange Listing

We intend to file an application to list our common stock and warrants on the Exchange under the symbol “NOVS” and “NOVSW,” respectively. No assurance can be given that our application will be approved. If our application to the Exchange is not approved or we otherwise determine that we will not be able to secure the listing of the common stock and warrants on the Exchange, we will not complete the offering.

_____________________________________

 1 See https://www.explainthatstuff.com/.

2

SUMMARY OF THE OFFERING
Securities Offered:	3,333,333 Units, each Unit consisting of one share of our common stock and a warrant to purchase two shares of our common stock. Each warrant will have an exercise price of $5.7875 per share (125% of the assumed public offering price of $4.63 per Unit, which is the midpoint of the estimated offering range set forth on the cover page of this prospectus), is exercisable immediately and will expire five years from the date of issuance. The Units will not be certificated or issued in stand-alone form. The shares of our common stock and the warrants comprising the Units are immediately separable upon issuance and will be issued separately in this offering.
Common Stock Offered (1):	Up to 3,333,333 shares of the Company’s Common Stock.
Warrants Offered:	Warrants to purchase up to 6,666,66 6 shares of the Company’s common stock. The warrants are exercisable immediately, and will be issued separately in this offering, but will be purchased together in this offering. The exercise price of the warrants is $5.7875 per share (125% of the public offering price of one Unit stock based on assumed offering price of $4.63 per Unit, which is the midpoint of the estimated offering range set forth on the cover page of this prospectus). Each warrant is exercisable for two shares of common stock, subject to adjustment in the event of stock dividends, stock splits, stock combinations, reclassifications, reorganizations or similar events affecting our common stock as described herein. A holder may not exercise any portion of a warrant to the extent that the holder, together with its affiliates and any other person or entity acting as a group, would own more than 4.99% of the outstanding common stock after exercise, as such percentage ownership is determined in accordance with the terms of the warrants, except that upon notice from the holder to us, the holder may waive such limitation up to a percentage, not in excess of 9.99%. Each warrant will be exercisable immediately upon issuance and will expire years after the initial issuance date. The terms of the warrants will be governed by a Warrant Agreement, dated as of the effective date of this offering, between us and VStock Transfer, LLC, as the warrant agent (the “Warrant Agent”). This prospectus also relates to the offering of the common stock issuable upon exercise of the warrants. For more information regarding the Warrants, you should carefully read the section titled “Description of Securities to be Registered — Warrants” in this prospectus.
Gross proceeds to us, net of underwriting discounts and commissions but before expenses:	$14,198,667, or $16,328,465 if the underwriters exercise their option to purchase additional shares and/or warrants in full, based on an assumed public offering price of $4.63 per Unit, which is the midpoint of the estimated offering range set forth on the cover page of this prospectus.
Use of Proceeds:	We will use the net proceeds, for which there is no guarantee of receipt, of this offering to build a manufacturing plant to make Graphene, and for working capital purposes (see “Use of Proceeds” on page 12).
Common Stock Outstanding Prior to the Offering:	10,482,424 shares of Common Stock.

(1)	In addition, the underwriter has been granted an over-allotment option pursuant to which it may purchase an additional 500,000 shares of Common Stock and/or warrants.
(2)	The number of shares of Common Stock outstanding immediately following this offering is based on 10,482,424 shares outstanding as of March 16, 2022 and excludes up to 166,667 shares of Common Stock issuable upon the exercise of the representative’s warrants issued in connection with this offering.

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SUMMARY FINANCIAL INFORMATION

The following summary financial data should be read in conjunction with the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the Financial Statements and Notes thereto, included elsewhere in this prospectus. 

	For the Period
	from
	January 1, 2021
	through
	Dec 31, 2021
Statement of Operations
Revenues	$	-0-
Cost of Revenues	$	-0-
General and Administrative Expenses	$	308,070
Total Operating Expenses	$	308,070
Other Income	$	-0-
Net Loss	$	308,070
Balance Sheet Data	As of December 31, 2021
Cash	$	196,623
Total Assets	$	1,125,213
Total Liabilities	$	634,462
Stockholders’ Equity	$	490,751

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RISK FACTORS

An investment in our Common Stock involves a significant degree of risk. You should not invest in our Common Stock unless you can afford to lose your entire investment. You should consider carefully the following risk factors and other information in this prospectus before deciding to invest in our Common Stock.

Risks Related to our Securities and this Offering

There is no public market for our shares and warrants.

Currently, there is no public market for our shares and warrants. We have applied to list our common stock and warrants on the Exchange under the symbol “NOVS” and “NOVSW,” respectively. There is no assurance that the trading market for our common stock and warrants will become more active or liquid. Furthermore, there can be no assurance any broker will be interested in trading our stock and warrants. Therefore, it may be difficult to sell your shares of common stock and warrants if you desire or need to sell them.

Our management has full discretion as to the use of proceeds from this offering.

We presently anticipate that the net proceeds from this offering will be used for the purposes set forth under “Use of Proceeds” appearing elsewhere in this Offering Memorandum. We reserve the right, however, to use the net proceeds from this offering for other purposes not presently contemplated which we deem to be in our best interests in order to address changed circumstances and opportunities. As a result of the foregoing, purchasers of the securities offered hereby will be entrusting their funds to our management, upon whose judgment and discretion the investors must depend, with only limited information concerning management's specific intentions.

If our shares of common stock become subject to the penny stock rules, it would become more difficult to trade our shares.

The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00, other than securities registered on certain national securities exchanges or authorized for quotation on certain automated quotation systems, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system. If we do not obtain or retain a listing on the Exchange or another national securities exchange and if the price of our common stock is less than $5.00, our common stock could be deemed a penny stock. The penny stock rules require a broker-dealer, before a transaction in a penny stock not otherwise exempt from those rules, to deliver a standardized risk disclosure document containing specified information. In addition, the penny stock rules require that before effecting any transaction in a penny stock not otherwise exempt from those rules, a broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive (i) the purchaser’s written acknowledgment of the receipt of a risk disclosure statement; (ii) a written agreement to transactions involving penny stocks; and (iii) a signed and dated copy of a written suitability statement. These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our common stock, and therefore stockholders may have difficulty selling their shares.

We have effected a reverse stock split of our outstanding common stock.

We expect that the reverse stock split will increase the market price of our common stock while our stock is trading and enable us to meet the minimum market price requirement of the listing rules of the Exchange. However, the effect of a reverse stock split upon the market price of our common stock cannot be predicted with certainty, and the results of reverse stock splits by companies in similar circumstances have been varied. It is possible that the market price of our common stock following the reverse stock split will not increase sufficiently for us to be in compliance with the minimum market price requirement of the Exchange, or if it does, that such price will be sustained. If we are unable to meet the minimum market price requirement, we may be unable to list our shares on the Exchange, in which case such an offering may not be completed.

Even if the reverse stock split achieves the requisite increase in the market price of our common stock, there can be no assurance that we will be approved for listing on the Exchange or able to comply with other continued listing standards of the Exchange.

Even if the market price of our common stock increases sufficiently so that we comply with the minimum market price requirement, we cannot assure you that we will be able to comply with the other standards that we are required to meet in order to be approved for listing on the Exchange or maintain a listing of our common stock on the Exchange. Our failure to meet these requirements may result in our common stock being delisted from the Exchange.

Even after the reverse stock split, the trading price of our common stock may not be high enough to attract new investors, including institutional investors, and may not satisfy the investing requirements of those investors. Consequently, the trading liquidity of our common stock may not improve.

There can be no assurance that the reverse stock split results in a share price that will attract new investors, including institutional investors, or that the share price will satisfy the investing requirements of those investors. As a result, the trading liquidity of our common stock may not necessarily improve, our share price may decline and you may lose all or part of your investment.

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Our stock price may be volatile, which could result in substantial losses to investors and litigation.

In addition to changes to market prices based on our results of operations and the factors discussed elsewhere in this “Risk Factors” section, the market price of and trading volume for our common stock may change for a variety of other reasons, not necessarily related to our actual operating performance. The capital markets have experienced extreme volatility that has often been unrelated to the operating performance of particular companies. These broad market fluctuations may adversely affect the trading price of our common stock. In addition, the average daily trading volume of the securities of small companies can be very low, which may contribute to future volatility. Factors that could cause the market price of our common stock to fluctuate significantly include:

● the results of operating and financial performance and prospects of other companies in our industry;

● strategic actions by us or our competitors, such as acquisitions or restructurings;

● announcements of innovations, increased service capabilities, new or terminated customers or new, amended or terminated contracts by our competitors;

● the public’s reaction to our press releases, other public announcements, and filings with the Securities and Exchange Commission;

● lack of securities analyst coverage or speculation in the press or investment community about us or market opportunities in the smart glass industry;

● changes in government policies in the United States and, as our international business increases, in other foreign countries;

● changes in earnings estimates or recommendations by securities or research analysts who track our common stock or failure of our actual results of operations to meet those expectations;

● market and industry perception of our success, or lack thereof, in pursuing our growth strategy;

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

● any lawsuit involving us, our services or our products;

● arrival and departure of key personnel;

● sales of common stock by us, our investors or members of our management team; and

● changes in general market, economic and political conditions in the United States and global economies or financial markets, including those resulting from natural or man-made disasters.

Any of these factors, as well as broader market and industry factors, may result in large and sudden changes in the trading volume of our common stock and could seriously harm the market price of our common stock, regardless of our operating performance. This may prevent you from being able to sell your shares at or above the price you paid for your shares, if at all. In addition, following periods of volatility in the market price of a company’s shares, stockholders often institute securities class action litigation against that company. Our involvement in any class action suit or other legal proceeding could divert our senior management’s attention and could adversely affect our business, financial condition, results of operations and prospects.

6

Our warrants attached to our stock in our offering may be speculative.

The warrants offered in this offering do not confer any rights of common stock ownership on their holders, such as voting rights or the right to receive dividends, but rather merely represent the right to acquire shares of our common stock at a fixed price for a limited period of time. Specifically, commencing on the date of issuance, holders of the warrants may exercise their right to acquire the common stock and pay an exercise price of $5.7875 per share (125% of the assumed public offering price per Unit), prior to five years from the date of issuance, after which date any unexercised warrants will expire and have no further value. Moreover, following this offering, the market value of the warrants is uncertain and there can be no assurance that the market value of the warrants will equal or exceed their public offering price. There can be no assurance that the market price of the common stock will ever equal or exceed the exercise price of the warrants, and consequently, whether it will ever be profitable for holders of the warrants to exercise the warrants. 

If equity research analysts do not publish research or reports about our business, or if they issue unfavorable commentary or downgrade our common stock, the market price of our common stock will likely decline.

The trading market for our common stock will rely in part on the research and reports that equity research analysts, over whom we have no control, publish about us and our business. We may never obtain research coverage by securities and industry analysts. If no securities or industry analysts commence coverage of our company, the market price for our common stock could decline. In the event we obtain securities or industry analyst coverage, the market price of our common stock could decline if one or more equity analysts downgrade our common stock or if those analysts issue unfavorable commentary, even if it is inaccurate, or cease publishing reports about us or our business.

Assuming we obtain an Exchange listing, we will incur material increased costs and become subject to additional regulations and requirements.

As a newly Exchange-listed public company, we will incur material additional legal, accounting and other expenses including recruiting and retaining qualified independent directors, payment of annual Exchange fees, and satisfying Exchange standards for companies listed with it. If our common stock is listed on an Exchange, we must meet certain financial and liquidity criteria to maintain such listing. If we violate Exchange listing requirements, our common stock may be delisted. If we fail to meet any of the Exchange’s listing standards, our common stock may be delisted. In addition, our board of directors may determine that the cost of maintaining our listing on a national securities exchange outweighs the benefits of such listing. A delisting of our common stock from the Exchange may materially impair our stockholders’ ability to buy and sell our common stock and could have an adverse effect on the market price of, and the efficiency of the trading market for, our common stock. The delisting of our common stock could significantly impair our ability to raise capital and the value of your investment.

We may acquire certain synergistic businesses already in operation in exchange for stock of our company and such acquisition efforts in future periods may be dilutive to our then current shareholders.

Our business model may result in the issuance of our securities to consummate certain acquisitions in the future. As a result, the percentage ownership of our Company held by existing shareholders will be reduced and those shareholders may experience significant dilution. In addition, new securities may contain certain rights, preferences or privileges that are senior to those of our common stock. As we will generally not be required to obtain the consent of our shareholders before entering into acquisition transactions, shareholders are dependent upon the judgment of our management in determining the number of, and characteristics of stock issued as consideration in an acquisition.

Risks Related to Our Business

Our Company is a newly started business and may contain the ordinary risks all new businesses have to go through in the early years.

We were formed on September 21, 2020, and our objective is to build a Graphene manufacturing Facility. Our business prospects are difficult to predict because of the early stage of development, our unproven business strategy, and our capital needs. Like most newly begun companies, we have incurred losses since we began and may continue to incur losses. As a development stage company, we face numerous risks and uncertainties in implementing our business plan and there are no assurances that we will be successful. 

Ownership and control of our Company is concentrated in our management.

As of the date of this Prospectus, our officers and directors beneficially own or control approximately 90.43% of our outstanding shares of common stock. Following this offering, our directors and officers will own approximately 63.50% of our common stock. As a result, they will be able to influence or control matters requiring approval by our stockholders, including the election of directors and the approval of mergers, acquisitions or other extraordinary transactions. These stockholders may have interests that differ from yours and may vote in a way with which you disagree and that may be adverse to your interests. This concentration of ownership may have the effect of delaying, preventing or deterring a change of control of our company, could deprive our stockholders of an opportunity to receive a premium for their stock as part of a sale of our company, and might ultimately affect the potential market price of our stock. Conversely, this concentration may facilitate a change in control at a time when you and other investors may prefer not to sell.

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We have no history of manufacturing Graphene and will be conducting the process based on experiments made in a lab.

We are an early-stage company and have no history of manufacturing and marketing Graphene. Our joint venture partner ARC has bought the rights to patents based on tests done in a lab to make Graphene using Carbon. As such, any future revenues and profits are uncertain until we can make them commercially and begin marketing them.

Our planned Graphene production facility in Kentucky depends on patented technology that we have sublicensed from ARC, which has licensed it from a third party. If the license agreement between ARC and the third party is terminated, we may lose our ability to use such patented technology.

Our Graphene manufacturing facility will use production methods that have been patented by Ohio University, which have been licensed to ARC and sublicensed to us on a non-exclusive basis from ARC. The rights and obligations of our Sublicense will be governed by ARC’s rights and obligations under the License Agreement with Ohio University. We believe it is a standard patent/technology license agreement with typical, boilerplate termination provisions and as in all standard agreements, it could be terminated due to any disputes and if any such termination happened, we may lose our ability to use such patented technology

The License Agreement is between Ohio University and ACM and was effective on February 10, 2021. The term of the License Agreement runs from February 10, 2021, until such time as the last of the Patent Rights as identified in the License Agreement expires pursuant to federal patent law. The License Agreement allows ACM to utilize the patent rights and/or technology rights identified therein to facilitate the extraction, refinement and processing of Critical Elements, Rare Earth Elements and Graphene, as such terms are defined in the License Agreement. A copy of the License Agreement is included as an exhibit to this prospectus and each prospective investor is encouraged to thoroughly review the License Agreement.

The License Agreement requires, among other things, that ACM maintain a bona fide, funded, ongoing and active research, development, manufacturing, marketing and sales program to diligently make, offer for sale and sell Licensed Products so that Licensed Products are currently available to the public as soon as commercially practicable; and, fulfill various Diligence Milestone events identified in the License Agreement. The Diligence Milestones include developing a final design for a pilot facility to exploit the Licensed Product; completion of construction of the pilot facility; developing a final design for a commercial facility to exploit the Licensed Product; identifying feedstock material sources for the Licensed Product; completing construction of the commercial facility; obtaining the first commercial sale of product exploiting the Licensed Product; and obtaining net sales of a minimum of $1,000,000.00. The deadlines for these various Diligence Milestones run from January 1, 2022, through January 1, 2026. There can be no assurances that ACM will meet any of the Diligence Milestones identified in the License Agreement. The failure to meet any one or more of the Diligence Milestones may be treated as a breach of the License and could result in termination of the License Agreement and our corresponding Sublicense.

Consideration for granting of the License Agreement consisted of a nonrefundable payment of $99,773. Additionally, the License Agreement provides for the payment of royalties in amounts ranging from 1.5% to 2% of Net Sales of the Licensed Products. The License Agreement also provides for payment of minimum royalties by ACM in amounts ranging from $7,500 beginning in calendar year 2025 up to $125,000 beginning in calendar year 2027 and predicated upon the three Fields of Use involving Critical Elements, Rare Earth Elements and Graphene. There can be no assurances that ACM will be able to pay the royalties due under the License Agreement on a timely basis. The failure to make any of the royalty payments may be deemed a breach of the License Agreement and could result in termination of the License Agreement and our corresponding Sublicense.

The License Agreement also provides that ACM shall pay all costs and expenses associated with the Patent Rights within 30 days after receipt of each invoice by ACM. The licensor may also require ACM to prepay costs and expenses predicated for certain Patent Rights upon written request by the licensor. The failure of ACM to make any required payment shall be considered a payment default under the terms of the License Agreement. There can be no assurances that ACM will be able to pay the intellectual property management expenses due under the License Agreement on a timely basis. The failure to make any of these payments could result in termination of the License Agreement and our corresponding Sublicense.

On March 31, 2021 we entered into the “Sublicense regarding the building and commercialization of graphene related technologies as identified in the License Agreement. The term of the Sublicense shall continue to run until such time as the License Agreement is terminated. Consideration for the Sublicense shall consist of payment to ARC of fifty percent (50%) of the positive operating income of our Company. Under the terms of the Sublicense, the phrase “positive operating income” is defined as all revenue to our Company less the direct operating costs of the Company from manufacturing and sale of graphene in the operating facilities. The Sublicense requires our Company to raise the capital needed to complete the design, build, and operation of any facility utilizing the Graphene Technologies owned or operated by us. A copy of the Sublicense is included as an exhibit to this prospectus and each prospective investor is encouraged to thoroughly review the Sublicense. There can be no assurances that we will be able to raise the necessary capital to commercially exploit the Graphene Technologies. Our failure to do so could result in the failure of ACM to meet its Diligence Milestones and payment obligations under the terms of the License Agreement. The breach of any Diligence Milestones and/or payment obligations could result in termination of the License Agreement and our corresponding Sublicense.

We plan to look for and seek out joint venture partners in the early years of our business and we may fail to identify joint venture partners or may fail to successfully manage joint ventures.

Since we are at the early stage of Graphene manufacturing industry, we plan to hire personnel, and also, focus on doing joint venture with other companies already operating in the industry. However, there can be no assurance that the Company will be able to identify joint venture candidates or that we will succeed at effectively managing the operation of any joint venture. Unprofitable joint ventures may negatively affect the Company's results of operations and our ability to continue as an ongoing concern. We plan to allocate approximately $4 million to build a factory for our joint venture with ARC, pursuant to which we plan to use the patented technology owned by Ohio University to manufacture Graphene from Carbon and coal byproducts. We plan to allocate approximately $4 million to either acquire or joint venture with one or more other companies to make Graphene using alternative methods and approximately $5 million to begin, acquire or joint venture with one or more companies to make synergistic products made from Graphene. We plan to use about $1 million to hire sales, marketing, finance, and administrative staff. The rest of the funds we plan to use for general working capital purposes. Although we believe we may be able to acquire or enter into joint ventures on fair and reasonable terms with companies for alternative methods of graphene production and to make synergistic products from graphene, there is no assurance that we will be able to negotiate and execute such agreements.

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We may need additional financing which we may not be able to obtain on acceptable terms. Additional capital raising efforts in future periods may be dilutive to our then current shareholders or result in increased interest expenses in future periods.

It may require us to raise additional working capital to continue to implement our business model. Our future capital requirements, however, depend on a number of factors, including our operations, the financial condition of an acquisition target and its needs for capital, our ability to grow revenues from other sources, our ability to manage the growth of our business and our ability to control our expenses. If we raise additional capital through the issuance of debt, this will result in increased interest expense. If we raise additional funds through the issuance of equity or convertible debt securities, the percentage ownership of our Company held by existing shareholders will be reduced and those shareholders may experience significant dilution. In addition, new securities may contain certain rights, preferences or privileges that are senior to those of the Shares. We cannot assure that we will be able to raise the working capital as needed in the future on terms acceptable to us, if at all. If we do not raise funds as needed, we will be unable to fully implement our business model, fund our ongoing operations or grow our company.

We may experience difficulty attracting and retaining qualified management to meet the needs of our anticipated growth, and the failure to manage our growth effectively could have a material adverse effect on our business and financial condition.

We currently do not have enough management with experience in operating a Graphene manufacturing and marketing facility. We intend to use the funds we raise from this offering to hire such management and/or engage in joint venture activities with others already operating processing facilities. Competition for additional qualified management is intense, and we may be unable to attract and retain additional key personnel, or to attract and retain personnel on terms acceptable to us and our failure to do so could have a material adverse effect on our business, results of operations and financial condition.

The success of our business model is dependent upon our ability to identify products and applications using Graphene that we plan to manufacture for commercial use. We may not be able to attract enough companies who may agree to substitute Graphene as the raw materials to produce their products and applications.

Once we begin producing Graphene for commercial use, we will need to look for manufacturers that will use Graphene to make their products. At the current time, there are not many products using Graphene as the raw material. Thus, there is no guarantee that using Graphene as much as their substitutes will be common in the future and as such we face uncertainties as to the successful commercialization of our product.

Changes in the market price of Graphene, which in the past has fluctuated widely, will affect the profitability of our operations and financial condition.

Commodity prices have been volatile in the past and may continue to be volatile in the future. Future price may depend on the actions of dominant producers of global supply. If producers restrict supply, prices may increase or, if such producers decide to release stockpiles accumulated during a period, or due to government regulations, prices may fall. Our business depends on the price of our product to become profitable. We may not be able to weather any volatile price fluctuations, which may affect the profitability of our operations and financial condition.

Commodity manufacturing and sales may be subject to significant governmental regulations, which affect our operations and costs of conducting our business.

Our patented production method requires the use of various commodities and minerals. Mineral extraction and processing are governed by laws and regulations governing mineral concessions, acquisitions, development, and processing. There are also laws regulating exports and taxes on such exports, as well as occupational health and safety standards by which we must abide. These will increase our cost of operation and may delay production. Existing and possible future laws, regulations and permits governing operations and activities of exploration and processing companies, or more stringent implementation, could have a material adverse impact on our business and cause increases in capital expenditures or require abandonment or delays in production.

Our facilities and operations may be subject to a wide variety of federal, state, local and foreign environment laws and regulation which affect our operations and cost of conducting our business.

Our facilities and operations may be subject to a wide variety of federal, state, local and foreign environmental laws and regulations. These laws and regulations relate to air emissions, water discharges and solid and hazardous waste generation, treatment, storage, handling, transportation and disposal; the presence of wastes and other substances; the reporting of, responses to and liability for, releases of hazardous substances into the environment; and the import, production, packaging, labeling and transportation of products that are defined as hazardous or toxic or otherwise believed to have potential to harm the environment or human health. These laws and regulations (and the enforcement thereof) are periodically updated and are becoming increasingly stringent. Our joint venture partner, ARC, has incurred substantial costs in the past and will continue to incur additional costs in the future, to comply with these legal requirements. We expect to incur costs in an estimated amount of approximately $50,000 to comply with these legal requirements as well.

We are dependent on certain key personnel and the loss of these key personnel could have a material adverse effect on our business, financial condition, and results of operations.

Our success, to a certain extent, could be attributable to the management, sales and marketing, and operational expertise of key personnel, that we currently have and may hire and will perform key functions in the operation of our business. The loss of one or more of these key employees could have a material adverse effect upon our business, that could result in our financial condition, and the results of operations to be adversely impacted.

9

We face increasing competition from other established companies, small enterprises, and other organizations that have far greater resources and brand awareness than we have.

A significant number of established businesses, including major commodity manufacturing companies and their affiliates, and other organizations have entered or are planning to enter the Graphene manufacturing and marketing business. Many of these current and potential competitors have substantially greater financial, marketing, research and other resources than we have.

Our management has limited experience operating a public company and are subject to the risks commonly encountered by early-stage companies.

Although our management has experience in operating small companies, current management has not had to manage expansion while being a public company. Many investors may treat us as an early-stage company. In addition, management has not overseen a company with large growth. Because we have a limited operating history, our operating prospects should be considered in light of the risks and uncertainties frequently encountered by early-stage companies in rapidly evolving markets. These risks include:

● risks that we may not have sufficient capital to achieve our growth strategy;

● risks that we may not develop our product and service offerings in a manner that enables us to be profitable and meet our customers’ requirements;

● risks that our growth strategy may not be successful; and

● risks that fluctuations in our operating results will be significant relative to our revenues.

These risks are described in more detail below. Our future growth will depend substantially on our ability to address these, and the other risks described in this section. If we do not successfully address these risks, our business could be significantly harmed.

We may be unable to manage growth, which may impact our potential profitability.

Successful implementation of our business strategy requires us to manage our growth. Growth could place an increasing strain on our management and financial resources. To manage growth effectively, we will need to:

● Establish definitive business strategies, goals and objectives;

● Maintain a system of management controls; and

● Attract and retain qualified personnel, as well as develop, train, and manage management-level and other employees.

If we fail to manage our growth effectively, our business, financial condition, or operating results could be materially harmed, and our stock price may decline.

We plan to become a public company soon after this offering and expect to incur substantial expenses to meet our reporting obligations as a public company. In addition, failure to maintain adequate financial and management processes and controls could lead to errors in our financial reporting and could harm our ability to manage our expenses.

We estimate that it will cost approximately $150,000 annually to maintain the proper management and financial controls for our filings required as a public reporting company that we hope to become soon after this offering. In addition, if we do not maintain adequate financial and management personnel, processes and controls, we may not be able to accurately report our financial performance on a timely basis, which could cause a decline in our stock price and adversely affect our ability to raise capital.

10

We may not pay dividends in the future; any return on investment may be limited to the value of our common stock.

We do not currently anticipate paying cash dividends in the foreseeable future. The payment of cash dividends on our common stock will depend on earnings, financial condition and other business and economic factors affecting it at such time as the board of directors may consider relevant. Our current intention is to apply net earnings, if any, in the foreseeable future to increasing our capital base and development and marketing efforts. There can be no assurance that the Company will ever have sufficient earnings to declare and pay cash dividends to the holders of our common stock, and in any event, a decision to declare and pay dividends is at the sole discretion of our board of directors. If we do not pay dividends, our common stock may be less valuable because a return on your investment will only occur if its stock price appreciates.

The elimination of monetary liability against our directors, officers and employees under our Articles of Incorporation and the existence of indemnification rights to our directors, officers and employees may result in substantial expenditures by our company and may discourage lawsuits against our directors, officers and employees.

Our Articles of Incorporation contains provisions that eliminate the liability of our directors for monetary damages to our company and shareholders. Our bylaws also require us to indemnify our officers and directors. We may also have contractual indemnification obligations under our agreements with our directors, officers and employees. The foregoing indemnification obligations could result in our company incurring substantial expenditures to cover the cost of settlement or damage awards against directors, officers and employees that we may be unable to recoup. These provisions and resulting costs may also discourage our company from bringing a lawsuit against directors, officers and employees for breaches of their fiduciary duties, and may similarly discourage the filing of derivative litigation by our shareholders against our directors, officers and employees even though such actions, if successful, might otherwise benefit our company and shareholders.

We are classified as an “emerging growth company” as well as a “smaller reporting company” and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies and smaller reporting companies will make our common stock less attractive to investors.

We are an “emerging growth company,” as defined in the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.

Section 107 of the JOBS Act 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 irrevocably opted out of the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act.

We could 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 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 stock that is held by non-affiliates exceeds $1.07 billion as of the last business day of our most recently completed second fiscal quarter, and (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three-year period.

Notwithstanding the above, we are also currently a “smaller reporting company.” Specifically, similar to “emerging growth companies,” “smaller reporting companies” are able to provide simplified executive compensation disclosures in their filings; are exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that independent registered public accounting firms provide an attestation report on the effectiveness of internal control over financial reporting; and have certain other decreased disclosure obligations in their SEC filings. Decreased disclosures in our SEC filings due to our status as an “emerging growth company” or “smaller reporting company” may make it harder for investors to analyze our results of operations and financial prospects.

The ongoing COVID-19 pandemic could adversely impact our business, including our potential production facilities.

In December 2019, a novel strain of coronavirus, SARS-CoV-2, was reported to have surfaced in Wuhan, China and to cause a severe respiratory illness now known as COVID-19. Since then, COVID-19 has spread to multiple countries. In March 2020, the World Health Organization declared the COVID-19 outbreak a pandemic, and the U.S. government-imposed travel restrictions on travel between the United States, Europe, Canada and other countries. Further, the President of the United States declared the COVID-19 pandemic a national emergency, invoking powers under the Stafford Act, the legislation that directs federal emergency disaster response. We may experience disruptions due to the COVID-19 pandemic that could severely impact our business and potential production facilities.

The global COVID-19 pandemic continues to rapidly evolve. The extent to which COVID-19 may impact our business will depend on future developments that are highly uncertain and cannot be predicted with confidence, such as the ultimate geographic spread of the disease, the duration of the outbreak, travel restrictions and social distancing in the United States and other countries, business closures or business disruptions and the effectiveness of actions taken in the United States and other countries to contain and treat the disease.

11

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

Various statements in this prospectus contain or may contain forward-looking statements that are subject to known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These forward-looking statements were based on various factors and were derived from utilizing numerous assumptions and other factors that could cause our actual results to differ materially from those in the forward-looking statements. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including those discussed under “Risk Factors,” which could cause our actual results to differ from those projected in any forward-looking statements we make.

Most of these factors are difficult to predict accurately and are generally beyond our control. You should consider the areas of risk described in connection with any forward-looking statements that may be made herein. Readers are cautioned not to place undue reliance on these forward-looking statements and readers should carefully review this prospectus in its entirety, including the risks described in “Risk Factors.” Except for our ongoing obligations to disclose material information under the Federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events. These forward-looking statements speak only as of the date of this prospectus, and you should not rely on these statements without also considering the risks and uncertainties associated with these statements and our business.

USE OF PROCEEDS

After deducting the estimated underwriting discounts and commissions and offering expenses payable by us, we expect to receive net proceeds of approximately $13,198,667 from this offering (or approximately $15,328,465 if the underwriters’ option to purchase additional shares and/or warrants in this offering are exercised in full), based on an assumed public offering price of $4.63 per Unit (the midpoint of the range set forth on the cover page of this prospectus). This estimate excludes the proceeds, if any, from the exercise of the 166,667 representative’s warrants issued in connection with this offering We cannot predict when, or if, these warrants will be exercised. It is possible that these warrants may expire and may never be exercised.

We plan to allocate approximately $4 million to build a factory for our joint venture with ARC, pursuant to which we plan to use the patented technology owned by Ohio University to manufacture Graphene from Carbon and coal byproducts. We plan to allocate approximately $3.5 million to either acquire or joint venture with one or more other companies to make Graphene using alternative methods and approximately $1.5 million to begin, acquire or joint venture with one or more companies to make synergistic products made from Graphene. We plan to use about $1 million to hire sales, marketing, finance, and administrative staff. The rest of the funds we plan to use for general working capital purposes. Although we believe we may be able to acquire or enter into joint ventures on fair and reasonable terms with companies for alternative methods of graphene production and to make synergistic products from graphene, there is no assurance that we will be able to negotiate and execute such agreements.

Each $1.00 increase or decrease in the assumed public offering price of $4.63 per Unit would increase (decrease) the net proceeds that we receive from this offering by approximately $3,066,667, assuming that the number of shares of common stock offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. Similarly, each increase (decrease) of 1,000,000 shares of common stock and accompanying warrants offered by us in this offering would increase (decrease) the net proceeds that we receive from this offering by approximately $4,259,600 assuming the assumed public offering price remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

The following table shows how we currently expect to use our proceeds from the Units being offered (after our estimated offering expenses of up to $1,000,000).

These estimates are presented for illustrative purposes only and the actual amount of proceeds received may differ. As there is no minimum offering, we cannot estimate how much in proceeds we will receive from the sale of the Units offered hereby.

	Amount
Factory build out	$	4,000,000
Alternative Graphene production acquisition/joint venture	$	3,500,000
Synergistic product acquisition/joint venture	$	1,500,000
Management recruitment	$	1,000,000
Underwriting discounts and commissions and other offering expenses	$	2,200,000
Working capital (1)	$	3,233,332
Total use of proceeds (2)	$	15,433,332

(1) Includes funds for general overhead and operating expenses including ordinary and fair compensation for officers and directors as well as fees and costs associated with an application to list our common stock on the Exchange.

(2) In the event that the underwriter exercises the over-allotment option, we intend to use Such additional net proceeds for additional acquisitions, working capital and general corporate purposes.

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The precise amounts that we will devote to each of the foregoing items, and the timing of expenditures, will vary depending on numerous factors.

The expected use of net proceeds from this offering represents our intentions based upon our current plans and business conditions, which could change in the future as our plans and business conditions evolve and change. The amounts and timing of our actual expenditures, specifically with respect to working capital, may vary significantly depending on numerous factors. The precise amounts that we will devote to each of the foregoing items, and the timing of expenditures, will vary depending on numerous factors. As a result, our management will retain broad discretion over the allocation of the net proceeds from this offering.

DILUTION

Dilution represents the difference between the offering price and the net tangible book value per share of common equity immediately after completion of this offering. Net tangible book value is the amount that results from subtracting our total liabilities and intangible assets from our total assets. Dilution arises mainly as a result of our arbitrary determination of the offering price of the shares of Common Stock being offered. Dilution of the value of the shares of Common Stock you purchase is also a result of the lower net tangible book value of the shares held by our existing shareholders.

As of December 31, 2021, the net tangible book value of our shares of common equity was approximately $19,751 based upon 10,481,347 shares of Common Stock outstanding, or approximately $0.0019 per share. The following table provides information regarding:

● the net tangible book value per share of common equity before and after this offering;

● the amount of the increase in the net tangible book value per share of common equity attributable to the purchase of the shares of Common Stock being offered hereby; and

● the amount of the immediate dilution from the public offering price which will be absorbed by purchasers in this offering.

This dilution scenario below is presented for illustrative purposes only and the actual amount of dilution to purchasers in this offering may differ based upon the number of Units sold in this offering.

Assumed Initial Public Offering price per Unit	$	4.6300
Net tangible book value per share of common equity as of December 31, 2021	$	0.0019
Increase in net book value per share of common equity due to offering	$	0.8995
Pro forma net tangible book value per share of common equity after offering	$	0.9014
Dilution per share to investors purchasing shares of Common Stock in this offering.	$	3.7286

The following table sets forth on a pro forma basis, at December 31, 2021, the number of shares of common stock purchased or to be purchased from us, the total consideration paid or to be paid and the average price per share paid or to be paid by existing holders of common stock and by the new investors, before deducting estimated offering expenses payable by us.

	Number		Percent			Amount			Percent			per share
Existing stockholders		10,481,347		75.87	%		490,751	(1)		3.08	%	$	0.0468
New investors		3,333,333		24.13	%	$	15,433,333			96.92	%	$	4.63
Total		13,814,680		100.00	%		15,924,084			100.00	%	$	1.1527

(1) Includes intangible assets valued at $471,000 that were included as consideration for shares of common stock issued by the Company.

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CAPITALIZATION

The following table sets forth our capitalization as of December 31, 2021:

● on an actual basis; and

● on a pro forma basis to reflect the sale of 3,333,333 Units by us in this offering at an assumed price to the public of $4.63 per Unit (the midpoint of the range listed on the cover page of this prospectus), resulting in net proceeds to us of $13,198,665 after deducting (i) underwriting discounts and commissions of $1,234,667 and (ii) our estimated other offering expenses of $1,000,000.

The pro forma information below is illustrative only and our capitalization following the completion of this offering is subject to adjustment based on the public offering price of the shares of common stock and other terms of this offering determined at pricing. You should read this table together with our consolidated financial statements and the related notes included elsewhere in this prospectus and the information under “Management’s Discussion and Analysis of Financial Statements and Results of Operations”.

Offering (3,333,333 Units)

	Actual(1)			Pro Forma Offering Amount
	(Unaudited)			(Unaudited)(2)
Cash and Cash Equivalents	$	196,623		$	13,395,288
Stockholders (deficit) equity:
Preferred Stock, no par value per share, 400,000,000 shares authorized(1)(2)	$	-		$
Common Stock, no par value per share, 2,600,000,000 shares authorized(1)(2)	$	801,359		$	14,000,024
Treasury Stock	$	-		$
Accumulated deficit	$	(310,608	)	$	(310,608	)
Total Stockholders’ Equity (Deficit)	$	490,751		$	13,689,416

(1) 10,481,347 shares of Common Stock and 0 shares of preferred stock issued and outstanding as of December 31, 2021.

(2) 13,814,680 shares of Common Stock and 0 shares of preferred stock issued and outstanding (pro forma) as of December 31, 2021 after the completion of this offering.

Each $1.00 increase (decrease) in the assumed offering price per Unit of $4.63, assuming no change in the number of Units of 3,333,333 to be sold, would increase (decrease) the net proceeds that we receive in this offering and each of total stockholders’ equity and total capitalization by approximately $3,066,667, after deducting (i) estimated underwriting discounts and commissions and (ii) offering expenses, in each case, payable by us. Similarly, an increase (decrease) of 1,000,000 Units offered by us in this offering of 3,333,333, assuming no change in the offering price, would increase (decrease) the net proceeds that we receive in this offering and each of total stockholders’ equity and total capitalization by approximately $4,259,600 after deducting (i) estimated underwriting discounts and commissions and (ii) offering expenses, in each case, payable by us.

The table above excludes up to 6,666,66 6  shares of Common Stock issuable upon the exercise of the warrants issued as part of the Units in connection with this offering and 166,667 shares of Common Stock issuable upon the exercise of the representative’s warrants issued in connection with this offering.

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UNDERWRITING

EF Hutton, division of Benchmark Investments, LLC (“EF Hutton”) is acting as representative of each of the underwriters named below. Subject to the terms and conditions set forth in an underwriting agreement among us and the underwriters, we have agreed to sell to the underwriters, and each of the underwriters has agreed, severally and not jointly, to purchase from us, the number of Units set forth opposite its name below.

Underwriter	Number of Units
EF Hutton, division of Benchmark Investments, LLC		3,333,333
Total		3,333,333

Subject to the terms and conditions set forth in the underwriting agreement, the underwriters have agreed, severally and not jointly, to purchase all of the Units sold under the underwriting agreement if any of these Units are purchased. If an underwriter defaults, the underwriting agreement provides that the purchase commitments of the non-defaulting underwriters may be increased, or the underwriting agreement may be terminated.

We have agreed to indemnify the underwriters against specified liabilities, including some liabilities under the Securities Act, or to contribute to payments the underwriters may be required to make in respect of those liabilities.

The underwriters are offering the Units, subject to prior sale, when, as and if issued to and accepted by them, subject to approval of legal matters by their counsel, including the validity of the shares and warrants, and other conditions contained in the underwriting agreement, such as the receipt by the underwriters of officer’s certificates and legal opinions. The underwriters reserve the right to withdraw, cancel or modify offers to the public and to reject orders in whole or in part.

Commissions and Discounts

The representatives have advised us that they propose initially to offer the Units to the public at the public offering price set forth on the cover page of this prospectus and to dealers at that price less a concession not in excess of $[ ] per Unit. After the initial public offering, the public offering price, concession and discount may be changed.

The following table shows the per Unit and total underwriting discounts and commissions to be paid to the underwriters. Such amounts are shown assuming both no exercise and full exercise of the underwriters’ option to purchase additional shares and/or warrants.

	Per Unit	Total Without Exercise of Over-Allotment Option	Total With Exercise of Over-Allotment Option
Public offering price	$	$	$
Underwriting discount and commissions	$	$	$
Nonaccountable expense allowance (1.0%)	$	$	$
Proceeds, before expenses, to the Company	$	$	$

The total expenses of the offering, not including the underwriting discount, commissions and the nonaccountable expense, are estimated at approximately $   million and are payable by us. We have also agreed to pay all of the expenses relating to the offering, including, but not limited to, all filing fees and communication expenses relating to the registration of the common stock and the warrants to be sold in this offering (including the over-allotment); all fees and expenses relating to the listing of the common stock and warrants on the Exchange; if the offering requires “blue sky” registration, fees of legal counsel performing such work; the costs of all mailing and printing of the underwriting documents, registration statements and prospectuses; the costs of preparing, printing and delivering certificates representing the common stock and warrants issued in this offering; fees and expenses of the transfer agent for our common stock and warrants; stock transfer taxes, if any; the fees and expenses of our accountants and of our legal counsel and other agents and representatives; and travel expenses relating to the “road show” marketing trips. We will reimburse the underwriters up to $150,000 for its actual out-of-pocket expenses incurred for this offering (including but not limited to fees and expenses of underwriter counsel, all reasonable fees, expenses and disbursements relating to background checks of our officers and directors, and expenses of internet roadshow software systems) less any advances provided for such expenses (which shall be returned to us to the extent not offset by actual expenses) in the event of the closing of this offering and up to $50,000 in the event that there is not a closing of this offering.

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Underwriters’ Warrants

We have agreed to issue to EF Hutton common share purchase warrants (the “Underwriters’ Warrants”) covering a number of shares of common stock equal up to 166,667 shares of our common stock (5% of the total number of Units being sold in this offering, excluding the overallotment). The Underwriters’ Warrants may not be exercised for six months after the effective date of the registration statement and will expire five years after such effective date. The Underwriters’ Warrants will be exercisable at a price equal to $4.63 per share (100% of the IPO per Unit price, (based on the sale of 3,333,333 shares of our common stock and assuming an IPO per Unit price of $4.63). The Underwriters’ Warrants shall not be redeemable. The warrants and the shares  of  common stock  underlying  the warrants  have  been  deemed  compensation by  FINRA  and are therefore subject  to a 180-day  lock-up pursuant  to Rule 5110(e)(1) of FINRA. The Underwriters’ Warrants may not be sold, transferred, assigned, pledged or hypothecated or be the subject of any hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of the securities for a period of 180 days following the effective date of the registration for this offering, except that they may be assigned, in whole or in part, to any officer or partner of the Underwriter, and to members of the underwriting syndicate or selling group (or to officers or partners thereof), or as otherwise permitted, in compliance with FINRA Rule 5110(e)(2). The Underwriters’ Warrants will contain provisions for one demand registration of the sale of the underlying shares of common stock at our expense (in the event that our registration statement covering the Underwriters’ Warrants and the underlying common stock is no longer effective), and unlimited “piggyback” registration rights for a period of five (5) years after the effective date of the registration statement for this offering at our expense. The demand registration right provided will not be greater than five years from the effective date of the registration statement related to this offering in compliance with FINRA Rule 5110(g)(8)(C). The book runners will split the Underwriters’ Warrants on the same pro rata percentage of the amount of the offering each book runner underwrites. The exercise price and number of shares issuable upon exercise of the Underwriters’ Warrants may be adjusted in certain circumstances including in the event of a stock split or other corporate events and as otherwise permitted under Rule 5110(f)(2)(G) of FINRA.

Over-Allotment Option

We have granted an option to the underwriters to purchase up to 500,000 additional shares of common stock and/or warrants at the public offering price less the underwriting discount. The underwriters may exercise this option for 45 days from the date of this prospectus solely to cover any over-allotments. If the underwriters exercise this option, each will be obligated, subject to conditions contained in the underwriting agreement, to purchase the number of additional shares and/or warrants proportionate to that underwriter’s allotment reflected in the above table.

No Sales of Similar Securities

Our founders, executive officers and directors, and certain existing stockholders have agreed, subject to limited exceptions, not to sell or transfer any common stock for one hundred eighty days after the date of this prospectus without first obtaining the written consent of EF Hutton. Specifically, we and these other persons have agreed, subject to certain limitations, not to directly or indirectly:

● offer, pledge, sell or contract to sell any common stock;

● sell any option or contract to purchase any common stock;

● purchase any option or contract to sell any common stock;

● grant any option, right or warrant for the sale of any common stock;

● lend or otherwise dispose of or transfer any common stock;

● request or demand that we file a registration statement related to the common stock; or

● enter into any swap or other agreement that transfers, in whole or in part, the economic consequence of ownership of any common stock whether any such swap or transaction is to be settled by delivery of shares or other securities, in cash or otherwise.

This lockup provision applies to common stock and to securities convertible into or exchangeable or exercisable for or repayable with common stock. It also applies to common stock owned now or acquired later by the person executing the agreement or for which the person executing the agreement later acquires the power of disposition.

The Underwriting Agreement provides that for a period of three hundred sixty days from the effective date of the Underwriting Agreement, the Company may not issue, enter into any agreement to issue or announce the issuance or proposed issuance of any shares of common stock. This prohibition does not apply to (i) equity grants to employees, officers or directors under an equity incentive plan established by the Company, (ii) the issuance of securities upon the exercise or exchange of or conversion of any securities issued under the Underwriting Agreement and/or other securities exercisable or exchangeable for or convertible into shares of common stock issued and outstanding on the date of the Underwriting Agreement, (iii) shares of common stock issued as part of the purchase price in connection with the acquisitions or strategic transactions, provided certain conditions are met, or (iv) the issuance of shares of our common stock upon conversion or exercise of outstanding convertible debt, options and warrants.

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Listing on the Exchange

We have applied to list our common stock and warrants on the Exchange under the symbol “NOVS” and “NOVSW,” respectively.

Before this offering, there has been no public market for our common stock or warrants. The public offering price was determined through negotiations among us and the representatives. In addition to prevailing market conditions, the factors considered in determining the public offering price are:

● the valuation multiples of publicly traded companies that the representatives believe to be comparable to us;

● our financial information;

● the history of, and the prospects for, our company and the industry in which we compete;

● an assessment of our management, its past and present operations, and the prospects for, and timing of, our future revenues;

● the present state of our development; and

● the above factors in relation to market values and various valuation measures of other companies engaged in activities similar to ours.

An active trading market for the shares may not develop. It is also possible that after this offering the shares will not trade in the public market at or above the public offering price. The underwriters do not expect to confirm sales of the securities offered hereby to accounts over which they exercise discretionary authority.

Price Stabilization, Short Positions and Penalty Bids

Until the distribution of the shares is completed, SEC rules may limit underwriters and selling group members from bidding for and purchasing our common stock. However, the representatives may engage in transactions that stabilize the price of the common stock, such as bids or purchases to peg, fix or maintain that price.

The underwriters may purchase and sell the common stock in the open market. These transactions may include short sales, stabilizing transactions and purchases to cover positions created by short sales. Short sales involve the sale by the underwriters of a greater number of shares than they are required to purchase in this offering. “Covered” short sales are sales made in an amount not greater than the underwriters’ option to purchase additional shares from the issuer in this offering. The underwriters may close out any covered short position by either exercising their option to purchase additional shares or purchasing shares in the open market. In determining the source of shares to close out the covered short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase shares through the over-allotment option. “Naked” short sales are any sales in excess of such option. The underwriters must close out any naked short position by purchasing shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the common shares in the open market after pricing that could adversely affect investors who purchase in this offering. Stabilizing transactions consist of various bids for or purchases of common shares made by the underwriters in the open market prior to the completion of this offering.

The underwriters may also impose a penalty bid. This occurs when a particular underwriter repays to the underwriters a portion of the underwriting discount received by it because the representatives have repurchased shares sold by or for the account of such underwriter in stabilizing or short covering transactions.

Similar to other purchase transactions, the underwriters’ purchases to cover the syndicate short sales may have the effect of raising or maintaining the market price of the common stock or preventing or retarding a decline in the market price of the common stock. As a result, the price of the common stock may be higher than the price that might otherwise exist in the open market.

Neither we nor any of the underwriters make any representation or prediction as to the direction or magnitude of any effect that the transactions described above may have on the price of the common stock. In addition, neither we nor any of the representatives make any representation that the representatives will engage in these transactions or that these transactions, once commenced, will not be discontinued without notice.

Electronic Distribution

In connection with the offering, certain of the underwriters or securities dealers may distribute prospectuses by electronic means, such as e-mail.

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Other Relationships

The underwriters and their respective affiliates are full service financial institutions engaged in various activities, which may include sales and trading, commercial and investment banking, advisory, investment management, investment research, principal investment, hedging, market making, brokerage and other financial and non-financial activities and services. Certain of the underwriters and their respective affiliates have provided, and may in the future provide, a variety of these services to the Company and to persons and entities with relationships with DBG, for which they received or will receive customary fees and expenses.

Notice to Prospective Investors in the European Economic Area

In relation to each member state of the European Economic Area that has implemented the Prospectus Directive (each, a relevant member state), with effect from and including the date on which the Prospectus Directive is implemented in that relevant member state (the relevant implementation date), an offer of shares described in this prospectus may not be made to the public in that relevant member state other than:

● to any legal entity which is a qualified investor as defined in the Prospectus Directive;

● to fewer than 100 or, if the relevant member state has implemented the relevant provision of the 2010 PD Amending Directive, 150 natural or legal persons (other than qualified investors as defined in the Prospectus Directive), as permitted under the Prospectus Directive, subject to obtaining the prior consent of the relevant Dealer or Dealers nominated by us for any such offer; or

● in any other circumstances falling within Article 3(2) of the Prospectus Directive,

● provided that no such offer of shares shall require us or any underwriter to publish a prospectus pursuant to Article 3 of the Prospectus Directive.

For purposes of this provision, the expression an “offer of securities to the public” in any relevant member state means the communication in any form and by any means of sufficient information on the terms of the offer and the shares to be offered so as to enable an investor to decide to purchase or subscribe for the shares, as the expression may be varied in that member state by any measure implementing the Prospectus Directive in that member state, and the expression “Prospectus Directive” means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the relevant member state) and includes any relevant implementing measure in the relevant member state. The expression 2010 PD Amending Directive means Directive 2010/73/EU.

The sellers of the shares have not authorized and do not authorize the making of any offer of shares through any financial intermediary on their behalf, other than offers made by the underwriters with a view to the final placement of the shares as contemplated in this prospectus. Accordingly, no purchaser of the shares, other than the underwriters, is authorized to make any further offer of the shares on behalf of the sellers or the underwriters.

Notice to Prospective Investors in the United Kingdom

This prospectus is only being distributed to, and is only directed at, persons in the United Kingdom that are qualified investors within the meaning of Article 2(1)(e) of the Prospectus Directive that are also (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or (ii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (each such person being referred to as a “relevant person”). This prospectus and its contents are confidential and should not be distributed, published or reproduced (in whole or in part) or disclosed by recipients to any other persons in the United Kingdom. Any person in the United Kingdom that is not a relevant person should not act or rely on this document or any of its contents.

Canada

The securities may be sold in Canada only to purchasers purchasing, or deemed to be purchasing, as principal that are accredited investors, as defined in National Instrument 45-106 Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario), and are permitted clients, as defined in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations. Any resale of the securities must be made in accordance with an exemption from, or in a transaction not subject to, the prospectus requirements of applicable securities laws. Securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if this prospectus (including any amendment thereto) contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser’s province or territory. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser’s province or territory for particulars of these rights or consult with a legal advisor. Pursuant to section 3A.3 of National Instrument 33-105 Underwriting Conflicts (NI 33-105), the underwriters are not required to comply with the disclosure requirements of NI33-105 regarding underwriter conflicts of interest in connection with this offering.

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Notice to Prospective Investors in Canada

No securities commission or similar regulatory authority in Canada has reviewed or in any way passed upon this prospectus or on the merits of the securities and any representation to the contrary is an offence. The offering is being made by a non-Canadian issuer using disclosure documents prepared in accordance with non-Canadian securities laws. Canadian purchasers should be aware that these requirements may differ significantly from those of requirements under applicable Canadian securities laws. In addition, prospective purchasers resident in a province or territory of Canada should be aware that the financial statements and other financial information contained and incorporated by reference herein have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) and (where audited) have been subjected to U.S. auditing and U.S. auditor independence standards. U.S. GAAP and U.S. auditing standards differ in certain respects from Canadian generally accepted accounting principles, International Financial Reporting Standards (“IFRS”) and Canadian auditing standards, and thus the consolidated financial statements and other financial information contained or incorporated by reference herein may not be comparable to financial statements and financial information of Canadian companies.

Some or all of the directors and officers of the Company, and certain experts named herein, may be located outside of Canada and, as a result, it may not be possible for purchasers to effect service of process within Canada upon the Company or those persons. All or a substantial portion of the assets of the Company and those persons may be located outside of Canada and, as a result, it may not be possible to satisfy a judgment against the Company or those persons in Canada or to enforce a judgment obtained in Canadian courts against the Company or those persons outside of Canada.

Nova Scotia Purchasers

Under Nova Scotia securities legislation, certain purchasers who purchase shares of common stock offered by this prospectus during the period of distribution will have a statutory right of action for damages against the Company and the directors of the Company as of the date of this prospectus, or while still the owner of the shares of common stock, for rescission against the Company if this prospectus, or a document incorporated by reference in or deemed incorporated into this prospectus, contains a misrepresentation without regard to whether the purchasers relied on the misrepresentation. The right of action for rescission or damages is exercisable not later than 120 days from the date on which payment is made for the shares of common stock or after the date on which the initial payment for the shares of common stock was made where payments subsequent to the initial payment are made pursuant to a contractual commitment assumed prior to, or concurrently with, the initial payment. If a purchaser elects to exercise the right of action for rescission, the purchaser will have no right of action for damages against the Company or the directors of the Company. In no case will the amount recoverable in any action exceed the price at which the shares of common stock were offered to the purchaser and if the purchaser is shown to have purchased the shares of common stock with knowledge of the misrepresentation, the Company and the directors of the Company will have no liability. In the case of an action for damages, the Company and the directors of the Company will not be liable for all or any portion of the damages that are proven to not represent the depreciation in value of the shares of common stock as a result of the misrepresentation relied upon. These rights are in addition to, and without derogation from, any other rights or remedies available at law to a Nova Scotia purchaser. The foregoing is a summary of the rights available to a Nova Scotia purchaser. Not all defenses upon which the Company or others may rely are described herein. Nova Scotia purchasers should refer to the complete text of the relevant statutory provisions.

Saskatchewan Purchasers

Under Saskatchewan securities legislation, certain purchasers who purchase shares of common stock offered by this prospectus during the period of distribution will have a statutory right of action for damages against the Company and every director of the Company as of the date of this prospectus, and every person or company who sells the shares of common stock on behalf of the Company under this prospectus, or while still the owner of the shares of common stock, for rescission against the Company if this prospectus contains a misrepresentation without regard to whether the purchasers relied on the misrepresentation. The right of action for damages is exercisable not later than the earlier of one year from the date the purchaser first had knowledge of the facts giving rise to the cause of action and six years from the date on which payment is made for the shares of common stock. The right of action for rescission is exercisable not later than 180 days from the date on which payment is made for the shares of common stock. If a purchaser elects to exercise the right of action for rescission, the purchaser will have no right of action for damages against the Company or the others listed above. In no case will the amount recoverable in any action exceed the price at which the shares of common stock were offered to the purchaser and if the purchaser is shown to have purchased the shares of common stock with knowledge of the misrepresentation, the Company and the others listed above will have no liability. In the case of an action for damages, the Company and the others listed above will not be liable for all or any portion of the damages that are proven to not represent the depreciation in value of the shares of common stock as a result of the misrepresentation relied upon. A purchaser who receives an amended prospectus has the right to withdraw from the agreement to purchase the shares of common stock by delivering a notice to the Company within two business days of receiving the amended prospectus. These rights are in addition to, and without derogation from any other rights or remedies available at law to a Saskatchewan purchaser. The foregoing is a summary of the rights available to a Saskatchewan purchaser. Not all defenses upon which the Company or others may rely are described herein. Saskatchewan purchasers should refer to the complete text of the relevant statutory provisions.

Resale Restrictions

The offer and sale of the securities in Canada is being made on a private placement basis only and is exempt from the requirement that the Company prepares and files a prospectus under applicable Canadian securities laws. Any resale of securities acquired by a Canadian investor in this offering must be made in accordance with applicable Canadian securities laws, which may vary depending on the relevant jurisdiction, and which may require resales to be made in accordance with Canadian prospectus requirements, pursuant to a statutory exemption from the prospectus requirements, in a transaction exempt from the prospectus requirements or otherwise under a discretionary exemption from the prospectus requirements granted by the applicable local Canadian securities regulatory authority. These resale restrictions may under certain circumstances apply to resales of the securities outside of Canada. By purchasing shares of common stock under the offering and accepting delivery of a purchase confirmation, each Canadian purchaser is deemed to acknowledge that pursuant that it is receiving notice that, unless permitted under applicable Canadian securities laws, the holder of the securities offered herein must not trade any of the securities to a resident of Canada before the date that is four months and a day after the distribution date (expected to be on or about [ ], 2021).

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Taxation and Eligibility for Investment

Any discussion of taxation and related matters contained in this prospectus does not purport to be a comprehensive description of all of the tax considerations that may be relevant to a Canadian investor when deciding to purchase the shares and, in particular, does not address any Canadian tax considerations. No representation or warranty is hereby made as to the tax consequences to a resident, or deemed resident, of Canada of an investment in the shares or with respect to the eligibility of the shares for investment by such investor under relevant Canadian federal and provincial legislation and regulations.

Language of Documents

Upon receipt of this document, each Canadian investor hereby confirms that it has expressly requested that all documents evidencing or relating in any way to the sale of the securities described herein (including for greater certainty any purchase confirmation or any notice) be drawn up in the English language only. Par la réception de ce document, chaque investisseur canadien confirme par les présentes qu’il a expressément exigé que tous les documents faisant foi ou se rapportant de quelque manière que ce soit à la vente des valeurs mobilières décrites aux présentes (incluant, pour plus de certitude, toute confirmation d’achat ou tout avis) soient rédigés en anglais seulement.

DESCRIPTION OF SECURITIES TO BE REGISTERED

General

We are authorized to issue an aggregate number of 3,000,000,000 shares of capital stock, of which (i) 2,600,000,000 shares are Common Stock, at no par value per share; and (ii) 400,000,000 shares of preferred stock, at no par value per share.

Common Stock

We are authorized to issue 2,600,000,000 shares of Common Stock. As of March 16, 2022, 10,482,424 shares of the Common Stock are issued and outstanding.

Each share of Common Stock shall have one (1) vote per share for all purposes. Our common stock does not provide a preemptive or conversion right and there are no redemption or sinking fund provisions or rights. Holders of our Common Stock are not entitled to cumulative voting for election of the Company’s board of directors.

The holders of our Common Stock are entitled to dividends out of funds legally available when and as declared by our board of directors. Our board of directors has never declared a cash dividend and does not anticipate declaring a dividend in the foreseeable future.

Preferred Stock

We are authorized to issue up to 400,000,000 shares of preferred stock, at no par value per share, in one or more classes or series within a class as may be determined by our board of directors, who may establish, from time to time, the number of shares to be included in each class or series, may fix the designation, powers, preferences and rights of the shares of each such class or series and any qualifications, limitations or restrictions thereof. Any preferred stock so issued by the board of directors may rank senior to other existing classes of capital stock with respect to the payment of dividends or amounts upon liquidation, dissolution or winding up of us, or both. Moreover, while providing desirable flexibility in connection with possible acquisitions and other corporate purposes, under certain circumstances, the issuance of preferred stock or the existence of the unissued preferred stock might tend to discourage or render more difficult a merger or other change of control. Currently, no shares of our preferred stock have been designated any rights and we have no shares of preferred stock issued and outstanding.

Warrants

General. There are presently no outstanding warrants to purchase our securities. However, we are offering up to a total of 6,666,666 warrants for the purchase of our Common Stock.

Exercisability. The warrants are exercisable at any time after their original issuance and at any time up to the date that is five years after their original issuance. The warrants will be exercisable, at the option of each holder, in whole or in part by delivering to us a duly executed exercise notice and, at any time a registration statement registering the issuance of the shares of common stock underlying the warrants under the Securities Act is effective and available for the issuance of such shares, or an exemption from registration under the Securities Act is available for the issuance of such shares, by payment in full in immediately available funds for the number of shares of common stock purchased upon such exercise. If a registration statement registering the issuance of the shares of common stock underlying the warrants under the Securities Act is not effective or available and an exemption from registration under the Securities Act is not available for the issuance of such shares, the holder may, in its sole discretion, elect to exercise the warrant through a cashless exercise, in which case the holder would receive upon such exercise the net number of shares of Common Stock determined according to the formula set forth in the warrant. No fractional shares of common stock will be issued in connection with the exercise of a warrant. In lieu of fractional shares, we will pay the holder an amount in cash equal to the fractional amount multiplied by the exercise price.

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Exercise Limitation. A holder will not have the right to exercise any portion of the warrant if the holder (together with its affiliates) would beneficially own more than 4.99% of the outstanding Common Stock after exercise, as such percentage ownership is determined in accordance with the terms of the warrants, except that upon notice from the holder to us, the holder may waive such limitation up to a percentage, not in excess of 9.99% of the number of shares of our Common Stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the warrants.

Exercise Price. The exercise price per whole share of Common Stock purchasable upon exercise of the warrants is $5.7875 per share or 125% of the public offering price per Unit. The exercise price is subject to appropriate adjustment in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting our Common Stock and also upon any distributions of assets, including cash, stock or other property to our stockholders.

Transferability. Subject to applicable laws, the warrants may be offered for sale, sold, transferred or assigned without our consent.

Exchange Listing. We have applied for the listing of the warrants offered in this offering on the Exchange under the symbol “NOVS”. No assurance can be given that such listing will be approved or that a trading market will develop.

Warrant Agent. The warrants will be issued in registered form under a warrant agency agreement between VStock Transfer, LLC, as warrant agent, and us. The warrants shall initially be represented only by one or more global warrants deposited with the warrant agent, as custodian on behalf of The Depository Trust Company (DTC) and registered in the name of Cede & Co., a nominee of DTC, or as otherwise directed by DTC.

Fundamental Transactions. In the event of a fundamental transaction, as described in the warrants and generally including any reorganization, recapitalization or reclassification of our Common Stock, the sale, transfer or other disposition of all or substantially all of our properties or assets, our consolidation or merger with or into another person, the acquisition of more than 50% of our outstanding Common Stock, or any person or group becoming the beneficial owner of 50% of the voting power represented by our outstanding Common Stock, the holders of the warrants will be entitled to receive upon exercise of the warrants the kind and amount of securities, cash or other property that the holders would have received had they exercised the warrants immediately prior to such fundamental transaction.

Rights as a Stockholder. Except as otherwise provided in the warrants or by virtue of such holder’s ownership of shares of our Common Stock, the holder of a warrant does not have the rights or privileges of a holder of our Common Stock, including any voting rights, until the holder exercises the warrant.

Governing Law. The warrants and the warrant agency agreement are governed by New York law.

Options

At a board of directors (the “Board”) meeting held on June 12, 2021, the Board approved the following stock options to the officers and directors of the Company: (i) options for three directors to purchase 25,000 shares of common stock each at a strike price of $5.00 per share within five years from June 12, 2021, (ii) options for the Chief Executive Officer to buy 25,000 shares of common stock at a strike price of $5.00 per share within five years from June 12, 2021 and (iii) options for the Chairman of the Board to purchase 50,000 shares of common stock at a strike price of $5.00 per share within five years from June 12, 2021.

There are no other outstanding options to purchase our securities.

Transfer Agent and Registrar

Our Transfer Agent and Registrar is VStock Transfer, LLC, 18 Lafayette Place, Woodmere, New York 11598. Phone: (212) 828-8436.

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INFORMATION WITH RESPECT TO THE REGISTRANT

DESCRIPTION OF BUSINESS

Company Overview

The Company, sometimes referred to herein as "we," "us,” “our," and the "Company" and/or "Novusterra Inc.” was incorporated on September 21, 2020, in the State of Florida. Our fiscal year-end date is December 31. Our address is 561 NE 79th Street, Suite 325, Miami, FL 33138, our telephone number to 786-473-6233 and our website is www.novusterrainc.com.However, you should not consider any information on, or that can be accessed through, our website a part of this Registration Statement.

We began with the objective to build a Rare Earth Elements (“REE”) Processing Facility to process REE for commercial use. However, as approved by a Board of Directors meeting held on March 19, 2021, we changed our objective to developing Graphene since we discovered research illustrating that Graphene, similar to an REE, is a versatile commodity that could be helpful in solving major global problems with the potential for attractive earnings.

Our decision to begin the process of producing Graphene was made easier due to the relationship the Company’s management team has with ARC as a result of prior business activities. ARC through its wholly-owned subsidiary, ACM, signed the License Agreement with Ohio University to manufacture Graphene using carbon as a raw material using patented technology owned by Ohio University. The suite of patents was originally developed by Dr. Gerardine Botte, the current Whitacre Department Chair in Chemical Engineering at Texas Tech University, an independent board member of ARC and Chief Technical Officer of ACM. Dr. Botte developed and patented these technologies when she served as Ohio University's Distinguished Professor and Russ Professor of Chemical and Biomolecular Engineering.

The underlying License Agreement between Ohio University and ACM was effective on February 10, 2021. The term of the License Agreement runs from February 10, 2021, until such time as the last of the Patent Rights as identified in the License Agreement expires pursuant to federal patent law. The License Agreement allows ACM to utilize the patent rights and/or technology rights identified therein to facilitate the extraction, refinement and processing of Critical Elements, Rare Earth Elements and Graphene, as such terms are defined in the License Agreement. A copy of the License Agreement is included as an exhibit to this prospectus and each prospective investor is encouraged to thoroughly review the License Agreement.

The License Agreement requires, among other things, that ACM maintain a bona fide, funded, ongoing and active research, development, manufacturing, marketing and sales program to diligently make, offer for sale and sell Licensed Products so that Licensed Products are currently available to the public as soon as commercially practicable; and, fulfill various Diligence Milestone events identified in the License Agreement. The Diligence Milestones include developing a final design for a pilot facility to exploit the Licensed Product; completion of construction of the pilot facility; developing a final design for a commercial facility to exploit the Licensed Product; identifying feedstock material sources for the Licensed Product; completing construction of the commercial facility; obtaining the first commercial sale of product exploiting the Licensed Product; and obtaining net sales of a minimum of $1,000,000.00. The deadlines for these various Diligence Milestones run from January 1, 2022, through January 1, 2026.

Consideration for granting of the License Agreement consisted of a nonrefundable payment of $99,773. Additionally, the License Agreement provides for the payment of royalties in amounts ranging from 1.5% to 2% of Net Sales of the Licensed Products. The License Agreement also provides for payment of minimum royalties by ACM in amounts ranging from $7,500 beginning in calendar year 2025 up to $125,000 beginning in calendar year 2027 and predicated upon the three Fields of Use involving Critical Elements, Rare Earth Elements and Graphene.

The License Agreement also provides that ACM shall pay all costs and expenses associated with the Patent Rights within 30 days after receipt of each invoice by ACM. The licensor may also require ACM to prepay costs and expenses predicated for certain Patent Rights upon written request by the licensor. The failure of ACM to make any required payment shall be considered a payment default under the terms of the License Agreement.

On March 31, 2021, we signed the Sublicense Agreement with ARC that provides us with a nonexclusive sublicense from ARC of certain patents ARC has licensed from Ohio University pursuant to the License Agreement relating to the manufacture of Graphene using coal byproducts. Pursuant to such agreement, we agreed to raise funds via an initial public offering in order to build a manufacturing facility to produce and market Graphene commercially. The agreement with ARC provides that the Company and ARC are each entitled to receive fifty percent (50%) of the operating profits from our Graphene manufacturing and marketing business. This profit-sharing arrangement is limited to only the operating profits from the Graphene factory using the rights provided by the Sublicense and will not apply to any other activities in which the Company may engage in the future, including the production of Graphene using any other technology. Hence the Company has been researching alternative methods to produce Graphene. The Company also plans to look into acquiring companies that use or can use Graphene as raw material for other applications. As part of the above two agreements, Andrew Weeraratne was replaced by Mark Jensen, the Chief Executive Officer and the Chairman of the Board of ARC, as the Chairman of the Company’s Board of Directors.

As approved at a special shareholders meeting attended by major shareholders on March 19, 2021, we signed an agreement with ARC on March 31, 2021, to issue ARC 10,000,000 shares of Class B common stock (with 10 votes each) plus 5,700,000 shares of Class A common stock (with one vote each) of the Company, comprising 51.14% of total shares giving 87.57% of voting power to ARC, who plans to distribute such shares to ARC’s shareholders as stock dividends after the completion of this offering. At a special shareholders meeting held on April 4, 2021, attended by majority of shareholders, including ARC, the Company voted to eliminate the Class B shares and increase the Class A shares by the number of Class B shares then outstanding, and designate the Class A shares as “Common Shares.”. Further, at a special stockholders meeting held on April 16, 2021 attended by a majority of shareholders, the Company voted to effectuate a one-for-three (1:3) reverse stock split, which became effective as of April 16, 2021. As a consequence of eliminating the Class B shares on April 4, 2021, as of March 16, 2022 ARC holds 5,233,333 Class A common shares, or 49.92% of the Company’s voting stock, and Andrew Weeraratne holds 4,173,150 common shares, or 39.81% of the Company’s voting stock, based on 10,482,424 common shares outstanding.

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Business Opportunity

According to Nanografi Nanotechnology AS (“Nanografi”), a producer and supplier of nano and micro particles such as Graphene, Fullerene, Carbon Nanotubes as well as 3D printer materials, discussed herein are additional potential applications of Graphene (Please note Nanografi claims these are only for information purposes, and not to be used as medical or technical advice).²

Graphene in Solar Cells

The idea of developing lighter, flexible and transparent solar cells has been around for a while but finding a material which has all the necessary properties and is able to carry the current posed an issue. Indium Tin Oxide (“ITO”) has been used because it is transparent, however it is not flexible, meaning the cell had to remain stiff.

According to Nanografi, in 2017, researchers from MIT managed to apply Graphene successfully on a solar cell. When they compared the Graphene solar cell with others made of Aluminum and ITO, they saw that it was as good as the ITO cell, but a little worse than Aluminum cell in terms of current densities and power conversion efficiencies. However, it is expected for a transparent cell to perform lower than Aluminum-based cells, which are nontransparent. Although electrical properties were not a breakthrough, a solar cell that can be installed on any kind of surface (cars, clothes, paper, cell phones, etc.) which is flexible and transparent was developed. Moreover, other scientists are trying to determine if Graphene solar cells can generate energy from raindrops, which theoretically appears as if it may be possible.

Graphene in Thermoelectric

The Seebeck effect is defined as the thermoelectric effect occurring when heat is applied to one of the two dissimilar electric conductors (or semiconductors) to move the electrons from the hot part to the cooler part of an electric conductor and produce electricity. However, the energy generated by this method is very small, usually quantified by microvolts. Still, it is believed that it can be used to benefit from the heat generated by the engines, which is practically wasted. Graphene can be used to increase the Seebeck effect created by Strontium Titanate, almost up to 5 times.

Graphene in Fuel Cells

Even hydrogen atoms, known as the smallest atom, cannot pass through Graphene. In other research, Sir Andre Geim and his team have tested whether or not protons would be blocked by Graphene. Surprisingly, it has been shown that protons can pass through Graphene. This property would improve fuel cell performance by lowering the fuel crossover, which is a major problem with fuel cells that decreases durability and efficiency.

Graphene in Drug Delivery

In cancer patients, functionalized Graphene can be used to carry chemotherapy drugs to tumors. Graphene based carriers targeted cancer cells better and reduced and decreased toxicity of the effected healthy cells. However, drug delivery is not limited to cancer treatment. Anti-inflammatory drugs have also been carried by Graphene & chitosan combinations and yielded promising results.

Graphene in Diabetes Monitoring

Scientists from the University of Bath have developed a blood glucose monitoring test which does not pierce the skin, unlike currently finger prick tests. This patch, including a Graphene sensor, is able to work on a small area containing at least one hair follicle. It detects the glucose by pulling it from the fluid present between the cells. This does not only end the painful methods of blood sugar monitoring, but is also expected to increase the accuracy of results.

Graphene in Dialysis

Graphene membranes are not only useful for the energy, nuclear and food industries. A group of researchers from MIT showed that Graphene can be used to filter blood from various types of waste, drugs and chemicals. Graphene’s superiority in this function lies in the fact that it is 20 times thinner than traditional membranes, which leads to significant decrease in the time spent in the dialysis for the patients.

Graphene in Bone and Teeth Implantation

Hydroxyapatite, a form of calcium apatite, is a material used as a synthetic bone substitute for regenerated bone and dental tissues. Graphene, when combined with Hydroxyapatite and Chitosan, has shown increases in the strength, corrosion resistance, flexibility and mechanical & osteogenic properties of synthetic bone substitutes.

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²  See 60 Uses of Graphene—The Ultimate Guide to Graphene (Potential) Applications 2019 (https://nanografi.com/blog/60-uses-of-Graphene/).

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Graphene in Body Scans

Unlike X-rays, T-waves can be used for body scanning and are harmless to the human body. However, T-waves, or THZ radiation, are hard to both detect and to generate.³ However, with the help of certain modifications and other materials, CVD Graphene can detect THZ radiation successfully. This has the potential to lead to safer body scans in the future.

Graphene in Waterproof Electronics

One of the main problems with electronic devices is people’s fear of dropping them in water and damaging the device. Instead of covering the device with tight-fitted screws, Graphene presents a solution to this problem. Engineers from Iowa State University have printed circuits for electronic devices with Graphene flakes because Graphene is transparent, strong and conducts electricity. The Graphene flakes are arranged in a specific order and non-conductive binders are used to combine them, which improves their conductivity.

Graphene in Elastic Robots

A team of researchers has developed a gel that is sensitive to near infrared light so that it can be used in numerous applications when creating flexible or elastic robotic parts. The snake-like robots created using this method are able to change form without any external forces. Future applications for such robots can vary from search-and-rescue to medical operations.

Graphene in Food Packaging

Graphene can also be used as a coating material because it prevents the transfer of water and oxygen. Graphene membranes can be used in food and pharmaceutical packaging to keep food and medicines fresh for longer periods of time. This has the potential to dramatically reduce the amount of food waste created each day.

Graphene in Water Purification

Normally, water purification is not a simple process and its feasibility depends on how heavily the water is contaminated. An Australian scientist has found a low-cost technique to purify water in one step. Soybean-based Graphene, which is also called ‘GrapHair’, is used as a filter. This filter can make the dirtiest water drinkable and it is more efficient, cheaper and environmentally friendly as compared to other methods.

Graphene in Desalination

Approximately 97.5% of the total water present on the planet is salinized. Regardless of how many wells are excavated, only 2.5% of the planet’s total water is fresh water. Mesh-based water filters using Graphene have yielded amazing results. The University of Manchester employed Graphene to make a higher density filtering sieve that permits water particles, but not salt, to pass through.

Graphene in Shoes

It is claimed that a sole made of pure Graphene can last hundreds of years. The University of Manchester and sports brand Inov-8 developed a shoe using Graphene which increases the outsoles’ strength and flexibility properties by 50%. These shoes are more durable and absorbs the impacts which could damage the bones and joints.

Graphene in Speakers and Headphones

A speaker converts electricity into sound by vibrating a membrane in the air. Graphene is used to make lightweight and great rigidity membranes. Moreover, headphones use a small diaphragm reinforced with Graphene. GrapheneQ, a headphone developed by the company ORA Sound, is lighter and smaller, and at the same time, can produce louder and higher quality sounds with less energy.

Graphene in Airplanes

Scientists from the United Kingdom have designed an airplane that includes Graphene in the carbon-fiber coating of the aircraft’s wings. The model plane, Prospero, is lighter since it was sufficient to cover the wings with only one layer of the improved composite. Prospero consumes less fuel, resists impact better, and has lower environmental costs as well.

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³  See   https://www.cancertherapyadvisor.com/.

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Graphene in Radiation Shielding

Scientists have been attempting to minimize radiation since its danger to human health was uncovered. A variety of materials have been used as a shield from radiation, but there are many parameters that impact the efficiency of shielding. Graphene is known as a weak radiation absorber, but scientists have found that it can be a great shielding material when it is used in multi-layered Graphene slab form. Graphene is a promising material for this purpose thanks to its low manufacturing cost, light weight and high efficiency compared to other shielding materials.

Sources of Revenue

We anticipate our source of revenue to be derived from the manufacturing and sale of Graphene.

Capital Requirements

We plan to use part of the proceeds from this offering to pay for the expenses of building a manufacturing plant to make Graphene from coal byproducts, for which we have sublicensed patented technology from ARC. In order to manufacture and market Graphene using the technology we have sublicensed from ARC, we have signed a lease agreement with ARC to lease land and a building ARC owns in Kentucky to build our Graphene manufacturing factory, with such lease payments to be paid after we have received the proceeds from this offering. We estimate that we will require approximately $4,000,000 of capital to build a manufacturing plant to make Graphene, which we anticipate will take 12 months to build. Once we have received the proceeds from this offering, we plan to hire experts in the Graphene industry to help us select, buy and install the necessary equipment to begin the process of producing Graphene from Carbon.

Graphene Production Process

“Hindawi,” an online research portal, explains the two primary production methods of Graphene as follows.⁴

Top-Down Production Process

Top-down approaches commence with an existing form of the bulk material and process it to create the final product. This approach may be cost efficient, depending on the material used. In general, it is limited to a lab scale and has limited quality control. In this approach, Graphene or altered Graphene sheets are produced by either separation, peeling, cleaving, or exfoliation of graphite or its derivatives (graphite oxide (“GO”) and graphite fluoride (“GF”)). Researchers have been successful in fabricating a few layers of free-standing Graphene sheets on both micro- and nanoscales. However, since this approach involves great investment and produces relatively low yields, the need remains for mass scaled-up processes to address the needs of industries economically. Various mechanical processes have been involved in producing high-quality, defect-free Graphene: mechanical exfoliation of graphite, sonication, functionalization, electrochemical exfoliation, super acid dissolution of graphite, alkylation of Graphene derivatives, chemical reduction of aqueous/organically treated GO, thermal exfoliation, and chemical reduction of GO. A detailed account of synthesis of Graphene by the exfoliation method, functionalization, and reduction along with its utilization in the fabrication of nanocomposites has been extensively reviewed by Potts et al. (2011)⁵, providing thorough insight into the procedures followed by various authors. Similarly, Daniel et al. (2012)⁶ reviewed and extensively outlined the synthesis of Graphene from various sources using several similar approaches.

The Bottom-up Production Process

The bottom-up approach consists of standard techniques such as epitaxial growth using metallic substrates by means of CVD (defined below) or organic synthesis, which depend on the choice of precursor chemicals and thermal degradation and decomposition. Several other processes, such as arc discharge, chemical conversion (“CO”) reduction, Carbon nanotubes (“CNT”) unzipping and self-organization of surfactants have also been tried for synthesis of Graphene and its derivatives. Of all these processes, CVD and epitaxial growth, which produce bantam quantities of flawless Graphene sheets with larger size, may in the future be attractive for mass-scale Graphene production, in contrast to mechanical cleaving. Using CVD and epitaxial methods, Graphene sheets find their way into fundamental research with a multitude of applications, ranging from electronics to polymeric nanocomposites. Also, production of large quantities of Graphene sheets is dependent on the chemical precursors used during synthesis. In particular, GO, chemically reduced graphite (“CRG”), and thermally reduced graphite (“TRG”) are ideal candidates for polymer nanocomposite applications. In the bottom-up approach, as discussed earlier, the small molecule chemicals and catalysts are determining factors for the specific control of morphology, crystallinity, and structure of Graphene. There are several accounts of using hydrocarbons as the source of Graphene production and using metal catalysts through the CVD process. Currently, a Nickel surface is considered the best template for deposition of Graphene due to the small variance in its lattice heterogeneity. The control and stability in the Graphene scale are potentially high, which makes CVD the most appealing method for device assembly and fabrication. Nevertheless, this method faces a major challenge in the control of edge structure and topology. Epitaxial growth of Graphene on a substrate is another common technique, in which decomposition results in the formation of Graphene layers. The silicon is desorbed off the surface leaving highly pure defect-free Graphene sheets. This process has several advantages, including (i) there is no transition or transportation of the resulting material from the metal substrate to the dielectric-type substrate; (ii) the resultant Graphene film is free from impurities; and (iii) controlled initiation and growth of the product can be tailored through the correct choice of substrate. Recently, self-assembly processes, such as layer-by-layer assembly (LLB), have been extensively employed to fabricate nanocomposite thin films using Graphene. The resulting composite structure is expected to have well-aligned components. Though the bottom-up approach to Graphene synthesis presents less defects compared to the top-down approach, the operation and procedures are much more difficult and expensive, making it challenging to realize mass production for practical applications. Still, the most commonly chosen route of Graphene synthesis is a bottom-up strategy because it offers incredible possibilities to tailor the atomic size, composition, shape, stability, and edge structure in Graphene. Researchers around the globe are making strong efforts to develop a reliable strategy to produce defect-free, high functional quality and large quantity Graphene using synthetic and processing protocols compatible with standard fabrication procedures at low cost.

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⁴ See A Comprehensive Review of Graphene Nanocomposites: Research Status and Trends, Vivek Dhand, Kyong Yop Rhee, Hyun Ju Kim, and Dong Ho Jung (December 2013). 

⁵ See Graphene-based Polymer Nanocomposites, J. R. Potts, D. R. Dreyer, C. W. Bielawski, and R. S. Ruoff, Polymer, vol. 52, no. 1, pp. 5–25, 2011.

⁶ See Experimental Review of Graphene, R. C. Daniel, D. A. Benjamin, G. Nageswara et al., ISRN Condensed Matter Physics, vol. 2012, Article ID 501686, 2012.

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Research on Production Methods

According to an article entitled “Mass-Producing Graphene” by Les Johnson and Joseph E. Means published in American Scientist, a bimonthly publication about science, engineering, and technology, it may be easy to isolate little flakes of this one-atom-thick carbon material (Graphene) but it is surprisingly difficult to produce large sheets for commercial use.⁷

The article further states that Graphene is elegant. It is created from a single element, carbon, formed by just one type of bond. Despite Graphene’s apparent simplicity, isolating the material was elusive for chemists and physicists alike. Graphene excels at hiding in plain sight, and the techniques and instrumentation perfected in the last two decades have played a pivotal role in its discovery. The sole constituent of Graphene is Carbon, which is the fourth most common element in the universe. All materials are made of atoms and molecules, but with Graphene, counting carbon atoms is immaterial since what matters is the way in which constituent carbons are bound to one another. It is with this feature that Graphene is separated from other wholly carbon materials such as diamonds and graphite.

Early methods of manufacturing have been too simplistic and time consuming, making them only good for lab results. One technology being studied is Additive Manufacturing (“AM”), more commonly known as 3D printing. Many early generation AM devices used only plastic to make interesting 3D renditions of various objects, but the technology has grown significantly more capable.

The article notes that researchers at Rutgers University are making sheets of Graphene out of ordinary graphite flakes and some sulfuric or nitric acid. The addition of the acid oxidizes the Graphene sheets that make up the graphite and forcing oxygen atoms between the sheets of Graphene causes them to split apart, forming Graphene oxide sheets suspended in acid and water. Next, the liquid is filtered out, leaving flakes of Graphene oxide to clog up the filter. The sum of all the clogs across the filter eventually makes up a paper-like sheet of Graphene oxide. This paper-like sheet can then be removed from the filter by dissolving the filter away using a solvent that does not react with Graphene oxide. The last step is to remove the oxygen, which is done using hydrazine, leaving only a pure Graphene coating. The resulting material is called reduced Graphene oxide (“RGO”). In this instance, “reduced” refers to a chemical use of the word, where the oxidation state of each Graphene carbon has been decreased through the removal of the oxygen by hydrazine. Hydrazine is a reducing agent, which is oxidized by its reaction with the Graphene oxide.

Methane, a carbon-rich gaseous compound, can be reacted with copper at high temperatures to produce Graphene. Simply heating the copper to about 1,000 degrees Celsius and exposing it to the methane gas results in the formation of layers of Graphene on the copper’s surface from the plentiful carbon atoms in the methane gas, a process called chemical vapor deposition (“CVD”). There are two primary problems with this method: (i) it takes a long time to produce even a small amount of Graphene and (ii) the resulting Graphene is of low quality.

For an alternative production method, Jonathan Coleman of Trinity College, Dublin, and his team put graphite in a blender and added an over-the-counter dishwashing liquid. With only a little more processing required to separate the newly formed Graphene sheets, Coleman and his colleagues found that they could produce several hundred grams per hour using a fairly modest set of mixing equipment in a 10,000-liter vat. However, the article states that it remains unclear whether this method can provide high-quality Graphene.

At the moment, NASA is researching ways to process waste carbon dioxide from astronauts’ breath on the International Space Station into Graphene. This improvement to the life-support system would have a twofold bonus. A waste material such as carbon dioxide otherwise requires sequestration with special chemicals that need to be shipped up with special deliveries from Earth. Accordingly, processing carbon dioxide into Graphene would mean that fewer resupply missions would be necessary.

Proposed Initial Graphene Processing Facility

We plan to lease for $5,000 per month land and a building with approximately 40,000 square feet located at 1845 KY-15, Hazard, KY 41701, owned by Perry County Resources which is an affiliated company of ARC. Following are the features of the location:

● 40,000 square foot (3,716 square meter) facility to house the technology, located in Hazard, Kentucky;

● Significant additional developable area for expansion needs;

● Fully connected to industrial power grid and utilities; and

● Located adjacent to an operating coal processing facility, allowing for consistent and abundant feedstock and established infrastructure and resources.

With existing processing and coal fine separation facilities, along with consistent feedstock, this Graphene production facility has all the components required for testing and producing commercial-grade Graphene and REE / critical element concentrate, including (i) an underground mine providing consistent production and feedstock to Graphene production and (ii) a coal preparation plant with fine coal production and a segregated Graphene processing facility. We have entered into an agreement with ARC pursuant to which ARC has agreed to sell us carbon at a 5% discount to the market price.

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7  See     https://www.americanscientist.org/article/mass-producing-Graphene.

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Intellectual Property

We believe that our intellectual property, consisting primarily of patents and proprietary know-how, for which we have been given a non-exclusive Sublicense, provides us with competitive advantages and is important to our growth opportunities. We have obtained this Sublicense to manufacture Graphene using carbon as raw material from ARC, which holds the License Agreement to such technology through one of its wholly owned subsidiaries, ACM. The patented technology is owned by Ohio University. The suite of patents was originally developed by Dr. Gerardine Botte, the current Whitacre Department Chair in Chemical Engineering at Texas Tech University, an independent board member of American Resources Corporation and Chief Technical Officer of Advanced Carbon Materials, a subsidiary of American Resources Corporation. Dr. Botte developed and patented these technologies when she served as Ohio University's Distinguished Professor and Russ Professor of Chemical and Biomolecular Engineering.

Pursuant to ARC’s License Agreement with Ohio University, ARC has the exclusive domestic rights, and the exclusive option on international rights, for the following patents:

● Coal Electrolysis: Hydrogen, Liquid Fuels, and Carbon Nanotubes Production;

● Simultaneous Removal of Ammonia, Urea, and Metals from Water;

● Methods for the Synthesis of Graphene from Coal, Carbon Chars, and Carbon Solid Sources; and

● Roll-to-Roll Transfer of Graphene and Substrate Recovery.

The Sublicense gives us non-exclusive rights to commercially produce Graphene using Carbon and coal byproducts using this patented technology. This patent is to produce Graphene from the byproducts formed during electrolysis of coal. These byproducts may be electrolyzed coal particles, gelatinous film formed on the electrolyzed coal particles, or the electrolyzed coal particles together with the gelatinous film. The electrolyzed coal byproduct is deposited as a thin layer onto a surface, or carrier substrate, which is heated to a temperature effective to form graphite while a reductant gas, such as hydrogen, flows over the heated coal product. The reductant gas flow carries the carbon particles and deposits them onto a surface, forming a layer of Graphene thereon. The premise of this invention is that Graphene can be made inexpensively using coal byproduct. More particularly that char, which is the byproduct of electrolysis of an aqueous coal slurry, can be used to form Graphene.

We rely on patent, trademark, copyright and trade secret laws, as well as appropriate agreements to protect our intellectual property. Among other things, we seek to protect our proprietary know-how and information, by requiring employees, consultants, strategic partners and others who have access to such proprietary information and know-how to enter into confidentiality or restricted use agreements.

Regulatory Matters

Environmental

Our facilities and operations may be subject to a wide variety of federal, state, local and foreign environmental laws and regulations. These laws and regulations relate to air emissions, water discharges and solid and hazardous waste generation, treatment, storage, handling, transportation and disposal; the presence of wastes and other substances; the reporting of, responses to and liability for, releases of hazardous substances into the environment; and the import, production, packaging, labeling and transportation of products that are defined as hazardous or toxic or otherwise believed to have potential to harm the environment or human health. These laws and regulations (and the enforcement thereof) are periodically updated and are becoming increasingly stringent. Our joint venture partner, ARC, has incurred substantial costs in the past and will continue to incur additional costs in the future, to comply with these legal requirements. To our knowledge, ARC is in compliance with all federal and state statutes and regulations at the site that has been leased to us to build our Graphene manufacturing factory.

We believe that we are able to comply in all material respects with the federal, state, local and foreign environmental laws and regulations to which we are subject. Our joint venture partner, ARC, has experienced some level of regulatory scrutiny and, in some cases, has been required to take or are continuing to take corrective or remedial actions and incur related costs, and may experience further regulatory scrutiny, and may be required to take further corrective or remedial actions and incur additional costs, in the future. Although it has not been the case in the past, these costs could have a material adverse effect on us in the future.

International accords, foreign laws and regulations, and U.S. federal, state and local laws and regulations have been enacted to address concerns about the effects that CO2 emissions and other identified Green House Gases ("GHGs") may have on the environment and climate worldwide. These effects are widely referred to as climate change. The international community has taken actions to address climate change issues on a global basis. In particular, in December 2015, the 21st Conference of Parties for the UNFCC concluded with more than 190 countries adopting the Paris Agreement, which then came into force and was legally binding on the parties in November 2016. The Paris Agreement sets a goal of limiting the increase in global average temperature and consists of two elements: a legally binding commitment by each participating country to set an emissions reduction target, referred to as “nationally determined contributions” (“NDCs”), with a review of the NDCs that could lead to updates and enhancements every five years beginning in 2023, and a transparency commitment requiring participating countries to disclose in full their progress.

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In the EU, the ETS, which was initially enacted under the provisions of the 1997 Kyoto Protocol, requires certain listed energy-intensive industries to participate in an international “cap and trade” system of GHG emission allowances. A third phase of the EU ETS under Directive 2009/29/EC, covers the period from 2013 to 2020 and instituted a number of program changes. EU Member States brought into force the necessary laws, regulations and administrative provisions to comply with this EU Directive. Carbon and graphite manufacturing is still not a covered industry sector in the revised Annex 1 of directive 2009/29/EC. On November 9, 2017, to implement the EU’s NDC under the Paris Agreement and other GHG commitments, the European Parliament and Council announced a provisional agreement to revise and make more stringent the ETS during the Phase 4 period of 2021 to 2030. Among other changes, the Phase 4 provisions would further accelerate reduction in the current oversupply of allowances in the ETS market and establish further protections against the risks of carbon leakage. After extensive negotiations, the European Parliament and the Council formally supported the revision in February 2018. The revised EU ETS Directive (Directive (EU) 2018/410) entered into force on April 8, 2018. The EU’s current target for 2030 is to achieve a GHG reduction of at least 40% compared to 1990 levels. In addition, in December 2019, the European Commission presented the Communication on The European Green Deal announcing several upcoming legislative proposals for the EU 2050 climate neutrality objective and for increasing the EU 2030 GHG emissions reduction target to at least 50% and towards 55% compared to 1990 levels.

Future Trends

Mazdak Taghioskoui, a member of the Department of Electrical and Computer Engineering at George Washington University, writes that the limits of silicon’s capabilities are being reached. Coincidently, the discovery of Graphene with its unique nano-scale properties is paving the way for possible substitutes to be used in the next generation of faster and smaller electronics in 21st Century.⁸ As a result of the promising properties of Graphene, research in the field is attracting large grants and sponsors, with an incremental rise in the number of academic papers. Taghioskoui writes that in 2004, the feasibility of isolating a single layer of graphite with a thickness of one-atom, so-called Graphene, was experimentally demonstrated by mechanical exfoliation of graphite, which is considered a breakthrough in the nanotechnology era, bringing the concept of single atomic components closer to reality.

The article notes that Carbon is the sixth element of the periodic table and the first element of the Group 14. Diamond and Graphite are the most famous allotropes of Carbon, which have long histories of many applications due to their hardness and softness, respectively. Carbon can also generate long chains, so-called catenation, resulting in the formation of diverse organic compounds, including biomolecules. The next congener to Carbon in Group 14 is silicon, with the same valance band electronic structure. In contrast to Carbon, silicon does not catenate as readily.

The small size of Carbon and its electronic structure make Carbon an exceptional element capable of producing versatile structures with appealing properties. Having the title of the strongest material ever measured, Graphene is a two-dimensional (one-atom-thick) allotrope of carbon with a planar honeycomb lattice. It is regarded as the basic building-block of carbon nanotubes and large fullerenes. The properties of carbon nanotubes originate from Graphene sheets. Despite the fact that Graphene was discovered somewhat recently, its potential exploitation can be foreseen in many fields, ranging from hydrogen storage devices to batteries. A revolutionary application of Graphene might also be in electronics. Graphene has the potential to enable faster and smaller transistors consuming less energy and dissipating heat faster than comparable silicon-based devices.

Other applications of Graphene, according to Taghioskoui, include fabrication of chemical sensors and transparent conducting films for solar cells and liquid crystal devices. Graphene-based chemical sensors have been applied to detect gaseous molecules, such as nitrogen dioxide and ammonia. They have shown superior sensitivities capable of detecting single molecules. Chemically modified Graphene sheets have been used to fabricate single bacterium biodevices and label-free DNA sensors. The high surface-to-mass ratio of Graphene makes it suitable for ultracapacitors and batteries. Composite materials requiring high strength can be made from Graphene. Graphene also shows great promise in handling terahertz frequency signals. It might be a possible material for filling the “terahertz gap.” This provides a bridge for moving from where silicon is currently at gigahertz to higher frequencies required in photonics.

The article did however cite certain challenges related to the production and commercialization of Graphene as well.

For one, how long will it take to see the first generation of Graphene-based electronics in the market? That is the most fundamental question, which one may ask after learning the promising properties that Graphene offers. Despite the fact that scientific results show superb advantages of Graphene for faster electronics, the technology is still immature. Only preliminary steps have been taken, and there is still a long way to go for possible exploitation of Graphene-based commercial products.

The most essential technological challenge that Graphene faces is the hurdle of controlled production of large sheets. Solving the dilemma of mass-producing high quality Graphene sheets is the main focus in the field. This would be the first step towards commercially available Graphene-based electronic devices. Several approaches have been utilized to produce Graphene sheets, but still there remains the question of robustness and reproducibility of the methods. Considering the current infrastructure of the semiconductor industry, electronics technology is very dependent on silicon. Any approach should be able to adapt itself to the current silicon-based technology.

Patentability of the discoveries in Graphene research is another core issue. Many patents are being filed to address the novel methods in production and novel approaches for applications. The “obviousness” of structural similarity between Carbon nanotubes and Graphene is of immense concern, since Carbon nanotubes might be considered as “prior art” against Graphene in the patent application. Almost all of the candidate materials for the post-silicon era have failed. Graphene still remains at the stage of uncertainty, so more research is required to determine if Graphene might be a substitute for silicon.

_______________________

⁸ See Trends in Graphene Research, Mazdak Taghioskoui, Science Direct (December 2009) (https://www.sciencedirect.com/science/article/pii/S1369702109702743).

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Operating Strategy

We plan to use the funds we receive from this offering to build a manufacturing plant to begin the commercial production of Graphene from coal byproducts using the patented technology that we have sublicensed form ARC. We hope to sell Graphene to major manufacturers, as well as acquire synergistic manufacturing businesses that would benefit from our production of Graphene.

Marketing Strategy

According to Grand View Research, an India & U.S. based market research and consulting company,⁹ the global Graphene market size is anticipated to reach $1.08 billion by 2027, exhibiting a revenue based CAGR of 38.7% over the forecast period. Rise in awareness regarding the superior characteristics of Graphene, such as excellent electrical conductivity and heat resistance, is expected to aid the growth.

We are focused on producing the raw product while building sales channels through our relationships in the battery and water filtration market. Upon commercialization, we will further refine our sales channels to produce specific outputs based on customer demand. ARC has had numerous discussions within its sales channel focusing on current collaboration partners for commercial uses in the future, however, there is no assurance that any such collaborations will come to fruition.

Competition

According to the research we have performed, there are no public companies that are focused solely on producing Graphene. This may be due to the novelty of Graphene in the commercial market, especially in commercial production. There are a few private companies that claim to produce and sell Graphene, but we did not come across sufficient information to establish their production capacity or potential. It is possible such private companies may become our competitors. There are also major global innovators and producers in the Carbon and Coke industry such as Phillips, Seadrift, Petrocokes Japan and JX Nippon who may set up their own divisions to make Graphene in the near future or may already have formed such divisions. In addition, companies in China and India that dominate Graphite production market may begin their own Graphene divisions.

According to one article,¹⁰ companies such as IBM (NYSE:IBM), Samsung and Nokia (NYSE:NOK) are rushing to tap the incredible properties of Graphene. In 2011, IBM was the first company to use the material to create Graphene-based integrated circuits, having created in 2010 a Graphene processor that could execute 100 billion cycles per second (100GHz). Intel and Samsung are now looking into Graphene-based processors, while Nokia is part of a consortium of 74 companies that received a grant of $1.35 billion from the European Union to determine how to use Graphene to "improve the world." This consortium is experimenting in electronics and mobile communications. The Motely Fool adds that perhaps a better route to understand Graphene is to look at producers of graphite, as that is the material from which Graphene is made. Unfortunately, most of the mineral is produced in China. It produces some 800,000 metric tonnes annually, with the next closest producer being India at 130,000 metric tonnes. Graphite is not mined in the United States.

According to the article, GrafTech International (NYSE:GTI.DL) is the leading producer of graphite electrodes and was one of the top 20 Graphene patent holders at one time, ahead of such giants as General Electric Company (NYSE:GE) and Bayer. According to its Quarterly Report on Form 10-Q for the quarter ending March 31, 2020, filed with the SEC on March 6, 2020, GrafTech International notes that it “is a leading manufacturer of high-quality graphite electrode products essential to the production of electric arc furnace ("EAF") steel and other ferrous and non-ferrous metals. We believe that we have the most competitive portfolio of low-cost ultra-high power (“UHP”) graphite electrode manufacturing facilities in the industry, including three of the highest capacity facilities in the world. We are the only large scale graphite electrode producer that is substantially vertically integrated into petroleum needle coke, a key raw material for graphite electrode manufacturing.”

Another international company that is expanding into Graphene is Germany-based Aixtron SE (NASDAQ:AIXG). In its Report of a Foreign issuer on Form 6-K filed with the SEC on August 11, 2016, it wrote: "One focus of AIXTRON's [research] involves researching processes and systems technology for the deposition of optically active 2D semiconductor materials such as ... Graphene ... AIXTRON offers a Plasma Enhanced Chemical Vapor Phase Deposition ('PECVD') technology ... employed for the deposition of complex Carbon Nanostructures (Carbon Nanotubes, Nanowires or Graphene)."

It is possible that the above enterprises have more resources than we do and thus make it hard for us to compete with them.

Employees

As of March 16, 2022 we have two full-time employee and two part-time employee. We plan to hire additional full-time employees upon the completion of this offering.

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⁹ See Graphene Market Size Worth $1.08 Billion By 2027 | CAGR: 38.7% (March 2020) (https://www.grandviewresearch.com/press-release/global-Graphene-market).

¹⁰ See Harnessing the Superpowers of Graphene, Rich Duprey, The Motley Fool (April 7, 2013) (https://www.fool.com/investing/general/2013/04/07/Graphene-the-miracle- substance.aspx).

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DESCRIPTION OF PROPERTY

Our Offices

Our offices are located at 561 NE 79th Street, Suite 325, Miami, FL 33138 and our telephone number is 786-473-6233.

LEGAL PROCEEDINGS

We are currently not involved in litigation that we believe will have a materially adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self- regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries threatened against or affecting our company, our common stock, any of our subsidiaries or of our company’s or our company’s subsidiaries’ officers or directors in their capacities as such, in which an adverse decision is expected to have a material adverse effect

WHERE COMMON STOCK IS BEING OFFERED AND MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Exchange Listing

There is presently no public market for our shares of common stock or warrants. It is currently estimated that the combined initial public offering price per Unit will be between $4.13 and $5.13. We have applied to list our common stock and warrants on the Exchange under the symbol “NOVS” and “NOVSW,” respectively.

Holders

As of March 16, 2022, the Company had 49 shareholders of its common stock.

Dividends

We have never paid cash dividends on our Common Stock. Payment of dividends will be within the sole discretion of our board of directors and will depend, among other factors, upon our earnings, capital requirements and our operating and financial condition. In addition, under Florida law, we may declare and pay dividends on our common stock either out of our surplus, as defined in the relevant Florida statutes, or if there is no such surplus, out of our net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year. If, however, the capital of our company, computed in accordance with the relevant Florida statutes, has been diminished by depreciation in the value of our property, or by losses, or otherwise, to an amount less than the aggregate amount of the capital represented by the issued and outstanding stock of all classes having a preference upon the distribution of assets, we are prohibited from declaring and paying out of such net profits any dividends upon any shares of our capital stock until the deficiency in the amount of capital represented by the issued and outstanding stock of all classes having a preference upon the distribution of assets shall have been repaired.

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

THE FOLLOWING DISCUSSION OF OUR PLAN OF OPERATION SHOULD BE READ IN CONJUNCTION WITH THE FINANCIAL STATEMENTS AND RELATED NOTES TO THE FINANCIAL STATEMENTS INCLUDED ELSEWHERE IN THIS REGISTRATION STATEMENT. THIS DISCUSSION CONTAINS FORWARD-LOOKING STATEMENTS THAT RELATE TO FUTURE EVENTS OR OUR FUTURE FINANCIAL PERFORMANCE. THESE STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS THAT MAY CAUSE OUR ACTUAL RESULTS, LEVELS OF ACTIVITY, PERFORMANCE OR ACHIEVEMENTS TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, LEVELS OF ACTIVITY, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY THESE FORWARD-LOOKING STATEMENTS. THESE RISKS AND OTHER FACTORS INCLUDE, AMONG OTHERS, THOSE LISTED UNDER “FORWARD-LOOKING STATEMENTS” AND “RISK FACTORS” AND THOSE INCLUDED ELSEWHERE IN THIS REGISTRATION STATEMENT.

Overview

The Company, sometimes referred to herein as "we," "us,” “our," and the "Company" and/or "Novusterra Inc.” was incorporated on September 21, 2020, in the State of Florida. Our fiscal year-end date is December 31. Our address is 561 NE 79th Street, Suite 325, Miami, FL 33138, our telephone number to 786-473-6233 and our website is www.novusterrainc.com. However, you should not consider any information on, or that can be accessed through, our website a part of this Registration Statement.

We began with the objective to build a Rare Earth Elements (“REE”) Processing Facility to process REE for commercial use. However, as approved by a Board of Directors meeting held on March 19, 2021, we changed our objective to developing Graphene since we discovered research illustrating that Graphene, similar to an REE, is a versatile commodity that could be helpful in solving major global problems with the potential for attractive earnings.

Our decision to begin the process of producing Graphene was made easier due to the relationship the Company’s management team has with ARC as a result of prior business activities. ARC, through its wholly-owned subsidiary, ACM, signed the License Agreement with Ohio University to manufacture Graphene using carbon as a raw material using patented technology owned by Ohio University. The suite of patents was originally developed by Dr. Gerardine Botte, the current Whitacre Department Chair in Chemical Engineering at Texas Tech University, an independent board member of ARC and Chief Technical Officer of ACM. Dr. Botte developed and patented these technologies when she served as Ohio University's Distinguished Professor and Russ Professor of Chemical and Biomolecular Engineering.

On March 31, 2021, we signed the Sublicense with ARC that provides us with a nonexclusive sublicense from ARC of certain patents ARC has sublicensed from Ohio University pursuant to the License Agreement relating to the manufacture of Graphene using coal byproducts. Pursuant to such agreement, we agreed to raise funds via an initial public offering in order to build a manufacturing facility to produce and market Graphene commercially. The agreement with ARC also provides that the Company and ARC are each entitled to receive fifty percent (50%) of the operating profits from our Graphene manufacturing and marketing business. This profit-sharing arrangement is limited to only the operating profits from the Graphene factory using the rights provided by the Sublicense and will not apply to any other activities in which the Company may engage in the future, including the production of Graphene using any other technology. Hence the Company has been researching alternative methods to produce Graphene. The Company also plans to look into acquiring companies that use or can use Graphene as raw material for other applications. As part of the above two agreements, Andrew Weeraratne was replaced by Mark Jensen, the Chief Executive Officer and the Chairman of the Board of ARC, as the Chairman of the Company’s Board of Directors.

As approved at a special shareholders meeting attended by major shareholders on March 19, 2021, we signed an agreement with ARC on March 31, 2021, to issue ARC 10,000,000 shares of Class B common stock (with 10 votes each) plus 5,700,000 shares of Class A common stock (with one vote each) of the Company, comprising 51.14% of total shares giving 87.57% of voting power to ARC, who plans to distribute such shares to ARC’s shareholders as stock dividends after the completion of this offering. At a special shareholders meeting held on April 4, 2021, attended by majority of shareholders, including ARC, the Company voted to eliminate the Class B shares and increase the Class A shares by the number of Class B shares then outstanding, and designate the Class A shares as “Common Shares.”. Further, at a special stockholders meeting held on April 16, 2021 attended by a majority of shareholders, the Company voted to effectuate a one-for-three (1:3) reverse stock split, which became effective as of April 16, 2021. As a consequence of eliminating the Class B shares on April 4, 2021, as of March 16, 2022 ARC holds 5,233,333 Class A common shares, or 49.92% of the Company’s voting stock, and Andrew Weeraratne holds 4,173,150 common shares, or 39.81% of the Company’s voting stock, based on 10,482,424 common shares outstanding.

In order to manufacture and market Graphene using the technology we have sublicensed from ARC, we have signed a lease agreement with ARC to lease land and a building ARC owns in Kentucky to build our Graphene manufacturing factory, with such lease payments to be paid after we have received the proceeds from this offering. Once we have received the proceeds from this offering, we plan to hire experts in the Graphene industry to help us select, buy and install the necessary equipment to begin the process of making Graphene from carbon.

Plan of Operation

We are leasing for $5,000 per month land and a building with approximately 40,000 square feet located at 1845 KY-15, Hazard, Kentucky 41701, owned by Perry County Resources, an affiliate of ARC. We plan to accrue the rental expenses to be paid only after we receive the proceeds from this offering. Following are features of the location:

● 40,000 square foot (3,716 square meter) facility to house the technology, located in Hazard, Kentucky;

● Significant additional developable area for expansion needs;

● Fully connected to industrial power grid and utilities; and

● Located adjacent to an operating coal processing facility, allowing for consistent and abundant feedstock and established infrastructure and resources.

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We have been informed that it will take 12 months for us to build a factory ready to produce Graphene for commercial use and to begin producing Graphene from Carbon using the patented technology that we sublicense from ARC. We estimate that it will take an additional 12 months to sell Graphene commercially.

In addition to preparing to make Graphene using this technology and building the factory in Kentucky, the Company’s management team has been engaged in discussions with others in the industry who claim to make Graphene from other sources. Once we receive the proceeds from this offering, we plan to look further into alternative methods of making Graphene.

We expect that our plan of operation, once we have received the funds from this offering, will be as follows:

1.	Hire experts in the Graphene industry to visit our warehouse in Kentucky and help us formulate a budget to acquire equipment and budget the working capital needed to operate such equipment.
2.	Locate companies making such equipment and negotiate to acquire and install the needed equipment.
3.	Acquire the raw material needed to make Graphene from ARC and other sources and begin the production process.
4.	Continue to look for other companies who make Graphene through alternative methods and, if needed, enter into joint ventures with or acquire such companies.
5.	Explore expanding our operation to other applications using Graphene through joint ventures or acquisitions.

Liquidity and Capital Resources

Since what we currently have is a Sublicense to make Graphene using carbon, using patented technology licensed by ARC, it is difficult to accurately estimate the cost to build the Graphene production factory, since that will require us to hire experts in the industry who will assist us in building the Graphene factory and locating and installing the necessary equipment. Once we have received the proceeds from this offering, we will begin to hire such experts. ARC’s preliminary discussions with the University of Ohio suggest that we will require approximately $4,000,000 to build a Graphene manufacturing plant. ARC has estimated the working capital needs to be $310,000 per month to begin building our Graphene manufacturing plant. Meanwhile, we also plan to explore producing Graphene through alternative methods.

After we have the proceeds from this offering, we estimate our administration fee to be approximately $30,000 per month. We plan to hire additional staff, including industry experts, and also to seek out other sources of producing Graphene. We estimate such additional cost to be about $50,000 per month.

As of December 31, 2021, we have $196,623 in cash and cash equivalents, which we expect will be sufficient to carry on our operations of preparing to build our factory. We do not anticipate receiving any revenue from Graphene sales for at least 24 months. However, we believe the proceeds we plan to raise from this offering will be sufficient to build a factory and begin producing revenue from the sale of Graphene.

In addition, if we find a potentially synergistic business that has positive operating cash flow, we plan to explore acquisitions of such businesses.

Currently, we have no written or oral communication from stockholders, directors or any officers to provide us any forms of cash advances, loans or sources of liquidity to meet our working capital needs or long-term or short-term financial needs.

Off Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that we are required to disclose pursuant to these regulations. In the ordinary course of business, we enter into operating lease commitments, purchase commitments and other contractual obligations. These transactions are recognized in our financial statements in accordance with generally accepted accounting principles in the United States.

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Critical Accounting Policies

The preparation of financial statements requires management to utilize estimates and make judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. These estimates are based on historical experience and on various other assumptions that management believes to be reasonable under the circumstances. The estimates are evaluated by management on an ongoing basis, and the results of these evaluations form a basis for making decisions about the carrying value of assets and liabilities that are not readily apparent from other sources. Although actual results may differ from these estimates under different assumptions or conditions, management believes that the estimates used in the preparation of our financial statements are reasonable. The critical accounting policies affecting our financial reporting are summarized in Note 2 to the financial statements included elsewhere in this prospectus.

Recent Accounting Pronouncements

We have determined that all other issued, but not yet effective accounting pronouncements are inapplicable or insignificant to us and once adopted are not expected to have a material impact on our financial position.

DIRECTORS AND EXECUTIVE OFFICERS

The following individuals serve as our executive officers and members of our board of directors:

Mark C. Jensen, age 41, Chairman of Board

Mark Jensen has been our Chairman of the board of directors since March 28, 2021. In 2015, Mr. Jensen founded Quest Energy, Inc. (“Quest”) to operate coal mines and process metalogical Carbon to provide as raw materials to make steel for various infrastructure projects. In January 2017, Quest undertook a reverse merger with NGFC Equities Inc. (“NGFC”), pursuant to which Quest’s shareholders received the majority of NGFC’s equity. NGFC’s name was subsequently changed to American Resources Corporation, with Mr. Jensen taking over the role of Chief Executive Officer and the Chairman of the Board. He has been instrumental in all aspects of acquiring, restructuring and building mining operations over the past decade. Having managed through 2009 and 2015 downturns, he has been able to work with his team to significantly expand ARC’s asset base through strategic acquisitions and organic growth in a very accretive manner. Mr. Jensen also is the Chairman and Chief Executive Officer of American Acquisition Opportunity Inc., (Nasdaq: AMAO), a blank check company formed in January 2021 for the purpose of acquiring, engaging in a share exchange, share reconstruction and amalgamation with, purchasing all or substantially all of the assets of, entering into contractual arrangements with, or engaging in any other similar business combination with one or more businesses or entities. Mr. Jensen is also the founder and Executive Chairman of Land Betterment Corp., a Benefit Corporation incorporated on February 13, 2020, focused on fostering a positive impact through upcycling former coal mining sites to create sustainable community development and job creation. Mr. Jensen is a graduate from Kelley School of Business at Indiana University with Bachelor degrees in Finance and International Studies.

I. Andrew Weeraratne, age 71, Chief Executive Officer, Director

I Andrew Weeraratne has served as our Chief Executive Officer and member of our board of directors since inception. Andrew has been an entrepreneur in many parts of the world, including Asia, the Middle East, Europe and the U.S., in a variety of industries. From April 2019 to August 2020, Andrew was the Chief Executive Officer and Chief Financial Officer for Acqusalut Inc., that filed a Regulation A offering to raise funds from the public to produce live entertainment shows. Due to COVID-19, the business plan could not be executed. Thus, in August 2020, Acqusalut Inc., merged with a biotech company called XEME Biopharma Inc., and changed its name to XEME Biopharma Holdings Inc. In August 2018, Mr. Weeraratne founded Mfusion Corp. also to produce live entertainment shows, focusing on raising funds via selling a Digital Coin of Mfusion, which is convertible into shares of Mfusion Corp. In August of 2020, Mfusion Corp. was sold to two entrepreneurs who are in the process of beginning a CBD-Coffee business using the Mfusion corporate structure. Currently, Mr. Weeraratne works as a consultant for Mfusion Corp. He founded Capax Inc. in February 2017 and worked as its Chief Executive Officer from February 2017 to May 2018, during which time he filed a prospectus with the SEC to take Capax Inc. public. In May 2018, Capax Inc. merged with Reborn Global Holdings Inc., a business in the wholesale and retail coffee sales industry, in a reverse merger and changed its name to Reborn Coffee Inc. From October 2013 to January 2017, Mr. Weeraratne served as the Chief Executive Officer and Chief Financial Officer for NGFC Equities Inc. (“NGFC”) a public company that was listed on the OTCQB under the ticker “NGFF.” NGFC was reverse merged with ARC. Mr. Weeraratne has been a Florida licensed Certified Public Accountant since 1981. He is also an author, and wrote a book entitled Uncommon Commonsense Steps to Super Wealth, where he illustrates how some people beginning with very little ended up in the list of richest people by focusing on only one out of four ways to make their wealth. Mr. Weeraratne devotes approximately 90% of his time to our business and affairs.

Ray Baum, age 74, Chief Financial Officer

Ray Baum has served as the Chief Financial Officer of the Company since March 8, 2022. From January 1995 to February 2022, Ray was the CEO and CFO of Performance Personnel Corporation, located in Carlsbad, California, which supplied specialized personnel to the film and television industry. From April of 2009 to June of 2017, he was also the CFO for CruiserBoard LLC based in San Diego, California. CruiserBoard designed and manufactured stand-up paddle boards. Mr. Baum earned a Bachelor of Arts degree in business and economics in 1971 from United States International University located in San Diego, California.

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Byron Eugene Price, age 58, member of the Board of Directors

Dr. Byron Price joined the Company as a director on April 15, 2021. He is currently a professor at the Department of Public Administration at Medgar Evers College of the City University of New York (CUNY), where he has been teaching since 2012. Dr. Price has had an impressive career both in business and in public administration both in the U.S. and internationally that he pursues to this day. He has lectured on public and private partnerships in 45 countries. Before beginning his academic career, Dr. Price served in the United States Army as Deputy Commander, Executive Officer, and Training Officer at Fort Sill during Operating Desert Storm. He honorably separated in 1991 and achieved the rank of Captain. His research focuses on social impact investment with particular emphasis on long-term investment in strategic sectors of the economy that create economic prosperity and social wealth. He is a published and respected author in the area of public-private partnerships.

Since 2019, he has conducted business development activities for various companies looking to engage governments and organizations that use ammonia, fuel cells, hydrogen, and hydrogen combustion technology. Corollary activities included driving growth organically and through the strategic acquisition of utility-scale renewable energy assets in the United States and abroad over the next five years.

Eugene Nichols, age 74, member of the Board of Directors, Secretary, Treasurer

Eugene Nichols has served as a director of our Company since inception. Mr. Nichols has 27 years of sales, management, and marketing experience with Abbot Laboratories (NYSE:ABT). From April 2019 to August 2020, Mr. Nichols was a Director for Acqusalut Inc., that filed a Regulation A offering to raise funds from the public to produce live entertainment shows. Due to COVID-19, the business plan could not be executed. Thus, in August 2020, Acqusalut Inc., merged with a biotech company called XEME Biopharma Inc., and changed its name to XEME Biopharma Holdings Inc. In August 2018 he joined as a Director for Mfusion Corp. that was also set up to produce live entertainment shows, focusing on raising funds via selling a Digital Coin of Mfusion, which is convertible into shares of Mfusion Corp. In August of 2020, Mfusion Corp. was sold to two entrepreneurs who are in the process of beginning a CBD-Coffee business. He was also a Director for Capax Inc. from February 2017 to May 2018, during which time Capax filed a prospectus with the SEC to take Capax Inc. public. In May 2018, Capax Inc. merged with Reborn Global Holdings Inc., a business in the wholesale and retail coffee industry, in a reverse merger and changed its name to Reborn Coffee Inc as part of that merger with Reborn Global Holdings Inc., management taking over the management of Reborn Coffee Inc. From October 2013 to January 2017, Mr. Nichols served as the President and a member of the Board of Directors for NGFC Equities Inc. (“NGFC”) a public company that was listed on the OTCQB under the ticker “NGFF.” In January 2017, NGFC was reverse merged with ARC.

Goran Antic, age 47, Member of the Board of Directors

Goran Antic has been a director of our Company since inception. He began his career with Getinge Sterilization factory (division of Getinge Group), a public company based in Sweden which is one of the largest medical supply companies in the world in 1990 as an assembler and then moved to the testing department of Getinge Group in 1995. He worked in that division till 1999 and then was promoted to be an international service engineer of Getinge Sweden which is another subsidiary of Getinge Group. In 2005, Mr. Antic was transferred to Getinge International branch in Miami, Florida as a service manager for Latin America and Caribbean islands. Mr. Antic began ECI-LATAM Inc. in April of 2014 with an agreement with Getinge International to serve the same client base through his own company, ECI-LATAM Inc., Mr. Antic had his education as an electronic engineer at Kattegat Institution in Halmstad, Sweden.

From April 2019 to August 2020, Mr. Antic was a Director for Acqusalut Inc., that filed a Regulation A offering to raise funds from the public to produce live entertainment shows. Due to COVID-19, the business plan could not be executed. Thus, in August 2020, Acqusalut Inc., merged with a biotech company called XEME Biopharma Inc., and changed the name to XEME Biopharma Holdings Inc. In August 2018 he joined as a Director for Mfusion Corp. that was also set up to do live entertainment shows focusing on raising funds via selling a Digital Coin of Mfusion which is convertible to the shares of Mfusion Corp., that in August of 2020, the management of Mfusion Corp., sold to two entrepreneurs who are in the process of beginning CBD-Coffee business. He was also a Director for Capax Inc. from February 2017 to May 2018 during which time Capax filed a prospectus with the SEC to take Capax Inc. public. In May 2018, Capax Inc. merged with Reborn Global Holdings Inc. in the business of wholesale and retail coffee sales in a reverse merge and changed its name to Reborn Coffee Inc as part of that merger with Reborn Global Holdings Inc., management taking over the management of Reborn Coffee Inc.

Director Qualifications

The following is a discussion for each director of the specific experience, qualifications, attributes or skills that lead our board of directors to conclude that each individual is qualified to serve as a director of our Company.

Mark C. Jensen – Mr. Jensen’s experience in founding ARC and completing a successful listing on NASDAQ were factors considered by the board of directors. Specifically, the board of directors viewed favorably his role in setting up a Special Purpose Acquisition Company “American Acquisition Opportunity” (NASDAQ: AMAOU) in reaching its conclusion.

Andrew Weeraratne – Mr. Weeraratne’ s experience in founding and filing a prospectus to take public NGFC Equities Inc. before merging it successfully with ARC, founding Capax Inc. and filing a prospectus with the SEC before merging it with Reborn Coffee Inc. and his experience founding additional companies engaged in securities offerings and his previous public company Chief Financial Officer experience were factors considered by the board of directors. Specifically, the board of directors viewed favorably his roles at China Direct, Inc., and J2 Communication Inc (with the brand name National Lampoon) as a financial advisor working with the Embassy of the United States of America in Iraq, and as a CPA in private practice in reaching its conclusion.

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Eugene Nichols – Mr. Nichols’s career as an entrepreneur and his involvement in various start-ups were factors considered by the board of directors. Specifically, the board of directors viewed favorably his role as a founder of publicly-traded companies, including NGFC Equities Inc., taking it public and merging with a bigger private company, along with his roles at Communication Exchange Inc., Visa Exchange Inc., Foxfire Golf Course, Power Management Electrical Consultants in reaching its conclusion.

Goran Antic – Mr. Antic’s long career with one major Swedish public company Getinge group in Sweden that is a leader in international market and his fluency in various languages and cultures were factors considered by the board of directors. Specifically, the board of directors viewed his entrepreneurial skills in setting up ECI Latam Inc., merging with NGFC Equities Inc. in reaching its conclusion.

Byron E. Price – Mr. Price’s long career in public service as professor of public administration, his service in the U.S. Army as Deputy Commander, Executive and Training Officer, international travels in the lecture circuit regarding public/private partnerships and his experience in business development activities were taken into consideration by the board of directors in reaching its conclusion.

In addition to each of the individual skills and backgrounds described above, the board of directors also concluded that each of these individuals will continue to provide knowledgeable advice to our other directors and to senior management on numerous issues facing our Company and on the development and execution of our strategy.

We expect to expand our board of directors in the future to include additional independent directors. In adding additional members to our board of directors, we will consider each candidate’s independence, skills and expertise based on a variety of factors, including the person’s experience or background in management, finance, regulatory matters and corporate governance. Further, when identifying nominees to serve as a director, we expect that our board of directors will seek to create a board of directors that is strong in its collective knowledge and has a diversity of skills and experience with respect to accounting and finance, management and leadership, vision and strategy, business operations, business judgment, industry knowledge and corporate governance.

Director Compensation

We have established a director compensation program, pursuant to which directors receive compensation of $3,000 Per quarter, while our Chairman of the Board receives $2,500 per month. Future compensation payable to each individual for their service on our Board will be determined from time to time by our compensation committee and our board of directors based upon the amount of time expended by each of the directors on our behalf. Currently, executive officers of our company who are also members of the board of directors do not receive any compensation specifically for their services as directors.

EXECUTIVE COMPENSATION

The following table sets forth information concerning the annual and long-term compensation of our Chief Executive Officer, and the executive officers who served at the end of the periods of December 31, 2020 and December 31, 2021, for services rendered in all capacities to us. The listed individuals shall hereinafter be referred to as the “Named Executive Officers.” Currently, we have no employment agreements with any of our Directors or Officers. Compensation for the future will be determined when and if additional funding is obtained.

Summary Compensation Table – Officers

(a)	(b)	(c)		(d)	(e)	(f)	(g)	(h)	(i)	(j)
		Salary		Bonus	Stock Awards	Option Awards	Non-equity Incentive plan compensation	Change in Pension Value and Nonqualified deferred compensation earnings	All other compensation	Total
Name and Principal Position	Year	($)		($)	($)	($)	($)	($)	($)	($)
I. Andrew Weeraratne, CEO	2021		62,500	-0-	-0-	-0-	-0-	-0-	-0-		62,500
Farai L. Gundan, Former CFO	2021		3,890	-0-	-0-	-0-	-0-	-0-	-0-		3,890
I. Andrew Weeraratne, CEO	2020	-0-		-0-	-0-	-0-	-0-	-0-	-0-	-0-
I Andrew Weeraratne, Former CFO	2020	-0-		-0-	-0-	-0-	-0-	-0-	-0-	-0-

(1)

There is no employment contract with Mr. Andrew Weeraratne at this time. Nor are there any agreements for compensation in the future. A salary and stock options and/or warrants program may be developed in the future. The amount of value for the services of Mr. Weeraratne was determined by agreement for shares in which he received as a founders for (1) control, (2) willingness to serve on the Board of Directors and (3) participation in the foundational days of the Company. The amount received by Mr. Weeraratne is not reflective of the true value of the contributed efforts by Mr. Weeraratne and was arbitrarily determined by the Company.

(2)

Does not include 4,079,980 shares of Common Stock purchased by Mr. Weeraratne for $0.0003 per share when he founded the Company in September 2020.

35

Director Compensation Table

(a)	(b)		(c)	(d)	(e)	(f)	(g)	(h)
	Fees earned or paid in cash		Stock Awards	Option Award(s)	Non-equity Incentive plan compensation	Change in Pension Value and Nonqualified deferred compensation earnings	All other Compensation	Total
Name and principal position	($)		($)	($)	($)	($)	($)	($)
Mark C. Jensen Chairman of the Board of Directors		20,000	-0-	-0-	-0-	-0-	-0-		20,000
I. Andrew Weeraratne CEO	-0-		-0-	-0-	-0-	-0-	-0-	-0-
Eugene Nichols Director		6,000	-0-	-0-	-0-	-0-	-0-		6,000
Goran Antic Director		6,000	-0-	-0-	-0-	-0-	-0-		6,000
Byron E. Price Director		6,000	-0-	-0-	-0-	-0-	-0-		6,000

Code of Business Conduct and Ethics

We have adopted a Code of Business Conduct and Ethics that applies to our executive officers and any other persons performing similar functions. This Code provides written standards that we believe are reasonably designed to deter wrongdoing and promote honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships, and full, fair, accurate, timely and understandable disclosure in reports we file with the SEC. A copy of our Code of Business Conduct and Ethics has been filed with the SEC as an exhibit to the registration statement of which this prospectus is a part.

Committees of our Board of Directors and the Role of our Board in Risk Oversight

Our board of directors has determined to facilitate the oversight and the communication between senior management and the board of directors regarding risk of operations and management, which the board of directors believes strengthens its risk oversight activities.

Mr. Weeraratne has served as our Chief Executive Officer as well as our Chairman of the Board of Directors until March of 2021, at which point Mark Jensen took over the role of Chairman of the Board of Directors. Mr. Weeraratne served as our Chief Financial Officer from March of 2021 until November 22, 2021.

Three directors of the Company, Mr. Nichols, Mr. Price and Mr. Antic, are considered independent directors under the rules of the Exchange. The board of directors oversees our business affairs and monitors the performance of management. In accordance with our corporate governance principles, the board of directors does not involve itself in day-to-day operations. Our independent directors keep informed through discussions with our executive officers and by reading the reports and other materials that we may send them and by participating in board of directors meetings.

We have established an Audit Committee, a Compensation Committee and a Nominating Committee. In accordance with the Exchange’s rules, each of our three independent directors, Mr. Nichols, Mr. Antic and Mr. Price are members of the Audit Committee, which is chaired by Mr. Nichols. Mr. Antic is considered an audit committee financial expert within the meaning of Item 401(e) of Regulation S-K. In general, an “audit committee financial expert” is an individual member of the audit committee or board of directors who:

● understands generally accepted accounting principles and financial statements;

● is able to assess the general application of such principles in connection with accounting for estimates, accruals and reserves;

● has experience preparing, auditing, analyzing or evaluating financial statements comparable to the breadth and complexity to our financial statements;

● understands internal controls over financial reporting; and

● understands audit committee functions.

The Compensation Committee consists of Mr. Antic and Mr Price, with Mr. Antic serving as the Chairman.  Each of Mr. Nichols, Mr. Antic and Mr. Price are members of the Nominating Committee, with Mr. Price serving as Chairman.

We do not have a policy regarding the consideration of any director candidates which may be recommended by our shareholders, including the minimum qualifications for director candidates, nor has our board of directors established a process for identifying and evaluating director nominees. Further, when identifying nominees to serve as director, while we do not have a policy regarding the consideration of diversity in selecting directors, however, at such time as we expand our board of directors, our board of directors will seek to create a board of directors that is strong in its collective knowledge and has a diversity of skills and experience with respect to accounting and finance, management and leadership, vision and strategy, business operations, business judgment, industry knowledge and corporate governance. We have not adopted a policy regarding the handling of any potential recommendation of director candidates by our shareholders, including the procedures to be followed. Our board of directors has not considered or adopted any of these policies as we have never received a recommendation from any shareholder for any candidate to serve on our board of directors. Given our relative size and lack of directors and officers insurance coverage, we do not anticipate that any of our shareholders will make such a recommendation in the near future. While there have been no nominations of additional directors proposed, in the event such a proposal is made, our Nominating Committee will first review the proposed nominations,  after which all members of our board of directors will participate in the consideration of director nominees. In considering a director nominee, it is likely that our board of directors will consider the professional and/or educational background of any nominee with a view towards how this person might bring a different viewpoint or experience to our board of directors.

36

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table presents information concerning the beneficial ownership of the shares of our Common Stock as of March 16, 2022, by: (i) each of our named executive officers and current directors, (ii) all of our current executive officers and directors as a group and (iii) each person we know to be the beneficial owner of 5% of more of our outstanding shares of common stock. Unless otherwise specified, the address of each beneficial owner listed in the table is c/o Novusterra Inc., 561 NE 79th Street, Suite 325, Miami, FL 33138.

Name	Number of Shares of Common Stock Beneficially Owned (1)		Percent of Common Stock Owned (2)			Voting Control by Officers & Directors		Percent of Voting Control by Officers & Directors (3)
Officers and Directors
Mark C Jensen		-		0	%		0		0.00	%
Andrew Weeraratne		4,173,150		39.81	%		4,173,150		39.81	%
Ray Baum		49,500	0.47		%		49,500	0.47		%
Eugene Nichols		118,530		1.13	%		118,530		1.13	%
Goran Antic		43,712		0.42	%		43,712		0.42	%
Byron E Price		-	-		%		-	-		%
All Directors and Officers as a Group (6 persons)		4,384,892		41,.83	%		4,384,892		41.83	%
5% Holders
American Resources Corp		5,233,333		49.92	%		5,233,333		49.92	%
All Directors, Officers and 5% Holders as a Group (7 persons)		9,618,225		91.76	%		9,618,225		91.76	%

(1) A person is deemed to be the beneficial owner of securities that can be acquired by such a person within 60 days from March 16, 2022, upon exercise of options, warrants or convertible securities. Each beneficial owner’s percentage ownership is determined by assuming that options, warrants and convertible securities that are held by such a person (but not those held by any other person) and are exercisable within 60 days from that date have been exercised.

(2) Percentage is based on the 10,482,424 common shares outstanding as of March 16, 2022.

(3) Percentage is based on the 10,482,424 common shares outstanding as of March 16, 2022.

(4) Includes 7,409 common shares held by Mr. Weeraratne’s spouse.

(5) Includes 7,409 common shares held by Mr. Nichols's spouse.

(6) The individuals who exercise voting or investment control over the common stock held by ARC are Mark Jensen, CEO; Thomas Sauve, President; and Kirk Taylor, CFO.

37

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

I. Andrew Weeraratne (“AW”), who founded the Company in September 2020, bought 3,666,667 shares of common stock from the Company at a price of $0.0003 per share. AW also purchased an additional 762,667 shares of common stock for $0.0003 per share, which he distributed to certain of his business associates that he believed could assist with the Company’s operations. Kazuko Kusunoki (“KK”), AW’s spouse, was given 6,667 common shares from the above-mentioned share distribution, as she joined the Company part-time as its Vice President of Administration. On January 12, 2021, AW and KK received an additional 408,314 and 742 common shares, respectively, as the Company gave all shareholders a stock dividend.

Mr. Eugene Nichols (“EN”), is a founder and organizer of the Company and our Secretary and Treasurer and a Director. Mr. Nichols received 23,333 common shares in September 2020, which are included in the 762,667 common shares mentioned above that were distributed by AW. Evelyn Nichols, EN’s spouse, purchased 6,667 common shares at a price of $0.003 per share when she joined the Company as the part-time marketing director in September 2020. On January 12, 2021, EN and Evelyn Nichols received an additional 1,856 and 742 common shares, respectively, as the Company gave all shareholders a stock dividend.

Mr. Goran Antic (“GA”), is a founder and organizer of the Company and a Director. Mr. Antic has received no compensation for his role as a founder. He received 6,667 common shares in September 2020, which are included in the 762,667 common shares mentioned above that were distributed by AW. On January 12, 2021, GA received an additional 742 common shares as the Company gave all shareholders a stock dividend.

In a private placement transaction completed by the Company in October 2020, EN and GA purchased 16,667 and 26,667 shares of common stock, respectively, at a price of $0.09 per share. In connection with the Company’s stock dividend paid on January 2021, EN and GA received an additional1,856 and 2,970 common shares, respectively. In a private placement transaction completed by the Company in April 2021, EN purchased an additional 66,667 shares at $1.50 per share. In the same private placement, GA purchased an additional 6,667 shares of common stock at $1.50 per share.

On September 21, 2020, AW loaned the Company $5,000 at 4% interest to be accrued and compounded quarterly. He continued to pay certain expenses of the Company personally and as of December 31, 2020, has a loan principal balance of $6,482. The Company has accrued interest expenses of $56 for the period ending December 31, 2020. For the quarter ending March 31, 2021, interest of $64.49 was accrued on this loan and for the month of April interest of $21.50 was accrued. AW also paid $91.13 on behalf of the company in April 2021, making the balance to be $6,715.43. The principal balance of the loan was paid in full on April 30, 2021.

Director Independence

Mr. Nichols, Mr. Antic and Mr. Price are considered independent within the Exchange’s director independence standards.

LEGAL MATTERS

The validity of the securities offered by this prospectus will be passed upon for us by Law Office of Clifford J. Hunt, P.A. Pryor Cashman LLP, New York, New York, is acting as counsel to the underwriters.

EXPERTS

Our financial statements as of December 31, 2121 and 2020, and for the period of September 21, 2020 to December 31, 2020 included in this prospectus have been audited by Paris, Kreit & Chiu CPA LLP (f/k/a Benjamin & Ko), independent registered public accounting firm, as indicated in their report with respect thereto, and have been so included in reliance upon the report of such firm given on their authority as experts in accounting and auditing.

38

WHERE YOU CAN FIND ADDITIONAL INFORMATION

We have filed with the SEC the registration statement on Form S-1 under the Securities Act for the Units offered by this prospectus. This prospectus, which is a part of the registration statement, does not contain all of the information in the registration statement and the exhibits filed with it, portions of which have been omitted as permitted by SEC rules and regulations. For further information concerning us and the Units offered by this prospectus, we refer to the registration statement and to the exhibits filed with it. Statements contained in this prospectus as to the content of any contract or other document referred to are not necessarily complete. In each instance, we refer you to the copy of the contracts and/or other documents filed as exhibits to the registration statement.

This registration statement on Form S-1, including exhibits, is available over the Internet at the SEC’s web site at http://www.sec.gov. You may also read and copy any document we file with the SEC at its public reference facilities:

Public Reference Room Office

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 at 100 F Street, N.E., Room 1580, Washington D.C. 20549. Callers in the United States can also call 1-202-551-8090 for further information on the operations of the public reference facilities.

DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION

FOR SECURITIES ACT LIABILITIES

Our directors and officers are indemnified as provided by Florida law and our bylaws. We have agreed to indemnify each of our directors and certain officers against certain liabilities, including liabilities under the Securities Act. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant to the provisions described above, or otherwise, we have been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than our payment of expenses incurred or paid by our director, officer or controlling person in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

We have been advised that in the opinion of the SEC indemnification for liabilities arising under the Securities Act is against public policy as expressed in the Securities Act, and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities is asserted by one of our directors, officers, or controlling persons in connection with the securities being registered, we will, unless in the opinion of our legal counsel the matter has been settled by controlling precedent, submit the question of whether such indemnification is against public policy to a court of appropriate jurisdiction. We will then be governed by the court’s decision.

Limitation on Liability

The Florida Business Corporation Act permits, but does not require, corporations to indemnify a director, officer or control person of the corporation for any liability asserted against him or her and liability and expenses incurred by him or her in their capacity as a director, officer, employee or agent, or arising out of her status as such, if he or she acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interests of the corporation, and, unless the articles of incorporation provide otherwise, whether or not the corporation has provided for indemnification in its articles of incorporation. Our articles of incorporation have no separate provision for indemnification of directors, officers, or control persons.

Insofar as the limitation of, or indemnification for, liabilities arising under the Securities Act of 1933, as amended (the “Securities Act”), may be permitted to directors, officers, or persons controlling us pursuant to the foregoing, or otherwise, we have been advised that, in the opinion of the SEC, such limitation or indemnification is against public policy as expressed in the Securities Act, and is, therefore, unenforceable.

39

FINANCIAL STATEMENTS

NOVUSTERRA INC.

(a development stage company)

Period December 31, 2021

CONTENTS

	Index
Report of Independent Registered Public Accounting Firm	F-2
Financial Statements
Balance Sheets	F-3
Statements of Operations	F-4
Statement of Stockholders’ Equity	F-5
Statements of Cash Flows	F-6
Notes to the Consolidated Financial Statements	F-7

F-1

Report of Independent Registered Public Accounting Firm

To the Board of Directors

and Stockholders of Novusterra, Inc.

Opinion on the Financial Statements

We have audited the accompanying balance sheets of Novusterra, Inc. (the “Company”) as of December 31, 2021 and 2020, and the related statement of operations, stockholders’ equity, and cash flows for the year ended December 31, 2021 and the period September 21, 2020 (date of formation) to December 31, 2020. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for the year ended December 31, 2021 and the period September 21, 2020 (date of formation) to December 31, 2020 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 audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

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

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Going Concern

The accompanying financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. As discussed in Note 9, the Company had an accumulated deficit of $310,608 and $2,538 at December 31, 2021 and 2020, respectively, had working capital of $5,664 and $12,291 at December 31, 2021 and 2020, respectively, had a net losses of approximately $308,070 and $2,538 for the year ended December 31, 2021 and for the period September 21, 2020 (date of formation) to December 31, 2020, respectively, and net cash used in operating activities of approximately $92,754 and $1,482 for the year ended December 31, 2021 and for the period September 21, 2020 (date of formation) to December 31, 2020, respectively, with no revenue earned since inception, and a lack of operational history. These matters raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 9. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Paris, Kreit & Chiu CPA LLP, /s/

NewYork,NY

February 21, 2022

We have served as the Company’s auditor since 2020

F-2

Balance Sheets

As of December 31,	2021			2020
ASSETS
Current assets:
Cash and cash equivalents	$	196,623		$	12,347
Total current assets		196,623			12,347
Non-current assets:
Intangible assets		450,221			-
Operating lease right-of-use asset		478,369			-
Total non-current assets		928,590			-
Total Assets	$	1,125,213		$	12,347
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payables	$	7,699		$	-
Accrued interest		-			56
Other current liabilities		145,934			-
Current portion of operating lease liabilities		37,326			-
Total current liabilities		190,959			56
Long term debt, net of current portion		-			6.482
Operating lease liabilities, less current portion		443,503			-
Total liabilities		634,462			6,538
Commitments and contingencies
Stockholders’ Equity
Preferred stock - no par value; 400,000,000 shares authorized; 0 shares issued and outstanding as of December 31, 2021 and December 31, 2020		-			-
Class A Common stock - no par value; 2,600,000,000 shares and 2,400,000,000 shares authorized as of December 31, 2021 and December 31, 2020, respectively; 10,481,347 shares and 832,670 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively		801,359			7,247
Class B Common stock - no par value; 0 shares and 200,000,000 shares authorized as of December 31, 2021 and December 31, 2020, respectively; 0 shares and 3,666,667 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively		-			1,100
Accumulated deficit		(310,608	)		(2,538	)
Total stockholders’ equity		490,751			5,809
Total Liabilities and Stockholders’ Equity	$	1,125,213		$	12,347

See accompanying financial statements notes

F-3

Statement of Operations

	Year Ended December 31, 2021			September 21, 2020 (date of formation)  to December 31, 2020
Operating expense:
General and administrative		307,984			2,482
Total operating expense		307,984			2,482
Loss from operations		(307,984	)		(2,482	)
Other expense:
Interest expense		(86	)		(56	)
Total other expense		(86	)		(56	)
Loss before provision for income taxes		(308,070	)		(2,538	)
Provision for (benefit from) income tax		-			-
Net loss	$	(308,070	)	$	(2,538	)
Earnings (loss) per share:
Basic and diluted	$	(0.03	)	$	0.00
Weighted average number of common shares outstanding:
Basic and diluted		9,267,918			4,349,654

See accompanying financial statements notes

F-4

Statement of Stockholders’ Equity

	Common Stock													Total Stockholders'
	Class A				Class B						Accumulated			Equity
	Shares		Amount		Shares			Amount			Deficit			(Deficit)
Balance at September 21, 2020 (date of formation)		-	$	-		-		$	-		$	-		$	-
Common stock issued		832,670		7,247		3,666,667			1,100			-			8,347
Net loss		-		-		-			-			(2,538	)		(2,538	)
Balance at December 31, 2020		832,670	$	7,247		3,666,667		$	1,100		$	(2,538	)	$	5,809
Conversion to class A common stock		3,666,667		1,100		(3,666,667	)		(1,100	)		-			-
Common stock issued for license agreement		5,233,332		471,000		-			-			-			471,000
Common stock issued for cash, net of underwriter discount		219,675		283,512		-			-			-			283,512
Common stock issued for services		28,333		38,500		-			-			-			38,500
Stock dividend distribution		500,670		-		-			-			-			-
Net loss		-		-		-			-			(308,070	)		(308,070	)
Balance at December 31, 2021		10,481,347	$	801,359		-		$	-		$	(310,608	)	$	490,751

See accompanying financial statements notes

F-5

Statements of Cash Flows

	Twelve Months Ended December 31, 2021			September 21, 2020 (date of formation) to December 31, 2020
Cash flows from operating activities:
Net loss	$	(308,070	)	$	(2,538	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Operating lease		2,460			-
Stock based compensation		38,500			1,000
Amortization of intangible assets		20,779			-
Changes in operating assets and liabilities:
Accounts payable		7,699			-
Accrued interest		(56	)		56
Other current liabilities		145,934			-
Net cash used in operating activities		(92,754	)		(1,482	)
Cash flows from financing activities:
Proceeds from loan on shareholder		-			6,482
Payments on loan on shareholder		(6,482	)		-
Proceeds from issuance of common stock		283,512			7,347
Net cash provided by financing activities		277,030			13,829
Net increase in cash and cash equivalents		184,276			12,347
Cash – beginning of year		12,347			-
Cash – end of year	$	196,623		$	12,347
Supplemental disclosure of cash flow information:
Interest paid	$	146		$	-
Taxes paid	$	-		$	-
Non-cash investing and financing activities:
Common Stock issued for intangible assets	$	471,000		$	-
Common Stock issued for services	$	38,500		$	-
Stock dividend distributed	$	-		$	-

See accompanying financial statements notes

F-6

NOVUSTERRA, INC.

Notes to Financial Statements

1. NATURE OF OPERATIONS

Novusterra, Inc., (the “Company”) was incorporated on September 21, 2020 in the State of Florida. The Company began its operation with a plan to build a Rare Earth Element (REE) processing facility to process & refine rare earth material to be used for various purposes.

On March 19, 2021 the Company held a special stockholders meeting with the majority approving a resolution to sign two agreements with American Resources Corp (ARC) currently trading on the NASDAQ under the stock symbol “AREC,” to issue ARC 10,000,000 Class B shares and 5,700,000 Class A shares of the Company, comprising 51.14% of ownership and 87.57% of voting power of the Company in exchange for ARC using the Company to build a Graphene Manufacturing Operation using certain technology to which ARC has licensed and will sublicense to the Company.

The second agreement is a Graphene Development Agreement for the Company to raise funds to develop and market Graphene made through ARC owned patented technology. Due to this agreement the Company changed its main operations from Rare Earth Element Processing Factory building to building a manufacturing plant to make Graphene and market it using the patented technology currently owned by ARC. Also, this agreement provides that the Company shares the operating profits from this Graphene manufacturing and marketing business 50% each with ARC.

At a special shareholders meeting held on April 4, 2021, attended by majority of shareholders, including ARC, the Company voted to eliminate the Class B shares and increase the Class A shares by the number of Class B shares then outstanding, and designate the Class A shares as “Common Shares.” Further, at a special stockholders meeting held on April 16, 2021, attended by a majority of shareholders, the Company voted to effectuate a one-for-three (1:3) reverse stock split, which became effective as of April 16, 2021.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

This summary of significant accounting policies of the Company is presented to assist in understanding the Company’s financial statements. The financial statements and notes are representation of the Company’s management who are responsible for the integrity and objectivity of the financial statements. These accounting policies conform to accounting principles generally accepted in the United State of America (“GAAP”) and have been consistently applied in the preparation of the financial statements.

Basis of Presentation and Consolidation

The accounting and reporting policies of the Company are in accordance with GAAP, which is based on the accrual method of accounting.

Use of Estimates

The preparation of financial statements in conformity with GAAP 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 revenue and expenses during the reporting period. Significant estimates may include, but are not limited to, the estimated useful lives of property and equipment, patent and trademark, the ultimate collection of accounts receivable and accrued expenses. Actual results could materially differ from those estimates.

Advertising Expense

Advertising expense amounted to $0 for the year ended December 31, 2021 and the period from September 21, 2020 (date of formation) to December 31, 2020.

F-7

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Cash and Cash Equivalents

The Company considers all deposits with financial institutions and all highly liquid investments with maturities of three months or less when acquired to be cash equivalents. There were no cash equivalents at December 31, 2021 and 2020.

Impairment analysis for long-lived assets and intangible assets

The Company’s long-lived assets and other assets (consisting of property and equipment and purchased intangible assets) are reviewed for impairment in accordance with the guidance of the FASB ASC 360, Property, Plant, and Equipment and FASB ASC 205 Presentation of Financial Statements. The Company tests for impairment losses on long-lived assets used in operations whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Recoverability of an asset to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the asset. If such asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. Impairment evaluations involve management’s estimates on asset useful lives and future cash flows. Actual useful lives and cash flows could be different from those estimated by management which could have a material effect on our reporting results and financial positions. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. The Company had not experienced impairment losses on its long-lived assets and intangible assets during any of the periods presented.

Fair Value of Financial Instruments

The Company records its financial assets and liabilities at fair value, which is defined under the applicable accounting standards 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 measure date. The Company uses valuation techniques to measure fair value, maximizing the use of observable outputs and minimizing the use of unobservable inputs. The standard describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following:

Level 1 – Quoted prices in active markets for identical assets or liabilities.

Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – Inputs include management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. The inputs are unobservable in the market and significant to the instrument’s valuation.

As of December 31, 2021, the Company believes that the carrying value of cash and liabilities approximate fair value due to the short maturity of theses financial instruments. The financial statements do not include any financial instruments at fair value on a recurring or non-recurring basis.

F-8

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Leases

In accordance with ASC 842, Leases, the Company determines if an arrangement is a lease at inception. The Company has operating leases for the Company’s corporate offices, and warehouse. Operating leases are included in operating lease ROU assets and operating lease liabilities, current and noncurrent, on the balance sheets. Lease liabilities are calculated using the effective interest method, regardless of classification, while the amortization of ROU assets varies depending upon classification. Operating lease classification results in a straight-line expense recognition pattern over the lease term and recognizes lease expense as a single expense component, which results in amortization of the ROU asset that equals the difference between lease expense and interest expense. Lease expense for operating leases is included in cost of sales or selling and administrative expense, based on the use of the leased asset, on the statements of operations. Variable payments such as property taxes, insurance and common area maintenance related to triple net leases, as well as certain equipment sales taxes, licenses, fees and repairs, are expensed as incurred, and leases with an initial term of 12 months or less are excluded from minimum lease payments and are not recorded on the balance sheet. The Company recognizes operating lease costs on a straight-line basis over the lease term for short term leases.

ROU assets represent the right to use an underlying asset for the lease term and operating lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the reasonably certain lease term

The operating lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Operating lease expense for lease payments is recognized on a straight-line basis over the lease term.

Income Taxes

Income taxes include U.S. federal and state income taxes currently payable and deferred income taxes. Under the asset and liability method prescribed under ASC 740, Income Taxes, the Company, recognized deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using the 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 the period of enactment. Deferred income tax expense represents the change during the year in the deferred tax assets and liabilities. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax asset will not be realized.

The Company filed its initial tax return for the period ended December 31, 2020. As it was zero tax return, management believes that it does not anticipate any adjustments that will result in a material change. The Company’s policy for recording interest and penalties, if any, associated with income tax examinations will be to record such items as a component of income taxes.

Related Party Transactions

In accordance with FASB ASC 850 related parties are defined as either an executive, director, or nominee, greater than 10% beneficial owner, or an immediate family member of any of the proceeding. Transactions with related parties are reviewed and approved by the directors of the Company, as per internal policies.

F-9

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Stock-based Compensation

In accordance with ASC No. 718, Compensation – Stock Compensation (“ASC 718”), we measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share-based compensation arrangements include stock options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. As such, compensation cost is measured on the date of grant at their fair value. Such compensation amounts, if any, are amortized over the respective service periods of the grantee. Equity instruments (“instruments”) issued to other than employees are recorded on the basis of the fair value of the instruments, as required by ASC 718. ASC 505, Equity Based Payments to Non-Employees (“ASC 505”) defines the measurement date and recognition period for such instruments. In general, the measurement date is (a) when a performance commitment, as defined, is reached or (b) when the earlier of (i) the non-employee performance is complete or (ii) the instruments are vested. The measured value related to the instruments is recognized over a period based on the facts and circumstances of each particular grant as defined in the ASC 505. The Company had stock-based compensation $38,500 during the year ending December 31, 2021.

F-10

Recently Issued Accounting Pronouncements

Pronouncements Not Yet Effective

● Reference Rate Reform

In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848)—Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This standard provides optional guidance for a limited time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The amendments in this standard apply only to contracts and hedging relationships that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform. The expedients and exceptions provided by the amendments do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022. The amendments in this standard are elective and are effective upon issuance for all entities. The Company is evaluating the expedients and exceptions provided by the amendments in this standard to determine their impact.

Recently Adopted Pronouncements

● Fair Value Measurements

In August 2018, the FASB amended “Fair Value Measurements” to modify the disclosure requirements related to fair value. The amendment removes requirements to disclose (1) the amount of and reasons for transfers between levels 1 and 2 of the fair value hierarchy, (2) our policy related to the timing of transfers between levels, and (3) the valuation processes used in level 3 measurements. It clarifies that, for investments measured at net asset value, disclosure of liquidation timing is only required if the investee has communicated the timing either to us or publicly. It also clarifies that the narrative disclosure of the effect of changes in level 3 inputs should be based on changes that could occur at the reporting date. The amendment adds a requirement to disclose the range and weighted average of significant unobservable inputs used in level 3 measurements. The guidance is effective for the Company with the Company’s quarterly filing for the period ended December 31, 2021 and the Company made the required disclosure changes in that filing and going forward. Adoption did not have an impact on the Company’s interim unaudited condensed statement of operations, balance sheets, and cash flows.

3. INTANGIBLE ASSETS

Intangible assets consisted of the following:

	Effective Date	End Date	December 31, 2021
Sub licenses	March 31, 2021	August 31, 2038	$	471,000
Less - accumulated amortization				(20,779	)
Total intangible assets, net			$	450,221

On March 19, 2021, the Company executed two agreements with ARC in exchange for 5,233,332 Class A shares of the Company. Based on a recent sale of equity at $0.09 per share these shares were valued at $471,000 and the entire amount is classified as intangible assets. Due to this agreement the Company will change its main operations from Rare Earth Element Processing Factory building to building a manufacturing plant to make Graphene and market them using the patented technology currently owned by ARC.

Amortization expense was $20,779 for the year ended December 31, 2021.

Future amortization expense of intangible assets is as follows:

Years ending December 31,	Amount
2022	$	27,706
2023		27,706
2024		27,706
2025		27,706
2026		27,706
Thereafter		311,691
Total	$	450,221

F-11

4. LOAN FROM SHAREHOLDER

On September 21, 2020, the founder and major shareholder of the Company, Andrew Weeraratne, loaned the Company $5,000 at 4% interest to be accrued and compounded quarterly. He continued to pay certain expenses of the Company. The Company repaid the loan on April 29, 2021, and as of December 31, 2021 and December 31, 2020 the Company has a loan principal balance of $0 and $6,482, respectively to him. The Company had accrued interest totaling of $0 at December 31, 2021. Interest expense for the year ended December 31, 2021 and for the period September 21, 2020 (date of formation) to December 31, 2020 were $86 and $56 respectively.

	As of December 31, 2021		As of  December 31, 2020
September 2020 - 4% interest due on demand.	$	-	$	5,000
October 2020 - 4% interest due on demand.		-		1,482
Total notes payable	$	-	$	6,482
Less: current portion		-		-
Loan payable, net of current portion	$	-	$	6,482

5. EARNINGS PER SHARE

The Company calculates earnings per share in accordance with ASC 260, “Earnings Per Share,” which requires a dual presentation of basic and diluted earnings per share. Basic earnings per share are computed using the weighted average number of shares outstanding during the fiscal year. Dilutive earnings per share is computed on the basis of the weighted average number of shares plus potentially dilutive common shares which would consist of stock options outstanding (using the treasury method), which was none since the Company had net losses and any additional potential shares would be antidilutive.

The following table sets forth the computation of basic and diluted net income per common share:

	Year Ended December 31, 2021			September 21, 2020 (date of formation) to December 31, 2020
Net loss	$	(308,070	)	$	(2,538	)
Dividends		-			-
Stock option		-			-
Adjusted net income (loss) attribution to stockholders	$	(308,070	)	$	(2,538	)
Weighted-average shares of common stock outstanding
Basic and Diluted		9,267,918			4,349,654
Net income (loss) attribute to shareholders per share
Basic and Diluted	$	(0.03	)	$	(0.00	)

F-12

6. STOCKHOLDERS’ EQUITY

The Company has 3,000,000,000 authorized shares of capital stock, which consists of (i) 2,600,000,000 shares of Class A common stock, at no par value per share; and (ii) 400,000,000 shares of preferred stock, at no par value per share.

The holders of Class A common stock shall be entitled to one vote per share and shall be entitled to dividends as shall be declared by the Company’s Board of Directors from time to time.  Each share of Class B common stock shall entitle the holder thereof to 10 votes for each one vote per share of Class A common stock, and with respect to such vote, shall be entitled, notwithstanding any provision hereof, to notice of any stockholders’ meeting in accordance with the bylaws of this corporation, and shall be entitled to vote, together as a single class with holders of Class A common stock with respect to any question or matter upon which holders of Class A common stock have the right to vote. Class B common stock shall also entitle the holders thereof to vote as a separate class as set forth herein and as required by law. Holders of Class B common stock shall be entitled to dividends as shall be declared by its Board of Directors from time to time at the same rate per share as the Class A common stock. The holders of the Class B common stock shall have the right to convert each one of their shares to one share of Class A common stock automatically by surrendering the shares of Class B common stock to the Company.

At a special shareholders meeting held on April 4, 2021, attended by majority of shareholders, the Company voted to eliminate the Class B shares and increase the Class A shares by the number of Class B shares then outstanding, and designate the Class A shares as “Common Shares.” Further, at a special stockholders meeting held on April 16, 2021, attended by a majority of shareholders, the Company voted to effectuate a one-for-three (1:3) reverse stock split, which became effective as of April 16, 2021. All share numbers in these financial statements have thus been adjusted to give effect to such reverse stock split. Accordingly, we filed an amended Articles of Incorporation on April 13, 2021, to amend as follows:

The maximum number of shares of capital stock that this Corporation shall be authorized to issue and have outstanding at any one time shall be Three Billion (3,000,000,000) at no par value per share of which the number of designated shares of Class A Common  Stock shall change from 2,400,000,000  to (1) 2,600,000,000 shares designated as “Common Stock”, at no par value per share, (2) 200,000,000 shares that was previously designated as Class B Common Stock, at no par value per share shall be cancelled, and (3) 400,000,000 shares of Preferred Stock, par value of at no par value per share shall remain the same.

The Common Stock shall be changed to be designated as follows:

The Common Stock shall be designated “Common Stock” at no par value per share, and the number of shares constituting of the Common Stock shall be 2,600,000,000 shares.  The holders of Common Stock shall be entitled to one vote per share. Holders of Common Stock shall be entitled to dividends as shall be declared by the Corporation’s Board of Directors from time to time. The Class B Common Stock that was designated at the initial incorporation date shall be cancelled.

The Preferred Stock shall remain designated as follows:

The Preferred Stock shall be designated as “Preferred Stock” at no par value per share, and the number of shares constituting the Preferred Stock shall be 400,000,000 shares. Classes and series of the Preferred Stock may be created and issued from time to time, with such designations, preferences, conversion rights, cumulative, relative, participating, optional or other rights, including voting rights, qualifications, limitations, or restrictions thereof as shall be stated and expressed in the resolution or resolutions providing for the creation and issuance of such classes or series of Preferred Stock as adopted by the Board of Directors.

As of December 31, 2021 the Company has 0 Class B common stock outstanding and 10,481,347 Class A common stock outstanding.

On January 12, 2021, the Company distributed stock dividends of 500,670 Class A shares to the Class A common stockholders.

On January 12, 2021, the Company issued 3,333 Class A shares to Clifford Hunt valued at $1,000 for consulting service.

On March 31, 2021, the Company converted 3,666,667 Class B shares to Class A shares.

On March 31, 2021, the Company issued 1,900,000 Class A shares and 3,333,333 Class B shares to ARC valued at $471,000 in exchange for entering into the two agreements.

From April 2, 2021 through May 3, 2021, the Company issued 219,675 Class A shares valued at $283,512 for cash, net of underwriter discount $50,000.

On May 3, 2021, the Company issued 25,000 Class A shares to La Verghette valued at $37,500 for consulting service.

On June 12, 2021, the Company converted 3,333,333 Class B shares to Class A shares.

7. INCOME TAX PROVISION

The Company did not have a material income tax provision (benefit) because of net losses and valuation allowances against deferred income tax provision for the year ended December 31, 2021 and the period from September  21, 2020 (date of formation) to December 31, 2020.

A reconciliation of the Company’s effective tax rate to the statutory federal rate is as follows: 

Description	2021 Rate			2020 Rate
Statutory federal rate		21.00	%		21.00	%
State income taxes net of federal income tax benefit and others		0.00	%		0.00	%
Permanent differences for tax purposes and others		0.00	%		0.00	%
Change in valuation allowance		-21.00	%		-21.00	%
Effective tax rate		0.00	%		0.00	%

F-13

The income tax benefit differs from the amount computed by applying the U.S. federal statutory tax rate of 21%, primarily due to the change in the valuation allowance.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

The components of deferred tax assets and liabilities are as follows:

	Year Ended December 31, 2021			September 21, 2020 (date of formation) to December 31, 2020
Deferred tax assets:
Net operating loss	$	65,228		$	533
Other temporary differences		-			-
Total deferred tax assets		65,228			533
Less – valuation allowance		(65,228	)		(533	)
Total deferred tax assets	$	-		$	-

At December 31, 2021 and December 31, 2020, the Company had available net operating loss carryovers of approximately $308,070 and $2,538, respectively. Per the Tax Cuts and Jobs Act (TCJA) implemented in 2018, the two-year carryback provision was removed and now allows for an indefinite carryforward period. The carryforwards are limited to 80% of each subsequent year’s net income. The Company has a deferred tax asset arising from the benefits of such net operating loss deduction and has recorded a valuation allowance for the full amount of this deferred tax asset since it is more likely than not that some or all of the deferred tax asset may not be realized.

8. COMMITMENTS AND CONTINGENCIES

Operating Leases

The Company adopted ASC 842 as of September 21, 2020 (date of formation). The Company has an operating lease for the Company’s corporate office and accounts for this lease in accordance with ASC 842.

On April 29, 2021, the Company entered into a 120-month lease for its warehouse at $5,000 per month commencing June 1, 2021 maturing May 31, 2031. On May 1 2021, the signing of the lease resulted in the initial recognition of operating lease ROU asset of $501,459 and liability of $501,459.

Operating lease right-of-use (“ROU”) assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Generally, the implicit rate of interest in arrangements is not readily determinable and the Company utilizes its incremental borrowing rate in determining the present value of lease payments. The Company’s incremental borrowing rate is a hypothetical rate based on its understanding of what its credit rating would be. The operating lease ROU asset includes any lease payments made and excludes lease incentives. Our variable lease payments primarily consist of maintenance and other operating expenses from our real estate leases. Variable lease payments are excluded from the ROU assets and lease liabilities and are recognized in the period in which the obligation for those payments is incurred. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.

We have lease agreements with lease and non-lease components. We have elected to account for these lease and non-lease components as a single lease component. We are also electing not to apply the recognition requirements to short-term leases of twelve months or less and instead will recognize lease payments as expense on a straight-line basis over the lease term.

F-14

The Company entered into the following operating facility leases:

· Corporate office - On May 1, 2021, the Company entered into an operating facility lease for its corporate office located in 561 NE 79 Street, Suite 325, Miami, FL with a month-to-month term. The lease starts on May 1, 2021 for $200 per month.

· Warehouse- On April 29, 2021, the Company entered into an operating facility lease for its warehouse located at 1845 Highway 15 South, Suite 102, Hazard, KY with 120 months term and option to extend. The lease started on June 1, 2021 and expires on May 31, 2031.

In accordance with ASC 842, the components of lease expense were as follows:

	Twelve Months Ended December 31, 2021
Operating lease expense	$	37,460
Total lease expense	$	37,460
In accordance with ASC 842, other information related to leases was as follows:
	Twelve Months Ended December 31, 2021
Operating cash flows from operating leases	$	35,000
Cash unpaid for amounts considered in the measurement of lease liabilities (disclosed under other current liabilities)	$	35,000
Weighted-average remaining lease term—operating leases	9.4 Years
Weighted-average discount rate—operating leases		5	%

F-15

In accordance with ASC 842, maturities of operating lease liabilities as of December 31, 2021 were as follows:

	Operating
For the years ending December 31,	Lease
2022	$	60,525
2023		61,433
2024		62,354
2025		63,290
2026		64,239
Thereafter		295,322
Total undiscounted cash flows	$	607,163
Reconciliation of lease liabilities:
Weighted-average remaining lease terms	9.4 Years
Weighted-average discount rate		5	%
Present values	$	480,829
Lease liabilities—current		37,326
Lease liabilities—long-term		443,503
Lease liabilities—total	$	480,829
Difference between undiscounted and discounted cash flows	$	126,334

Contingencies

The Company is subject to various legal proceedings from time to time as part of its business. As of December 31, 2021 and December 31, 2020, the Company was not currently party to any legal proceedings or threatened legal proceedings, the adverse outcome of which, individually or in the aggregate, it believes would have a material adverse effect on its business, financial condition and results of operations.

9. GOING CONCERN

The Company’s financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern which contemplates the realization of assets and

liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating cost and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan to obtain such resources for the Company include, obtaining capital from management and significant stockholders sufficient to meet its minimal operating expenses. However, management cannot provide any assurance that the Company will be successful in accomplishing any of its plans.

There is no assurance that the Company will be able to obtain sufficient additional funds when needed or that such funds, if available, will be obtainable on terms satisfactory to the Company. In addition, profitability will ultimately depend upon the level of revenues received from business operations. However, there is no assurance that the Company will attain profitability. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

10. SUBSEQUENT EVENTS

The Company evaluated all events or transactions that occurred after December 31, 2021 up through the date the financial statements were available to be issued. During this period, the Company did not have any material recognizable subsequent events required to be disclosed as of and for the year ended December 31, 2021. 

F-16

NOVUSTERRA INC.

Units Consisting of 3,333,333 Shares of Common Stock and Warrants to purchase up to 6,666,666 Shares of Common Stock

PROSPECTUS

No dealer, sales representative or any other person has been authorized to give any information or to make any representations other than those contained in this prospectus and, if given or made, such information or representation must not be relied upon as having been authorized by the company or any of the underwriters. This prospectus does not constitute an offer of any securities other than those to which it relates or an offer to sell, or a solicitation of any offer to buy, to any person in any jurisdiction where such an offer or solicitation would be unlawful. Neither the delivery of this prospectus nor any sale made hereunder shall, under any circumstances, create an implication that the information set forth herein is correct as of any time subsequent to the date hereof.

March __, 2022

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The estimated expenses of this offering in connection with the issuance and distribution of the securities being registered, all of which are to be paid by the Company, are as follows:

SEC registration fee	$	6,457,.79
Nasdaq listing fee	$	225,000
FINRA filing fee	$	8,450
Printing expenses	$	50,000	*
Legal Fees and Expenses	$	100,000	*
Accounting Fees and Expenses	$	50,000	*
Miscellaneous Expenses	$	50,000	*
Total	$	489,907,.79

* Estimate

II-1

INDEMNIFICATION OF DIRECTORS AND OFFICERS

The Florida Business Corporation Act permits, but does not require, corporations to indemnify a director, officer or control person of the corporation for any liability asserted against her and liability and expenses incurred by her in her capacity as a director, officer, employee or agent, or arising out of her status as such, if he or she acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interests of the corporation, and, unless the articles of incorporation provide otherwise, whether or not the corporation has provided for indemnification in its articles of incorporation. Our articles of incorporation have no separate provision for indemnification of directors, officers, or control persons.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling our company pursuant to the foregoing provisions, we have been informed that in the opinion of the SEC, such indemnification is against public policy as expressed in the act and is therefore unenforceable.

RECENT SALES OF UNREGISTERED SECURITIES

The following are all issuances of securities by the registrant since its formation in September 2020, which were not registered under the Securities Act. In each of these issuances the recipient represented that he or she was acquiring the shares for investment purposes only, and not with a view towards distribution or resale except in compliance with applicable securities laws. No general solicitation or advertising was used in connection with any transaction, and the certificate evidencing the securities that were issued contained a legend restricting their transferability absent registration under the Securities Act or the availability of an applicable exemption therefrom. Unless specifically set forth below, no underwriter participated in the transaction and no commissions were paid in connection with the transactions.

As shown on the table below, on September 24, 2020, the Company issued the following common stock as founders’ shares to the following officers and directors at $0.0003 per share for a total of $1,111.

Name	Title	# of Shares		Consideration ($)
I. Andrew Weeraratne	Chief Executive Officer		3,666,6667	$	1,100.00
Eugene Nichols	Director		23,333	$	7.00
Groan Antic	Director		6,667	$	2.00
Kazuko Kusunoki	Vice President		6,667	$	2.00

Also, on September 24, 2020 AW paid $221 to the Company to buy 762,667 shares of common stock at $0.0003 per share on behalf of a list of affiliates (including the directors and officers above) who AW believed could help the operations of the Company.

In October of 2020, in a private placement transaction, the Company sold to 5 close business associates 66,667 shares at $0.09 per share for a total of $6,000.

In April of 2021, in a private placement transaction, the Company sold 213,674 common shares to close business associates for a total of $320,512.

II-2

EXHIBITS

Exhibit No.	Description	Filed with
1.1	Form of Underwriting Agreement	F iled herewith
3.1	Articles of Incorporation Novusterra Inc.	Previously filed
3.2	Amended Articles of Incorporation Novusterra Inc.	Previously filed
3.3	Bylaws of Novusterra Inc.	Previously filed
4.1	Form of Warrant Agency Agreement, including Form of Warrant Certificate	Previously filed
4.2	Common Stock Purchase Warrant	Previously filed
4.3	Form of Underwriters’ Warrant	F iled herewith
5.1	Opinion of Counsel	Previously filed
10.1	Agreement dated March 31, 2021 by and between Novusterra Inc., and American Resources Corp.	Previously filed
10.2	Graphene Development Agreement dated as of March 31, 2021 by and between Novusterra Inc. and American Resources Corporation	Previously filed
10.3	First Amendment to Graphene Development Agreement dated as of May 14, 2021 by and between Novusterra Inc. and American Resources Corporation	Previously filed
10.4	Loan payable Agreement dated as of September 24, 2020 by and between Novusterra Inc., and I Andrew Weeraratne	Previously filed
10.5	Carbon Purchase Agreement dated as of April 24, 2021 by and between Novusterra Inc., and American Resources Corporation	Previously filed
10.6	The Exclusive License Agreement signed on February 10, 2021 by and between American Resources Corporation and Ohio University	Previously filed
14.1	Code of Conduct	Previously filed
14.2	Financial Code of Ethics	Previously filed
23.1	Consent of Auditor- Paris, Kreit & Chiu CPA LLP (formerly Benjamin and Ko)	Filed herewith
23.2	Consent of Counsel (included in Exhibit 5.1)	Previously filed
24.1	Power of Attorney	Previously filed
99.1	Audit Committee Charter	Previously filed
99.2	Compensation Committee Charter	Previously filed
99.3	Nominating Committee Charter	Previously filed
107	Filing Fee Table	Filed herewith

II-3

UNDERTAKINGS

The undersigned registrant hereby undertakes:

1. To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement, to:

(i) include any prospectus required by Section 10(a)(3) of the Securities Act;

(ii) reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and

(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.

2. That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

3. To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

4. That insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant, the registrant has been advised that in the opinion of the SEC, such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registration of expenses incurred or paid by a director, officer or controlling person to the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

5. That, for the purpose of determining liability under the Securities Act to any purchaser, if the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

6. That, for the purpose of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

(i) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424 (§ 230.424 );

(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;

(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and

(iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant has duly caused this Amendment No. 4 to the registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the, State of Florida on March 16, 2022.

Novusterra Inc.
By:	/s/ I. Andrew Weeraratne
Name:	I. Andrew Weeraratne
Title:	Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/ Mark C. Jensen	Chairman of the Board of Directors
Mark C. Jensen		March 16, 2022
/s/ I. Andrew Weeraratne	Chief Executive Officer (Principal Executive Officer)
I. Andrew Weeraratne		March 16, 2022
/s/ Ray Baum	Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
Ray Baum		March 16, 2022
*	Director	March 16, 2022
Eugene Nichols
*	Director	March 16, 2022
Goran Antic
*	Director	March 16, 2022
Byron E Price

* Pursuant to power of attorney

By:	/s/ I. Andrew Weeraratne
	I. Andrew Weeraratne
	Attorney-in-Fact

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EX-1.1

EXHIBIT 1.1

NOVUSTERRA INC.

UNDERWRITING AGREEMENT

[     ], 2022

EF Hutton, division of Benchmark Investments, LLC

590 Madison Avenue, 39^th Floor

New York, New York 10022

As Representative of the Underwriters

named on Schedule A hereto

Ladies and Gentlemen:

Novusterra Inc., a Florida corporation (the “Company”), proposes, subject to the terms and conditions stated herein, to issue and sell an aggregate of [    ] units (the “Units”), with each Unit consisting of one share of the Company’s common stock, no par value per share (the “Shares”), and one warrant to purchase two Shares (the “Warrant”) to the several underwriters (such underwriters, for whom EF Hutton, division of Benchmark Investments, LLC (“EF Hutton” or the “Representative”) is acting as representative, the “Underwriters” and each an “Underwriter”). Such Units are hereinafter collectively called the “Firm Securities.” The Company has also agreed to grant to the Representative on behalf of the Underwriters an option (the “Option”) to purchase up to an additional [    ] Shares (the “Option Shares”) and/or [    ] Warrants (the “Option Warrants”, and together with the Units and Option Shares and Option Warrants, the “Offered Units”) on the terms set forth in Section 1(b) hereof. The Option Shares and Option Warrants are hereinafter collectively called the “Option Securities.” The Offered Units are hereinafter also called the “Offered Securities” and the offering of such Offered Securities is hereinafter called the “Offering”. The Shares issuable upon the exercise of the Warrants are hereinafter called the “Warrant Shares.” The Offered Securities and all Shares underlying the securities therein (including the Shares and Warrant Shares) and the Underwriters’ Securities are herein collectively called the “Securities.”

The Company confirms as follows its agreement with each of the Underwriters:

1. Agreement to Sell and Purchase.

(a) Purchase of Firm Securities. On the basis of the representations, warranties and agreements of the Company contained herein and subject to all the terms and conditions of this Agreement, the Company agrees to sell to the Underwriters, severally and not jointly, and the Underwriters, severally and not jointly, agree to purchase from the Company, the Units, at a purchase price (the “Purchase Price”) (prior to discount and commissions) of $[    ] per Unit (or $[    ] per Unit net of discount and commissions).

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(b) Purchase of Option Shares and/or Option Warrants. Subject to all the terms and conditions of this Agreement, the Company grants to the Representative on behalf of the Underwriters the Option to purchase, severally and not jointly, all or less than all of the Shares and/or Warrants included in the Option Securities, which may be purchased in any combination of Shares and/or Warrants. The purchase price (net of discount and commissions) to be paid for each Share will be the same Purchase Price (net of discount and commissions) allocated to each Firm Unit, minus $0.000001. The purchase price (net of discount and commissions) to be paid for each Warrant shall be $0.000001. The Option may be exercised in whole or in part at any time and from time to time on or before the 45th day after the date of this Agreement, upon written notice (the “Option Notice”) by the Representative to the Company no later than 12:00 noon, New York City time, at least one and no more than five business days before the date specified for closing in the Option Notice (the “Option Closing Date”) setting forth the aggregate number of Shares and/or Warrants to be purchased and the time and date for such purchase. Upon exercise of the Option, the Company will become obligated to convey to the Underwriters, and, subject to the terms and conditions set forth herein, the Underwriters will become obligated to purchase, the number of Shares and/or Warrants specified in the Option Notice. If any Option Shares or Option Warrants are to be purchased, each Underwriter agrees, severally and not jointly, to purchase the number of Option Shares or Option Warrants, as applicable (as adjusted by the Representative in such manner as it deems advisable to avoid fractional securities) that bears the same proportion to the number of Firm Units to be purchased by it as set forth on Schedule A opposite such Underwriter’s name as the total number of Option Shares to be purchased bears to the total number of Firm Units.

(c) Underwriters’ Warrants. The Company hereby agrees to issue to the Underwriters (and/or their respective designees) on the Closing Date and each Option Closing Date, as the case may be, Warrants to purchase an aggregate of five percent (5%) of the shares of Common Stock issued at such closing (the “Underwriters’ Warrants”). The Underwriters’ Warrants shall be exercisable, in whole or in part, commencing 180 days after the effective date of the Registration Statement and expiring on the five-year anniversary of the effective date of the Registration Statement, at an initial exercise price of $[    ] per share, which is equal to one hundred percent (100%) of the initial public offering price of the Firm Units issued at such closing. The Underwriters’ Warrants and the shares of Common Stock issuable upon exercise of the Underwriters’ Warrants are hereinafter referred to collectively as the “Underwriters’ Securities.”

2. Delivery and Payment.

(a) Closing. Delivery of the Firm Securities shall be made to the Representative through the facilities of the Depository Trust Company (“DTC”) for the respective accounts of the Underwriters against payment of the Purchase Price by wire transfer of immediately available funds to the order of the Company. Such payment shall be made at 10:00 a.m., New York City time, on the second business day (the third business day, should the Offering be priced after 4:00 p.m., New York City Time) after the date of this Agreement or at such time on such other date, not later than ten business days after such date, as may be agreed upon by the Company and the Representative (such date is hereinafter referred to as the “Closing Date”). Notwithstanding the foregoing, in the case of a Warrant for which an Exercise Notice (as defined therein) is delivered on or prior to 12:00 p.m. (New York City time) on the Closing Date, which such Exercise Notice may be delivered at any time after the time of execution of this Agreement, the Company agrees to deliver the Warrant Shares subject to such notice(s) by 4:00 p.m. (New York City time) on the Closing Date.

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(b) Option Closing. To the extent the Option is exercised, delivery of the Option Securities against payment by the Underwriters (in the manner and at the location specified above) shall take place at the time and date (which may be the Closing Date, but not earlier than the Closing Date) specified in the Option Notice.

(c) Electronic Transfer. Electronic transfer of the Offered Securities shall be made at the time of purchase in such names and in such denominations as the Representative shall specify.

(d) Tax Stamps. The cost of original issue tax stamps, if any, in connection with the issuance and delivery of the Securities by the Company to the Underwriters shall be borne by the Company. The Company shall pay and hold each Underwriter and any subsequent holder of the Securities harmless from any and all liabilities with respect to or resulting from any failure or delay in paying United States federal and state and foreign stamp and other transfer taxes, if any, which may be payable or determined to be payable in connection with the original issuance, sale and delivery to such Underwriter of the Securities.

3. Representations and Warranties of the Company. The Company represents and warrants to, and covenants with, each of the Underwriters as follows:

(a) Compliance with Registration Requirements. A registration statement on Form S-1 (Registration No. 333-259924) relating to the Offered Securities, Warrants and Warrant Shares, including a preliminary prospectus and such amendments to such registration statement as may have been required prior to the date of this Agreement, has been prepared by the Company under the provisions of the Securities Act of 1933, as amended (the “Act”), and the rules and regulations (collectively referred to as the “Rules and Regulations”) of the Securities and Exchange Commission (the “Commission”) thereunder, and has been filed with the Commission. Copies of such registration statement and of each amendment thereto, if any, including the related preliminary prospectuses, heretofore filed by the Company with the Commission have been delivered to the Underwriters. The term “Registration Statement” means such registration statement on Form S-1 as amended at the time it becomes or became effective, including financial statements, all exhibits and any information deemed to be included or incorporated by reference therein, including any information deemed to be included pursuant to Rule 430A or Rule 430B of the Rules and Regulations, as applicable. If the Company files a registration statement to register a portion of the Offered Securities, Warrants or Warrant Shares and relies on Rule 462(b) of the Rules and Regulations for such registration statement to become effective upon filing with the Commission (the “Rule 462 Registration Statement”), then any reference to the “Registration Statement” shall be deemed to include the Rule 462 Registration Statement, as amended from time to time. The term “preliminary prospectus” as used herein means a preliminary prospectus as contemplated by Rule 430 or Rule 430A of the Rules and Regulations included at any time as part of, or deemed to be part of or included in, the Registration Statement. The term “Prospectus” means the final prospectus in connection with this Offering as first filed with the Commission pursuant to Rule 424(b) of the Rules and Regulations or, if no such filing is required, the form of final prospectus included in the Registration Statement at the effective date, except that if any revised prospectus or prospectus supplement shall be provided to the Representative by the Company for use in connection with the Offered Securities which differs from the Prospectus (whether or not such revised prospectus or prospectus supplement is required to be filed by the Company pursuant to Rule 424(b)), the term “Prospectus” shall also refer to such revised prospectus or prospectus supplement, as the case may be, from and after the time it is first provided to the Representative for such use. Any reference herein to the terms “amend”, “amendment” or “supplement” with respect to the Registration Statement, any preliminary prospectus or the Prospectus shall be deemed to refer to and include: (i) the filing of any document under the Securities Exchange Act of 1934, as amended, and together with the rules and regulations promulgated thereunder (collectively, the “Exchange Act”) after the effective date of the Registration Statement, the date of such preliminary prospectus or the date of the Prospectus, as the case may be, which is incorporated therein by reference, and (ii) any such document so filed.

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(b) Effectiveness of Registration. The Registration Statement, any Rule 462 Registration Statement and any post-effective amendment thereto have been declared effective by the Commission under the Act or have become effective pursuant to Rule 462 of the Rules and Regulations. The Company has responded to all requests, if any, of the Commission for additional or supplemental information. No stop order suspending the effectiveness of the Registration Statement or any Rule 462 Registration Statement is in effect and no proceedings for such purpose have been instituted or are pending or, to the knowledge of the Company, are threatened by the Commission.

(c) Accuracy of Registration Statement. Each of the Registration Statement, any Rule 462 Registration Statement and any post-effective amendment thereto, at the time it became effective, when any document filed under the Exchange Act was or is filed and at all subsequent times, complied and will comply in all material respects with the Act and the Rules and Regulations, and did not and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading. The Prospectus, as amended or supplemented, as of its date and at all subsequent times when a prospectus is delivered or required (or, but for the provisions of Rule 172, would be required) by applicable law to be delivered in connection with sales of Securities, complied and will comply in all material respects with the Act, the Exchange Act and the Rules and Regulations, and did not or will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein not misleading, in the light of the circumstances under which they were made. Each preliminary prospectus (including the preliminary prospectus or prospectuses filed as part of the Registration Statement or any amendment thereto) complied when so filed in all material respects with Act, the Exchange Act and the Rules and Regulations, and each preliminary prospectus and the Prospectus delivered to the Representative for use in connection with this Offering is identical to the electronically transmitted copies thereof filed with the Commission on EDGAR, except to the extent permitted by Regulation S-T. The foregoing representations and warranties in this Section 3(c) do not apply to any statements or omissions made in reliance on and in conformity with information relating to the Underwriters furnished in writing to the Company by the Underwriters through the Representative specifically for inclusion in the Registration Statement or Prospectus or any amendment or supplement thereto. For all purposes of this Agreement, the information set forth in the Prospectus (i) in the third paragraph under the caption “Underwriting” setting forth the amount of the selling concession, and (ii) in the thirteenth paragraph under the caption “Underwriting” regarding stabilization, short positions and penalty bids constitutes the only information (the “Underwriters’ Information”) relating to the Underwriters furnished in writing to the Company by the Underwriters through the Representative specifically for inclusion in the preliminary prospectus, the Registration Statement or the Prospectus.

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(d) Company Not Ineligible Issuer. (i) At the time of filing the Registration Statement relating to the Securities and (ii) as of the date of the execution and delivery of this Agreement (with such date being used as the determination date for purposes of this clause (ii)), the Company was not and is not an “ineligible issuer” (as defined in Rule 405 of the Rules and Regulations).

(e) Disclosure at the Time of Sale. As of the Applicable Time, neither (i) the Issuer General Use Free Writing Prospectus(es) (as defined below) issued at or prior to the Applicable Time, the most recent preliminary prospectus related to this Offering, and the information included on Schedule II hereto, all considered together (collectively, the “General Disclosure Package”), nor (ii) any individual Issuer Limited Use Free Writing Prospectus, when considered together with the General Disclosure Package, included any untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The preceding sentence does not apply to statements in or omissions from the General Disclosure Package based upon and in conformity with written information furnished to the Company by the Underwriters through the Representative specifically for use therein, it being understood and agreed that the only such information furnished by the Underwriters consists of the Underwriters’ Information.

As used in this subsection and elsewhere in this Agreement:

“Applicable Time” means 5:00 p.m. (New York City Time) on [Time of Pricing], 2022 or such other time as agreed by the Company and the Representative.

“Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as defined in Rule 433 of the Rules and Regulations, relating to the Offered Securities that (i) is required to be filed with the Commission by the Company, (ii) is “a written communication that is a road show” within the meaning of Rule 433(d)(8)(i), whether or not required to be filed with the Commission or (iii) is exempt from filing pursuant to Rule 433(d)(5)(i) because it contains a description of the Securities or of the Offering that does not reflect the final terms, in each case in the form filed or required to be filed with the Commission or, if not required to be filed, in the form retained in the Company’s records pursuant to Rule 433(g).

“Issuer General Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is intended for general distribution to prospective investors, as evidenced by its being specified in Schedule I hereto.

“Issuer Limited Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is not an Issuer General Use Free Writing Prospectus.

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(f) Issuer Free Writing Prospectuses. Each Issuer Free Writing Prospectus, as of its issue date and at all subsequent times through the Prospectus Delivery Period (as defined below), does not include any information that conflicts with the information contained in the Registration Statement. The foregoing sentence does not apply to statements in or omissions from any Issuer Free Writing Prospectus based upon and in conformity with the Underwriters’ Information. If at any time following the issuance of an Issuer Free Writing Prospectus there occurred an event or development as a result of which such Issuer Free Writing Prospectus conflicted with the information contained in the Registration Statement relating to the Securities or included an untrue statement of material fact or omitted to state a material fact necessary in order to make the statements therein, in light of the circumstances prevailing at that subsequent time, not misleading, the Company has promptly notified the Representative and has promptly amended or supplemented, at its own expense, such Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue statement or omission.

(g) Distribution of Offering Material by the Company. The Company has not distributed and will not distribute, prior to the later of the Closing Date, any Option Closing Date and the completion of the Underwriters’ distribution of the Offered Securities, any offering material in connection with the offering or sale of the Offered Securities, the Registration Statement, the preliminary prospectus, the Permitted Free Writing Prospectuses reviewed and consented to by the Representative and included in Schedule I hereto, and the Prospectus. None of the Marketing Materials, as of their respective issue dates and at all subsequent times through the Prospectus Delivery Period (as defined below), include any information that conflicts with the information contained in the Registration Statement. If at any time following the issuance of any Marketing Material there occurred an event or development as a result of which such Marketing Material conflicted with the information contained in the Registration Statement relating to the Securities or included an untrue statement of material fact or omitted to state a material fact necessary in order to make the statements therein, in light of the circumstances prevailing at that subsequent time, not misleading, the Company has promptly notified the Representative and has promptly amended or supplemented, at its own expense, such Marketing Material to eliminate or correct such conflict, untrue statement or omission.

(h) Subsidiaries. All of the direct and indirect material subsidiaries of the Company (each, a “Subsidiary”) are set forth in the Registration Statement, the General Disclosure Package and the Prospectus. The Company owns, directly or indirectly, all of the capital stock or other equity interests of each Subsidiary free and clear of any lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other similar restriction (each, a “Lien”), and all of the issued and outstanding shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities.

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(i) Organization and Qualification. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither the Company nor any Subsidiary is in violation nor default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, would not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity or enforceability of this Agreement, the Warrant Agreement (as hereinafter defined), the Warrants, the Underwriters’ Warrants, or any other agreement, document, certificate or instrument required to be delivered pursuant to this Agreement (collectively, the “Transaction Documents”), (ii) a material adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse effect on the Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse Effect”) and no action, claim, suit or proceeding (including, without limitation, a partial proceeding, such as a deposition), whether commenced or threatened (each, a “Proceeding”) has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.

(j) Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement and each of the other Transaction Documents by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company, the Board of Directors or the Company’s stockholders in connection herewith or therewith other than in connection with the Required Approvals (as hereinafter defined in Section 3(l)). This Agreement and each other Transaction Document to which it is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, assuming due authorization, execution and delivery by the Representative, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

(k) No Conflicts. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to which it is a party, the issuance and sale of the Securities and the consummation by it of the transactions contemplated hereby and thereby do not and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as would not have or reasonably be expected to result in a Material Adverse Effect.

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(l) Filings, Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i) the filing with the Commission of the Registration Statement and the Prospectus, (ii) application(s) to the Nasdaq Capital Market for the listing of the Securities for trading thereon in the time and manner required thereby, (iii) such filings, if any, as are required to be made under applicable state securities laws, (iv) such notices, filings or authorizations as are required to be obtained or made under applicable rules of the Financial Industry Regulatory Authority, Inc. (“FINRA”) and The Nasdaq Stock Market, and (v) such notices, filings or authorizations as have been obtained, given or made as of the date hereof (collectively, the “Required Approvals”).

(m) [Reserved.]

(n) Issuance of the Securities. The Securities are duly authorized and, when issued and paid for in accordance with the applicable Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company. The Company has reserved from its duly authorized capital stock the maximum number of Shares issuable pursuant to this Agreement.

(o) Capitalization. The capitalization of the Company as of the date hereof is as set forth in the Registration Statement, the General Disclosure Package and the Prospectus. The Company has not issued any capital stock since its most recently filed periodic report under the Exchange Act, other than pursuant to the Company’s equity incentive plans, the issuance of Shares to employees, directors or consultants pursuant to the Company’s equity incentive plans and pursuant to the conversion and/or exercise of any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Shares, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Shares (“Common Stock Equivalents”) and is outstanding as of the date of the most recently filed periodic report under the Exchange Act. No 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 (each, a “Person”) has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents. Except as a result of the purchase and sale of the Securities or as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, any Shares or the capital stock of any Subsidiary, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional Shares or Common Stock Equivalents or capital stock of any Subsidiary. The issuance and sale of the Securities will not obligate the Company or any Subsidiary to issue Shares or other securities to any Person (other than the Underwriters) and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under any of such securities. There are no securities of the Company or any Subsidiary that have any anti-dilution or similar adjustment rights (other than adjustments for stock splits, recapitalizations, and the like) to the exercise or conversion price, have any exchange rights, or reset rights. Except as set forth in the Registration Statement, the General Disclosure Package and the Prospectus, there are no outstanding securities or instruments of the Company or any Subsidiary that contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to redeem a security of the Company or such Subsidiary. The Company does not have any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement. All of the outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable, have been issued in compliance in all material respects with all federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. No further approval or authorization of any stockholder, the Board of Directors or others is required for the issuance and sale of the Securities. There are no stockholders agreements, voting agreements or other similar agreements with respect to the Company’s capital stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s stockholders.

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(p) SEC Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for such period as the Company was required by law or regulation to file such material (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, together with the Registration Statement, the General Disclosure Package and the Prospectus, being collectively referred to herein as the “SEC Reports”) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The Company has never been an issuer subject to Rule 144(i) under the Securities Act. The financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company and its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments. The agreements and documents described in the SEC Reports conform to the descriptions thereof contained therein and there are no agreements or other documents required by the Securities Act and the rules and regulations thereunder to be described in the SEC Reports or to be filed with the Commission as exhibits to the Registration Statement, that have not been so described or filed. Each agreement or other instrument (however characterized or described) to which the Company is a party or by which it is or may be bound or affected and (i) that is referred to in the SEC Reports, or (ii) is material to the Company’s business, has been duly authorized and validly executed by the Company, is in full force and effect in all material respects and is enforceable against the Company and, to the Company’s knowledge, the other parties thereto, in accordance with its terms, except (x) as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally, (y) as enforceability of any indemnification or contribution provision may be limited under the federal and state securities laws, and (z) that the remedy of specific performance and injunctive and other forms of equitable relief may be subject to the equitable defenses and to the discretion of the court before which any proceeding therefore may be brought. Except as disclosed in the SEC Reports, none of such agreements or instruments has been assigned by the Company, and neither the Company nor, to the best of the Company’s knowledge, any other party is in default thereunder and, to the best of the Company’s knowledge, no event has occurred that, with the lapse of time or the giving of notice, or both, would constitute a default thereunder. To the best of the Company’s knowledge, performance by the Company of the material provisions of such agreements or instruments will not result in a violation of any existing applicable law, rule, regulation, judgment, order or decree of any governmental agency or court, domestic or foreign, having jurisdiction over the Company or any of its assets or businesses, including, without limitation, those relating to environmental laws and regulations.

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(q) Material Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements included within the SEC Reports, except as reflected or specifically disclosed in a subsequent SEC Report filed prior to the date hereof, (i) there has been no event, occurrence or development that has had or that would reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any material liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or disclosed in filings made with the Commission, (iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock and (v) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company equity incentive plans or as set forth in the Registration Statement, the General Disclosure Package and the Prospectus. The Company does not have pending before the Commission any request for confidential treatment of information. Except for the issuance of the Securities contemplated by this Agreement, no event, liability, fact, circumstance, occurrence or development has occurred or exists or is reasonably expected to occur or exist with respect to the Company or its Subsidiaries or their respective businesses, prospects, properties, operations, assets or financial condition that would be required to be disclosed by the Company under applicable securities laws at the time this representation is made or deemed made that has not been publicly disclosed at least 1 Trading Day prior to the date that this representation is made.

(r) Litigation. There is no action, suit, inquiry, notice of violation or proceeding pending or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”) which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Securities or (ii) would, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. Except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, neither the Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty. There has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the Commission involving the Company or any current or former director or officer of the Company. The Commission has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange Act or the Securities Act.

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(s) Labor Relations. No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of the Company, which would reasonably be expected to result in a Material Adverse Effect. None of the Company’s or its Subsidiaries’ employees is a member of a union that relates to such employee’s relationship with the Company or such Subsidiary, and neither the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe that their relationships with their employees are good. To the knowledge of the Company, no executive officer of the Company or any Subsidiary, is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of any third party, and the continued employment of each such executive officer does not subject the Company or any of its Subsidiaries to any liability with respect to any of the foregoing matters. The Company and its Subsidiaries are in compliance with all U.S. federal, state, local and foreign laws and regulations relating to employment and employment practices, terms and conditions of employment and wages and hours, except where the failure to be in compliance would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(t) Compliance. Except as disclosed in the SEC Reports and except as set forth in the Registration Statement, the General Disclosure Package and the Prospectus, neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation of any judgment, decree or order of any court, arbitrator or other governmental authority or (iii) is or has been in violation of any statute, rule, ordinance or regulation of any governmental authority, including, without limitation, all foreign, federal, state and local laws relating to taxes, environmental protection, occupational health and safety, product quality and safety and employment and labor matters, except in each case as would not have or reasonably be expected to result in a Material Adverse Effect.

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(u) Environmental Laws. The Company and its Subsidiaries (i) are in compliance in all material respects with all federal, state, local and foreign laws relating to pollution or protection of human health or the environment (including ambient air, surface water, groundwater, land surface or subsurface strata), including laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands, or demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations, issued, entered, promulgated or approved thereunder (“Environmental Laws”); (ii) have received all permits licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses; and (iii) are in compliance with all terms and conditions of any such permit, license or approval where in each clause (i), (ii) and (iii), the failure to so comply would be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect.

(v) Regulatory Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports, except where the failure to possess such permits would not reasonably be expected to result in a Material Adverse Effect (“Material Permits”), and neither the Company nor any Subsidiary has received any written notice of proceedings relating to the revocation or modification of any Material Permit.

(w) Title to Assets. The Company and its Subsidiaries have good and marketable title to all real property owned by them, if any, and good and marketable title in all personal property owned by them, in each case, that is material to the business of the Company and the Subsidiaries, and in such case free and clear of all Liens, except for Liens that (i) are described in the Registration Statement, the General Disclosure Package and the Prospectus, (ii) would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, (iii) do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries, or (iv) are for the payment of federal, state or other taxes, for which appropriate reserves have been made therefor in accordance with GAAP and, the payment of which is neither delinquent nor subject to penalties. Any real property and facilities held under lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases with which the Company and the Subsidiaries are in compliance in all material respects.

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(x) Intellectual Property. To the knowledge of the Company, the Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights necessary or required for use in connection with their respective businesses as described in the SEC Reports and which the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”). None of, and neither the Company nor any Subsidiary has received a notice (written or otherwise) that any of, the Intellectual Property Rights has expired, terminated or been abandoned, or is expected to expire or be abandoned, within two (2) years from the date of this Agreement, except where such action would not reasonably be expected to have a Material Adverse Effect. Neither the Company nor any Subsidiary has received, since the date of the latest audited financial statements included within the SEC Reports, a written notice of a claim or otherwise has any knowledge that the Intellectual Property Rights violate or infringe upon the rights of any Person, except as would not have or reasonably be expected to not have a Material Adverse Effect. To the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights. The Company and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all of their intellectual properties, except where failure to do so would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The Company has no knowledge that it lacks or will be unable to obtain any rights or licenses to use all Intellectual Property Rights that are necessary to conduct its business.

(y) Insurance. The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, including, but not limited to, directors and officers insurance coverage at least equal to the aggregate Purchase Price. Neither the Company nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without a significant increase in cost.

(z) Transactions With Affiliates and Employees. Except as set forth in the SEC Reports, none of the officers or directors of the Company or any Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary is presently a party to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, providing for the borrowing of money from or lending of money to or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee, stockholder, member or partner, in each case in excess of $120,000 other than for (i) payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company and (iii) other employee benefits, including stock option agreements under any stock option plan of the Company.

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(aa) Sarbanes-Oxley; Internal Accounting Controls. The Company and the Subsidiaries are in compliance with any and all applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective and applicable to the Company as of the date hereof, and any and all applicable rules and regulations promulgated by the Commission thereunder that are effective as of the date hereof and as of the Closing Date or the Option Closing Date, as applicable. Except as set forth in the SEC Reports, the Company and the Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that: (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company and the Subsidiaries have established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and the Subsidiaries and designed such disclosure controls and procedures to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. The Company’s certifying officers have evaluated the effectiveness of the disclosure controls and procedures of the Company and the Subsidiaries as of the end of the period covered by the most recently filed periodic report under the Exchange Act (such date, the “Evaluation Date”).

(bb) Certain Fees; FINRA Affiliation. Except as set forth in the Registration Statement, the General Disclosure Package and the Prospectus, no brokerage or finder’s fees or commissions are or will be payable by the Company or any Subsidiary to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents. To the Company’s knowledge, there are no other arrangements, agreements or understandings of the Company or, to the Company’s knowledge, any of its stockholders that may affect the Underwriters’ compensation, as determined by FINRA. The Company has not made any direct or indirect payments (in cash, securities or otherwise) to (i) any person, as a finder’s fee, investing fee or otherwise, in consideration of such person raising capital for the Company or introducing to the Company persons who provided capital to the Company, (ii) any FINRA member, or (iii) any person or entity that has any direct or indirect affiliation or association with any FINRA member within the 12-month period prior to the date on which the Registration Statement was filed with the Commission (the “Filing Date”) or thereafter. To the Company’s knowledge, no (i) officer or director of the Company or its subsidiaries, (ii) owner of 5% or more of the Company’s unregistered securities or that of its subsidiaries or (iii) owner of any amount of the Company’s unregistered securities acquired within the 180-day period prior to the Filing Date, has any direct or indirect affiliation or association with any FINRA member. The Company will advise the Underwriters and their respective counsel if it becomes aware that any officer, director or stockholder of the Company or its subsidiaries is or becomes an affiliate or associated person of a FINRA member participating in the Offering.

(cc) Investment Company. The Company is not, and is not an affiliate of, and immediately after receipt of payment for the Offered Securities, will not be or be an affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

(dd) Registration Rights. Except as set forth in the Registration Statement, the General Disclosure Package and the Prospectus, no Person has any right to cause the Company or any Subsidiary to effect the registration under the Securities Act of any securities of the Company or any Subsidiary.

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(ee) Listing and Maintenance Requirements. The Shares are registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Shares under the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating such registration. Except as disclosed in the SEC Reports, the Company has not, in the 12 months preceding the date hereof, received notice from the Nasdaq Capital Market to the effect that the Company is not in compliance with the listing or maintenance requirements of such the Nasdaq Capital Market. Except as disclosed in the SEC Reports, the Company is, and has no reason to believe that it will not in the foreseeable future continue to be, in compliance with all such listing and maintenance requirements. The Shares are currently eligible for electronic transfer through the Depository Trust Company or another established clearing corporation and the Company is current in payment of the fees to the Depository Trust Company (or such other established clearing corporation) in connection with such electronic transfer. The issuance and sale of the Securities hereunder does not contravene the rules and regulations of The Nasdaq Stock Market.

(ff) [Reserved.]

(gg) No Integrated Offering. Neither the Company or any Person acting on its behalf, nor, to the Company’s knowledge, any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with the Company (as such terms are used in and construed under Rule 405 under the Securities Act) (each, an “Affiliate”) or any Person acting on their behalf, has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the Offered Securities to be integrated with prior offerings by the Company for purposes of any applicable shareholder approval provisions of The Nasdaq Stock Market.

(hh) Solvency. Based on the consolidated financial condition of the Company as of the Closing Date and as of the Option Closing Date, after giving effect to the receipt by the Company of the proceeds from the sale of the Offered Securities hereunder, the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate all of its assets, after taking into account all anticipated uses of the cash, may be insufficient to pay all amounts on or in respect of its liabilities when such amounts are required to be paid. The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt). Except as set forth in the Registration Statement, the General Disclosure Package and the Prospectus, the Company has no knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction within one year from the Closing Date or the Option Closing Date, as applicable. The Registration Statement, the General Disclosure Package and the Prospectus sets forth as of the date hereof all outstanding secured and unsecured Indebtedness of the Company or any Subsidiary, or for which the Company or any Subsidiary has commitments. For the purposes of this Agreement, “Indebtedness” means (x) any liabilities for borrowed money or amounts owed in excess of $50,000 (other than trade accounts payable incurred in the ordinary course of business), (y) all guaranties, endorsements and other contingent obligations in respect of indebtedness of others, whether or not the same are or should be reflected in the Company’s consolidated balance sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business; and (z) the present value of any lease payments in excess of $50,000 due under leases required to be capitalized in accordance with GAAP. Except as set forth in the Registration Statement, the General Disclosure Package and the Prospectus, neither the Company nor any Subsidiary is in default with respect to any Indebtedness.

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(ii) Tax Status. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect, each of the Company and its Subsidiaries (i) has made or filed all United States federal, state and local income and all foreign income and franchise tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations and (iii) has set aside on its books provision reasonably adequate for the payment of all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company or of any Subsidiary know of no basis for any such claim.

(jj) Foreign Corrupt Practices. Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary, any agent or other person acting on behalf of the Company or any Subsidiary, has (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by the Company or any Subsidiary (or made by any person acting on its behalf of which the Company is aware) which is in violation of law, or (iv) violated in any material respect any provision of Foreign Corrupt Practices Act of 1977, as amended.

(kk) Accountants. The Company’s accounting firm is Benjamin & Ko (the “Accountants”). To the knowledge and belief of the Company, such accounting firm (i) is a registered public accounting firm as required by the Exchange Act and (ii) shall express its opinion with respect to the financial statements to be included in the Company’s Annual Report for the fiscal year ending December 31, 2021.

(ll) Regulation M Compliance. The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of any of the Securities, (ii) sold, bid for, purchased, or, paid any compensation for soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities of the Company, other than, in the case of clauses (ii) and (iii), compensation paid to the Underwriters in connection with the Offering.

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(mm) [Reserved.]

(nn) Office of Foreign Assets Control. Neither the Company nor any Subsidiary nor, to the Company’s knowledge, any director, officer, agent, employee or Affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”).

(oo) U.S. Real Property Holding Corporation. The Company is not and has never been a U.S. real property holding corporation within the meaning of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon the Representative’s request.

(pp) Bank Holding Company Act. Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding Company Act of 1956, as amended (the “BHCA”), and to regulation by the Board of Governors of the Federal Reserve System (the “Federal Reserve”). Neither the Company nor any of its Subsidiaries or Affiliates owns or controls, directly or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent or more of the total equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither the Company nor any of its Subsidiaries or Affiliates exercises a controlling influence over the management or policies of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve.

(qq) Money Laundering. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the “Money Laundering Laws”), and no Action or Proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge of the Company or any Subsidiary, threatened.

(rr) Share Option Plans. Each share option granted by the Company under the Company’s share option plans was granted (i) in accordance with the terms of the Company’s share option plans and (ii) with an exercise price at least equal to the fair market value of the Shares on the date such share option would be considered granted under GAAP and applicable law. No share option granted under the Company’s share option plan has been backdated. The Company has not knowingly granted, and there is no and has been no Company policy or practice to knowingly grant, share options prior to, or otherwise knowingly coordinate the grant of share options with, the release or other public announcement of material information regarding the Company or its Subsidiaries or their financial results or prospects.

(ss) Officer’s Certificates. Any certificate signed by any officer of the Company or any of its Subsidiaries delivered to the Representative or its counsel shall be deemed a representation and warranty by the Company to the Underwriters as to the matters covered thereby.

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4. Agreements of the Company. The Company agrees with the Underwriters as follows:

(a) Amendments and Supplements to Registration Statement. The Company shall not, either prior to any effective date or thereafter during such period as the Prospectus is required by law to be delivered (whether physically or through compliance with Rule 172 of the Rules and Regulations or any similar rule) (the “Prospectus Delivery Period”) in connection with sales of the Securities by an Underwriter or dealer, amend or supplement the Registration Statement, the General Disclosure Package or the Prospectus, unless a copy of such amendment or supplement thereof shall first have been submitted to the Representative within a reasonable period of time prior to the filing or, if no filing is required, the use thereof and the Representative shall not have objected thereto in good faith.

(b) Amendments and Supplements to the Registration Statement, the General Disclosure Package, and the Prospectus and Other Securities Act Matters. During the Prospectus Delivery Period, the Company will comply with all requirements imposed upon it by the Securities Act, as now and hereafter amended, and by the Rules and Regulations, as from time to time in force, and by the Exchange Act so far as necessary to permit the continuance of sales of or dealings in the Securities as contemplated by the provisions hereof, the General Disclosure Package, the Registration Statement and the Prospectus. If, during the Prospectus Delivery Period, any event or development shall occur or condition exist as a result of which the General Disclosure Package or the Prospectus, as then amended or supplemented, would include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances then prevailing or under which they were made, as the case may be, not misleading, or if it shall be necessary to amend or supplement the General Disclosure Package or the Prospectus in order to make the statements therein, in the light of the circumstances then prevailing or under which they were made, as the case may be, not misleading, or if in the opinion of the Representative it is otherwise necessary to amend or supplement the Registration Statement, the General Disclosure Package or the Prospectus, or to file a new registration statement containing the Prospectus, in order to comply with the Act, the Rules and Regulations, the Exchange Act or the Exchange Act Rules, including in connection with the delivery of the Prospectus, the Company agrees to (i) promptly notify the Representative of any such event or condition and (ii) promptly prepare (subject to Section 4(a) and 4(f) hereof), file with the Commission (and use its best efforts to have any amendment to the Registration Statement or any new registration statement to be declared effective) and furnish at its own expense to the Representative (and, if applicable, to dealers), amendments or supplements to the Registration Statement, the General Disclosure Package or the Prospectus, or any new registration statement, necessary in order to make the statements in the General Disclosure Package or the Prospectus as so amended or supplemented, in the light of the circumstances then prevailing or under which they were made, as the case may be, not misleading, or so that the Registration Statement or the Prospectus, as amended or supplemented, will comply with the Act, the Rules and Regulations, the Exchange Act or the Exchange Act Rules or any other applicable law.

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(c) Notifications to the Underwriters. The Company shall use its best efforts to cause the Registration Statement to become effective, and shall notify the Representative promptly, and shall confirm such advice in writing, (i) when any post-effective amendment to the Registration Statement has become effective and when any post-effective amendment thereto becomes effective, (ii) of any request by the Commission for amendments or supplements to the Registration Statement or the Prospectus or for additional information, (iii) of the commencement by the Commission or by any state securities commission of any proceedings for the suspension of the qualification of any of the Offered Securities for offering or sale in any jurisdiction or of the initiation, or the threatening, of any proceeding for that purpose, including, without limitation, the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose or the threat thereof, (iv) of the happening of any event during the Prospectus Delivery Period that in the judgment of the Company makes any statement made in the Registration Statement or the Prospectus misleading (including by omission) or untrue or that requires the making of any changes in the Registration Statement or the Prospectus in order to make the statements therein, in light of the circumstances in which they are made, not misleading (including by omission), and (v) of receipt by the Company or any representative of the Company of any other communication from the Commission relating to the Company, the Registration Statement, any preliminary prospectus or the Prospectus. If at any time the Commission shall issue any order suspending the effectiveness of the Registration Statement, the Company shall use best efforts to obtain the withdrawal of such order at the earliest possible moment. The Company shall comply with the provisions of and make all requisite filings with the Commission pursuant to Rules 424(b), 430A, 430B and 462(b) of the Rules and Regulations and to notify the Representative promptly of all such filings.

(d) Executed Registration Statement. The Company shall furnish to the Representative, without charge, one signed copy of the Registration Statement, and of any post-effective amendment thereto, including financial statements and schedules, and all exhibits thereto, and shall furnish to the Representative, without charge, a copy of the Registration Statement and any post-effective amendment thereto, including financial statements and schedules but without exhibits.

(e) Undertakings. The Company shall comply with all the provisions of any undertakings contained and required to be contained in the Registration Statement.

(f) Prospectus. The Company shall prepare the Prospectus in a form approved by the Representative and shall file such Prospectus with the Commission pursuant to Rule 424(b) of the Rules and Regulations with a filing date not later than the second business day following the execution and delivery of this Agreement. Promptly after the effective date of the Registration Statement, and thereafter from time to time during the period when the Prospectus is required (or, but for the provisions of Rule 172 under the Act, would be required) to be delivered, the Company shall deliver to the Representative, without charge, as many electronic copies of the Prospectus and any amendment or supplement thereto as the Representative may reasonably request. The Company consents to the use of the Prospectus and any amendment or supplement thereto by the Representative and by all dealers to whom the Offered Securities may be sold, both in connection with the offering or sale of the Offered Securities and for any period of time thereafter during the Prospectus Delivery Period. If, during the Prospectus Delivery Period any event shall occur that in the judgment of the Company or counsel to the Underwriters should be set forth in the Prospectus in order to make any statement therein, in the light of the circumstances under which it was made, not misleading (including by omission), or if it is necessary to supplement or amend the Prospectus to comply with law, the Company shall forthwith prepare and duly file with the Commission an appropriate supplement or amendment thereto, and shall deliver to the Representative, without charge, such number of electronic copies thereof as the Representative may reasonably request.

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(g) Permitted Free Writing Prospectuses. The Company represents and agrees that it has not made and, unless it obtains the prior consent of the Representative, will not make, any offer relating to the Offered Securities that would constitute a “free writing prospectus” as defined in Rule 405 of the Rules and Regulations, required to be filed with the Commission or retained by the Company under Rule 433 of the Rules and Regulations; provided that the prior written consent of the Representative hereto shall be deemed to have been given in respect of the Issuer Free Writing Prospectuses included in Schedule I hereto. Any such free writing prospectus consented to by the Representative is herein referred to as a “Permitted Free Writing Prospectus.” The Company agrees that (i) it has treated and will treat, as the case may be, each Permitted Free Writing Prospectus as an Issuer Free Writing Prospectus, and (ii) has complied and will comply, as the case may be, with the requirements of Rules 164 and 433 of the Act applicable to any Permitted Free Writing Prospectus, including in respect of timely filing with the Commission, legending and record keeping. If at any time following the issuance of an Issuer Free Writing Prospectus there occurs an event or development as a result of which such Issuer Free Writing Prospectus would conflict with the information contained in the Registration Statement relating to the Offered Securities or would include an untrue statement of material fact or would omit to state a material fact necessary in order to make the statements therein, in light of the circumstances prevailing at that subsequent time, not misleading, the Company will promptly notify the Representative and will promptly amend or supplement, at its own expense, such Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue statement, or omission. The Company represents that it has satisfied and agrees that it will satisfy the conditions in Rule 433 to avoid a requirement to file with the Commission any electronic road show.

(h) Compliance with Blue Sky Laws. Prior to any public offering of the Securities by the Underwriters, the Company shall cooperate with the Representative and counsel to the Underwriters in connection with the registration or qualification (or the obtaining of exemptions from the application thereof) of the Offered Securities for offer and sale under the securities or Blue Sky laws of such jurisdictions as the Representative may request limitation, provided, however, that in no event shall the Company be obligated to qualify a public offering outside the United States or to do business as a foreign corporation in any jurisdiction where it is not now so qualified, to qualify or register as a dealer in securities, to take any action which would subject it to general service of process in any jurisdiction where it is not now so subject or subject itself to ongoing taxation in respect of doing business in any jurisdiction in which it is not so subject.

(i) Delivery of Financial Statements. During the period of five years commencing on the effective date of the Registration Statement applicable to the Underwriters, the Company shall furnish to the Representative and each other Underwriter who may so request copies of such financial statements and other periodic and special reports as the Company may from time to time distribute generally to the holders of any class of its capital stock, and will furnish to the Representative and each other Underwriter who may so request a copy of each annual or other report it shall be required to file with the Commission; provided, however, that the availability of electronically transmitted copies filed with the Commission pursuant to EDGAR shall satisfy the Company’s obligation to furnish copies hereunder.

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(j) Availability of Earnings Statements. The Company shall make generally available to holders of its securities as soon as may be practicable but in no event later than the last day of the fifteenth (15^th) full calendar month following the calendar quarter in which the most recent effective date occurs in accordance with Rule 158 of the Rules and Regulations, an earnings statement (which need not be audited but shall be in reasonable detail) for a period of twelve (12) months ended commencing after the effective date, and satisfying the provisions of Section 11(a) of the Act (including Rule 158 of the Rules and Regulations).

(k) Consideration; Payment of Expenses. In consideration of the services to be provided for hereunder, the Underwriters or their respective designees their pro rata portion (based on the Securities purchased) of the following aggregate compensation with respect to the Offered Securities they are offering plus any other funds remitted by the Company to pay costs and expenses that are incurred by the Underwriters (including Underwriters’ counsel’s fees and expenses) (“Additional Advanced Amounts”).

(i) An underwriting discount equal to eight percent (8%) of the aggregate gross proceeds raised in the Offering;

(ii) The Underwriters’ Warrants; and

(iii) The Representative reserves the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event that a determination shall be made by FINRA to the effect that the Underwriters’ aggregate compensation is in excess of FINRA rules or that the terms thereof require adjustment.

(iv) Whether or not the transactions contemplated by this Agreement, the Registration Statement and the Prospectus are consummated or this Agreement is terminated, the Company hereby agrees to pay the following:

(1) all expenses in connection with the preparation, printing, formatting for EDGAR and filing of the Registration Statement, any Preliminary Prospectus and the Prospectus and any and all exhibits, amendments and supplements thereto and the mailing and delivering of copies thereof to the Underwriters and dealers;

(2) all filing fees in connection with filings with FINRA’s Public Offering System;

(3) all fees, disbursements and expenses of the Company’s counsel, accountants and other agents and representatives in connection with the registration of the Securities under the Act and the Offering;

(4) all expenses in connection with the qualifications of the Securities for offering and sale under state or foreign securities or blue sky laws (including, without limitation, all filing and registration fees, and the fees and disbursements of Underwriters’ counsel;

(5) all fees and expenses in connection with listing the Securities on a national securities exchange;

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(6) all expenses, including travel and lodging expenses, of the Company’s officers, directors and employees and any other expense of the Company incurred in connection with attending or hosting meetings with prospective purchasers of the Securities and any fees and expenses associated with the i-Deal system and NetRoadshow;

(7) any stock transfer taxes or other taxes incurred in connection with this Agreement or the offering, including any stock transfer taxes payable upon the transfer of securities to the Underwriters;

(8) the costs associated with preparing, printing and delivering certificates representing the Securities;

(9) the cost and charges of any transfer agent or registrar for the Securities;

(10) subject to the following proviso, other costs (including Underwriters’ counsel’s fees and expenses) and expenses incident to the Offering that are not otherwise specifically provided for in this Section 4(k);

(11) costs relating to background checks of the Company’s officers and directors;

provided, however, that all such costs and expenses (including Underwriters’ counsel’s fees and expenses) that are incurred by the Underwriters shall not exceed $150,000 in the aggregate.

(l) Non-accountable Expenses. The Company further agrees that, in addition to the expenses payable pursuant to Section 4(k), on the Closing Date it shall pay to the Representative, by deduction from the net proceeds of the Offering contemplated herein, a non-accountable expense allowance equal to one percent (1.0%) of the aggregate gross proceeds raised in the Offering, provided, however, that in the event that the Offering is terminated, the Company agrees to reimburse the Underwriters pursuant to Section 4(m) hereof.

(m) Reimbursement of Expenses upon Termination of Agreement. If this Agreement shall be terminated by the Company pursuant to any of the provisions hereof or if for any reason the Company shall be unable to perform its obligations or to fulfill any conditions hereunder, or if the Underwriters shall terminate this Agreement pursuant to the last paragraph of Section 5, Section 7(a), Section 7(e) or Section 7(f), the Company shall reimburse the Underwriters for all reasonable accountable out-of-pocket expenses (including the reasonable fees, disbursements and other charges of counsel to the Underwriter) actually incurred by the Underwriters in connection herewith and as allowed under FINRA Rule 5110; provided, however, that the maximum amount of costs and expenses to be reimbursed by Company to the Underwriters pursuant to this Section 4(m) shall not exceed $50,000 (including the reasonable fees, disbursements and other charges of counsel to the Underwriters). Any amount payable to the Underwriters pursuant to this Section 4(m) shall be deducted from an amount equal to the Additional Advanced Amounts with the balance to be remitted by the Representative to the Company within ten days following the termination of this Agreement.

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(n) No Stabilization or Manipulation. The Company shall not at any time, directly or indirectly, take any action intended to cause or result in, or which might reasonably be expected to cause or result in, or which will constitute, stabilization or manipulation, under the Act or otherwise, of the price of the Shares or the Securities to facilitate the sale or resale of any of the Securities.

(o) Use of Proceeds. The Company shall apply the net proceeds from the offering and sale of the Securities to be sold by the Company in the manner set forth in the General Disclosure Package and the Prospectus under “Use of Proceeds” and shall file such reports with the Commission with respect to the sale of the Securities and the application of the proceeds therefrom as may be required in accordance with Rule 463 under the Act.

(p) Lock-Up Agreements of Company, Management and Affiliates. The Company shall not, for a period of three hundred and sixty (360) days after the Closing Date (the “Lock-Up Period”), without the prior written consent of EF Hutton (which consent may be withheld in its sole discretion), (1) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, or file with the Commission a registration statement under the Act to register, any Shares, warrants, or any securities convertible into or exercisable or exchangeable for Shares or (2) enter into any swap or other derivatives transaction that transfers to another, in whole or in part, directly or indirectly, any of the economic benefits or risks of ownership of Shares, or Warrants, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of Shares, Warrants or other securities, in cash or otherwise, or publicly disclose the intention to enter into any transaction described in clause (1) or (2) above. The foregoing sentence shall not apply to (A) the Securities to be sold hereunder, (B) any Shares issued pursuant to a trading plan established prior to July 1, 2020 pursuant to Rule 10b5-1 of the Exchange Act, (C) the issuance of Shares upon the exercise or conversion of options, warrants or other convertible securities outstanding, and as in effect, on the date of this Agreement, and (D) any Shares, dividend equivalent rights or other equity based awards issued, or options to purchase Shares granted, pursuant to existing employee benefit plans of the Company referred to in the Registration Statement, the General Disclosure Package or the Prospectus (including the filing of a registration statement on Form S-8 relating to such existing employee benefit plans of the Company referred to in the Registration Statement, the General Disclosure Package or the Prospectus). The Company has caused each of its officers and directors to enter into agreements with the Representative in the form set forth in Exhibit A.

(q) Lock-Up Releases. If EF Hutton, in its sole discretion, agrees to release or waive the restrictions set forth in a lock-up letter described in Section 4(p) hereof for an officer or director of the Company and provides the Company with notice of the impending release or waiver at least three business days before the effective date of the release or waiver, the Company agrees to announce the impending release or waiver by a press release substantially in the form of Exhibit B hereto through a major news service at least two business days before the effective date of such release or waiver, or any other method that satisfies the obligations described in FINRA Rule 5131(d)(2) at least two business days before the effective date of the release or waiver.

(r) NASDAQ listing. The Company will use its reasonable best efforts to effect and maintain the listing of the Shares on the NASDAQ Capital Market for at least three (3) years after the Closing Date.

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(s) The Company shall use its reasonable best efforts to maintain the effectiveness of the Registration Statement and a current Prospectus relating thereto for as long as the Warrants and the Underwriters’ Warrants remain outstanding. During any period when the Company fails to have maintained an effective Registration Statement or a current Prospectus relating thereto and a holder of a Warrant or Underwriters’ Warrants desires to exercise such warrant and, in the opinion of counsel to the holder, Rule 144 is not available as an exemption from registration for the resale of the Warrant Shares, the Company shall promptly file a registration statement registering the resale of the Warrant Shares and use its reasonable best efforts to have it declared effective by the Commission within thirty (30) days.

(t) Variable Rate Transactions. From the date hereof through and including the one year anniversary of the Closing Date, neither the Company nor any Subsidiary shall enter into, announce the entering into, or proposed entering into, a Variable Rate Transaction. For purposes hereof, a “Variable Rate Transaction” shall mean, collectively, an “Equity Line of Credit” or similar agreement, or a Variable Priced Equity Linked Instrument. For purposes hereof, “Equity Line of Credit” means any transaction involving a written agreement between the Company and an investor or underwriter whereby the Company has the right to “put” its securities to the investor or underwriter over an agreed period of time and at future determined price or price formula (other than customary “preemptive” or “participation” rights or “weighted average” or “full-ratchet” anti-dilution provisions or in connection with fixed-price rights offerings and similar transactions that are not Variable Priced Equity Linked Instruments), and “Variable Priced Equity Linked Instruments” means: (A) any debt or equity securities which are convertible into, exercisable or exchangeable for, or carry the right to receive additional Shares either (1) at any conversion, exercise or exchange rate or other price that is based upon and/or varies with the trading prices of or quotations for Shares at any time after the initial issuance of such debt or equity security, or (2) with a conversion, exercise or exchange price that is subject to being reset on more than one occasion at some future date at any time after the initial issuance of such debt or equity security due to a change in the market price of the Shares since date of initial issuance (other than customary “preemptive” or “participation” rights or “weighted average” or “full-ratchet” anti-dilution provisions or in connection with fixed-price rights offerings and similar transactions), and (B) any amortizing convertible security which amortizes prior to its maturity date, where the Company is required or has the option to (or any investor in such transaction has the option to require the Company to) make such amortization payments in Shares which are valued at a price that is based upon and/or varies with the trading prices of or quotations for Shares at any time after the initial issuance of such debt or equity security (whether or not such payments in stock are subject to certain equity conditions). For the avoidance of doubt, the foregoing shall not prevent the Company from conducting “at-the-market” offerings or similar equity distribution programs.

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5. Conditions of the Obligations of the Underwriters. The obligation of the Underwriters to purchase the Firm Securities on the Closing Date or the Option Securities on the Option Closing Date, as the case may be, as provided herein is subject to the accuracy of the representations and warranties of the Company, the performance by the Company of its covenants and other obligations hereunder and to the following additional conditions:

(a) Post Effective Amendments and Prospectus Filings. Notification that the Registration Statement has become effective shall be received by the Representative not later than 4:30 p.m., New York City time, on the date of this Agreement or at such later date and time as shall be consented to in writing by the Representative and all filings made pursuant to Rules 424, 430A, or 430B of the Rules and Regulations, as applicable, shall have been made or will be made prior to the Closing Date in accordance with all such applicable rules.

(b) No Stop Orders, Requests for Information and No Amendments. (i) No stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceedings for that purpose shall be pending or are, to the knowledge of the Company, threatened by the Commission, (ii) no order suspending the qualification or registration of the Offered Securities under the securities or Blue Sky laws of any jurisdiction shall be in effect and no proceeding for such purpose shall be pending before or threatened or contemplated by the authorities of any such jurisdiction, (iii) any request for additional information on the part of the staff of the Commission or any such authorities shall have been complied with to the satisfaction of the staff of the Commission or such authorities and (iv) after the date hereof no amendment or supplement to the Registration Statement or the Prospectus shall have been filed unless a copy thereof was first submitted to the Representative and the Representative did not object thereto in good faith, and the Representative shall have received certificates, dated the Closing Date and the Option Closing Date and signed by the Chief Executive Officer or the Chairman of the Board of Directors and the Chief Financial Officer of the Company in their capacities as such, and not individually, (who may, as to proceedings threatened, certify to their knowledge), to the effect of clauses (i), (ii) and (iii).

(c) No Material Adverse Changes. Since the respective dates as of which information is given in the Registration Statement and the Prospectus, except as set forth in the Registration Statement, the General Disclosure Package and the Prospectus (i) there shall not have been a Material Adverse Change, (ii) the Company shall not have incurred any material liabilities or obligations, direct or contingent, (iii) the Company shall not have entered into any material transactions not in the ordinary course of business other than pursuant to this Agreement and the transactions referred to herein, (iv) the Company shall not have issued any securities (other than the Securities or the Shares issued in the ordinary course of business pursuant to existing employee benefit plans of the Company referred to in the Registration Statement, General Disclosure Package and the Prospectus) or declared or paid any dividend or made any distribution in respect of its capital stock of any class or debt (long-term or short-term), and (v) no material amount of the assets of the Company shall have been pledged, mortgaged or otherwise encumbered.

(d) No Actions, Suits or Proceedings. Since the respective dates as of which information is given in the Registration Statement, the General Disclosure Package and the Prospectus, there shall have been no actions, suits or proceedings instituted, or to the Company’s knowledge, threatened against or affecting, the Company or its subsidiaries or any of their respective officers in their capacity as such, before or by any federal, state or local court, commission, regulatory body, administrative agency or other governmental body, domestic or foreign.

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(e) All Representations True and Correct and All Conditions Fulfilled. Each of the representations and warranties of the Company contained herein shall be true and correct as of the date of the Agreement and at the Closing Date as if made at the Closing Date and any Option Closing Date, as the case may be, and all covenants and agreements contained herein to be performed by the Company and all conditions contained herein to be fulfilled or complied with by the Company at or prior to the Closing Date and any Option Closing Date, shall have been duly performed, fulfilled or complied with.

(f) Opinions of Counsel to the Company. The Underwriters shall have received the opinions and letters, each dated the Closing Date and any Option Closing Date, as the case may be, each reasonably satisfactory in form and substance to the Representative and counsel for the Underwriters, from Law Office of Clifford J. Hunt, P.A., as corporate/securities counsel.

(g) Opinion of Counsel to the Underwriters. The Representative shall have received an opinion, dated the Closing Date and any Option Closing Date, as the case may be, from Pryor Cashman LLP, securities counsel to the Underwriters, with respect to the Registration Statement, the Prospectus and this Agreement, which opinions shall be satisfactory in all respects to the Representative.

(h) Accountants’ Comfort Letter. On the date of the Prospectus, the Representative shall have received from the Accountants a letter dated the date of its delivery, addressed to the Underwriters, in form and substance reasonably satisfactory to the Representative and counsel to the Underwriters, containing statements and information of the type ordinarily included in accountant’s “comfort letters” to underwriters, delivered according to Statement of Auditing Standards No. 72 (or any successor bulletin), with respect to the audited and unaudited financial statements and certain financial information contained in the Registration Statement and the Prospectus. At the Closing Date and any Option Closing Date, as the case may be, the Representative shall have received from the Accountants a letter dated such date, in form and substance reasonably satisfactory to the Representative and counsel to the Underwriters, to the effect that they reaffirm the statements made in the letter furnished by them pursuant to the preceding sentence and have conducted additional procedures with respect to certain financial figures included in the Prospectus, except that the specified date referred to therein for the carrying out of procedures shall be no more than three business days prior to the Closing Date or any Option Closing Date, as the case may be.

(i) Officers’ Certificates. At the Closing Date and any Option Closing Date, there shall be furnished to the Representative an accurate certificate, dated the date of its delivery, signed by each of the Chief Executive Officer and the Chief Financial Officer of the Company, in their capacities as such, and not individually, in form and substance satisfactory to the Representative and counsel to the Underwriters, to the effect that:

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(i) each signer of such certificate has carefully examined the Registration Statement and the Prospectus;

(ii) there has not been a Material Adverse Change; and

(iii) with respect to the matters set forth in Sections 5(b)(i) and 5(e).

(j) Effective Warrant Agreement. The Company and Transfer Online, Inc., as warrant agent for the Warrants, shall have executed and delivered a warrant agreement (the “Warrant Agreement”) and the Warrant Agreement shall be in full force and effect.

(k) Transfer Agent’s Certificate. The Company’s transfer agent shall have furnished or caused to be furnished to the Representative a certificate satisfactory to the Representative of one of its authorized officers with respect to the issuance of the Shares and Warrants and such other customary matters related thereto as the Representative may reasonably request.

(l) Eligible for DTC Clearance. At or prior to the Closing Date and each Option Closing Date, the Shares and Warrants shall be eligible for clearance and settlement through the facilities of the DTC.

(m) Lock-Up Agreements. At the date of this Agreement, the Representative shall have received the executed “lock-up” agreements referred to in Section 4(p) hereof from the Company’s officers and directors.

(n) Compliance with Blue Sky Laws. The Securities shall be qualified for sale in such states and jurisdictions as the Representative may reasonably request, including, without limitation, qualification for exemption from registration or prospectus delivery requirements in the provinces and territories of Canada and other jurisdictions outside the United States, and each such qualification shall be in effect and not subject to any stop order or other proceeding on the Closing Date and the Option Closing Date.

(o) Stock Exchange Listing. The Shares shall have been duly authorized for listing on the NASDAQ Capital Market, subject to official notice of issuance.

(p) Exchange Act Registration. One or more registration statements in respect of the Shares and Warrants have been filed on Form 8-A pursuant to Section 12(b) of the Exchange Act, each of which registration statement complies in all material respects with the Exchange Act.

(q) Good Standing. At the Closing Date and any Option Closing Date, the Company shall have furnished to the Representative satisfactory evidence of the good standing of the Company and its subsidiaries, in their respective jurisdictions of organization (to the extent the concept of “good standing” or such equivalent concept exists under the laws of the applicable jurisdictions) and their good standing as foreign entities in such other jurisdictions as the Representative may reasonably request, in each case in writing or any standard form of telecommunication from the appropriate governmental authorities of such jurisdictions. If the applicable jurisdiction does not have a concept of “good standing,” the Company will furnish evidence in writing or any standard form of telecommunication from the appropriate governmental authorities that the relevant company was duly incorporated and remains duly registered in the jurisdiction of its incorporation.

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(r) Company Certificates. The Company shall have furnished to the Representative such certificates, in addition to those specifically mentioned herein, as the Representative may have reasonably requested as to the accuracy and completeness at the Closing Date and any Option Closing Date of any statement in the Registration Statement, the General Disclosure Package or the Prospectus, as to the accuracy at the Closing Date and any Option Closing Date of the representations and warranties of the Company herein, as to the performance by the Company of its obligations hereunder, or as to the fulfillment of the conditions concurrent and precedent to the obligations hereunder of the Underwriters.

(s) No Objection. FINRA has confirmed that it has not raised any objection with respect to the fairness and reasonableness of the underwriting terms and arrangements relating to the offering of the Offered Securities.

If any of the conditions hereinabove provided for in this Section 5 shall not have been fulfilled when and as required by this Agreement to be fulfilled, the obligations of the Underwriters hereunder may be terminated by the Representative by notifying the Company of such termination in writing at or prior to the Closing Date or any Option Closing Date, as the case may be.

6. Indemnification.

(a) Indemnification of the Underwriters. The Company shall indemnify and hold harmless each Underwriter, its affiliates, the directors, officers, employees and agents of such Underwriter and each person, if any, who controls such Underwriter within the meaning of Section 15 of the Act or Section 20 of the Exchange Act from and against any and all losses, claims, liabilities, expenses and damages (including any and all investigative, legal and other expenses reasonably incurred in connection with, and any amount paid in settlement of, any action, suit or proceeding between any of the indemnified parties and any indemnifying parties or between any indemnified party and any third party, or otherwise, or any claim asserted), to which they, or any of them, may become subject under the Act, the Exchange Act or other federal or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims, liabilities, expenses or damages arise out of or are based on (i) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto), including the information deemed to be a part of the Registration Statement at the time of effectiveness and at any subsequent time pursuant to Rules 430A and 430B of the Rules and Regulations, as applicable, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading or (ii) any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus, any preliminary prospectus supplement, any Issuer Free Writing Prospectus or the Prospectus (or any amendment or supplement to any of the foregoing) or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading or (iii) any untrue statement or alleged untrue statement of a material fact contained in any materials or information provided to investors by, or with the approval of, the Company in connection with the marketing of the offering of the Securities, including any roadshow or investor presentations made to investors by the Company (whether in person or electronically) (collectively, Marketing Materials”) or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading or (iv) in whole or in part any inaccuracy in any material respect in the representations and warranties of the Company contained herein; provided, however, that the Company shall not be liable to the extent that such loss, claim, liability, expense or damage is based on any untrue statement or omission or alleged untrue statement or omission made in reliance on and in conformity with Underwriters’ Information. This indemnity agreement will be in addition to any liability that the Company might otherwise have.

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(b) Indemnification of the Company. Each Underwriter, severally and not jointly, agrees to indemnify and hold harmless the Company, its affiliates, the directors, officers, employees and agents of the Company and each other person or entity, if any, who controls the Company within the meaning of Section 15 of the Act or Section 20 of the Exchange Act, against any losses, liabilities, claims, damages and expenses whatsoever, as incurred (including but not limited to reasonable attorneys’ fees and any and all reasonable expenses whatsoever, incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever, and any and all amounts paid in settlement of any claim or litigation), joint or several, to which they or any of them may become subject under the Act, the Exchange Act or otherwise, insofar as such losses, liabilities, claims, damages or expenses (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement at the time of effectiveness and at any subsequent time pursuant to Rules 430A and 430B of the Rules and Regulations, any Preliminary Prospectus, the Prospectus, or any amendment or supplement to any of them, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that any such loss, liability, claim, damage or expense (or action in respect thereof) arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon the Underwriters’ Information; provided, however, that in no case shall any Underwriter be liable or responsible for any amount in excess of the underwriting discount and commissions applicable to the Securities purchased by such Underwriter hereunder. The parties agree that such information provided by or on behalf of the Underwriters through the Representative consists solely of the material referred to in the last sentence of Section 3(c) hereof.

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(c) Indemnification Procedures. Any party that proposes to assert the right to be indemnified under this Section 6 shall, promptly after receipt of notice of commencement of any action against such party in respect of which a claim is to be made against an indemnifying party or parties under this Section 6, notify each such indemnifying party of the commencement of such action, enclosing a copy of all papers served, but the omission so to notify such indemnifying party shall not relieve the indemnifying party from any liability that it may have to any indemnified party under the foregoing provisions of this Section 6 unless, and only to the extent that, such omission results in the forfeiture of substantive rights or defenses by the indemnifying party. If any such action is brought against any indemnified party and it notifies the indemnifying party of its commencement, the indemnifying party will be entitled to participate in and, to the extent that it elects by delivering written notice to the indemnified party promptly after receiving notice of the commencement of the action from the indemnified party, jointly with any other indemnifying party similarly notified, to assume the defense of the action, with counsel satisfactory to the indemnified party, and after notice from the indemnifying party to the indemnified party of its election to assume the defense, the indemnifying party will not be liable to the indemnified party for any legal or other expenses except as provided below and except for the reasonable out-of-pocket costs of investigation subsequently incurred by the indemnified party in connection with the defense. The indemnified party will have the right to employ its own counsel in any such action, but the fees, expenses and other charges of such counsel will be at the expense of such indemnified party unless (i) the employment of counsel by the indemnified party has been authorized in writing by one of the indemnifying parties in connection with the defense of such action, (ii) the indemnified party has reasonably concluded (based on advice of counsel) that there may be legal defenses available to it or other indemnified parties that are different from or in addition to those available to the indemnifying party, (iii) the indemnified party has reasonably concluded that a conflict or potential conflict exists (based on advice of counsel to the indemnified party) between the indemnified party and the indemnifying party (in which case the indemnifying party shall not have the right to direct the defense of such action on behalf of the indemnified party), (iv) the indemnifying party does not diligently defend the action after assumption of the defense, or (v) the indemnifying party has not in fact employed counsel satisfactory to the indemnified party to assume the defense of such action within a reasonable time after receiving notice of the commencement of the action, in each of which cases the reasonable fees, disbursements and other charges of counsel shall be at the expense of the indemnifying party or parties. It is understood that the indemnifying party or parties shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees, disbursements and other charges of more than one separate firm admitted to practice in such jurisdiction at any one time for all such indemnified party or parties. All such fees, disbursements and other charges shall be reimbursed by the indemnifying party promptly as they are incurred. An indemnifying party shall not be liable for any settlement of any action or claim effected without its written consent (which consent will not be unreasonably withheld or delayed). No indemnifying party shall, without the prior written consent of each indemnified party, settle or compromise or consent to the entry of any judgment in any pending or threatened claim, action or proceeding relating to the matters contemplated by this Section 6 (whether or not any indemnified party is a party thereto), unless (x) such settlement, compromise or consent (i) includes an unconditional release of each indemnified party from all liability arising or that may arise out of such claim, action or proceeding and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party, and (y) the indemnifying party confirms in writing its indemnification obligations hereunder with respect to such settlement, compromise or judgment. Notwithstanding the foregoing, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel, such indemnifying party agrees that it shall be liable for any settlement of the nature contemplated by Section 6(a) effected without its written consent if (A) such settlement is entered into more than 45 days after receipt by such indemnifying party of the aforesaid request, (B) such indemnifying party shall have received notice of the terms of such settlement at least 30 days prior to such settlement being entered into and (iii) such indemnifying party shall not have reimbursed such indemnified party in accordance with such request prior to the date of such settlement.

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(d) Contribution. In order to provide for just and equitable contribution in circumstances in which the indemnification provided for in the foregoing paragraphs of this Section 6 is applicable in accordance with its terms but for any reason is held to be unavailable, the Company and the Underwriters shall contribute to the total losses, claims, liabilities, expenses and damages (including any investigative, legal and other expenses reasonably incurred in connection with, and any amount paid in settlement of, any action, suit or proceeding or any claim asserted, but after deducting any contribution received by the Company from persons other than the Underwriters, such as persons who control the Company within the meaning of the Act, officers of the Company who signed the Registration Statement and directors of the Company, who may also be liable for contribution), to which the Company and the Underwriter may be subject in such proportion as shall be appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters on the other from the offering of the Securities pursuant to this Agreement. The relative benefits received by the Company and the Underwriters shall be deemed to be in the same proportion as (x) the total proceeds from the Offering (net of underwriting discount and commissions but before deducting expenses) received by the Company bears to (y) the underwriting discount and commissions received by the Underwriters, in each case as set forth in the table on the cover page of the Prospectus. If, but only if, the allocation provided by the foregoing sentence is not permitted by applicable law, the allocation of contribution shall be made in such proportion as is appropriate to reflect not only the relative benefits referred to in the foregoing sentence but also the relative fault of the Company, on the one hand, and the Underwriters, on the other, with respect to the statements or omissions which resulted in such loss, claim, liability, expense or damage, or action in respect thereof, as well as any other relevant equitable considerations with respect to such offering. Such relative fault shall be determined by reference to whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or the Underwriters, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contributions pursuant to this Section 6(d) were to be determined by pro rata allocation or by any other method of allocation (even if the Underwriters were treated as one entity for such purpose) which does not take into account the equitable considerations referred to herein. The amount paid or payable by an indemnified party as a result of the loss, claim, liability, expense or damage, or action in respect thereof, referred to above in this Section 6(d) shall be deemed to include, for purpose of this Section 6(d), any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 6(d), no Underwriter shall be required to contribute any amount in excess of the underwriting discounts and commissions received by it. No person found guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 6(d), any person who controls a party to this Agreement within the meaning of the Act will have the same rights to contribution as that party, and each officer of the Company who signed the Registration Statement will have the same rights to contribution as the Company, and each director, officer, employee, counsel or agent of an Underwriter will have the same rights to contribution as such Underwriter, subject in each case to the provisions hereof. Any party entitled to contribution, promptly after receipt of notice of commencement of any action against such party in respect of which a claim for contribution may be made under this Section 6(d), will notify any such party or parties from whom contribution may be sought, but the omission so to notify will not relieve the party or parties from whom contribution may be sought from any other obligation it or they may have under this Section 6(d). The obligations of the Underwriters to contribute pursuant to this Section 6(d) are several in proportion to the respective number of Securities to be purchased by each of the Underwriters hereunder and not joint. No party will be liable for contribution with respect to any action or claim settled without its written consent (which consent will not be unreasonably withheld).

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(e) Survival. The indemnity and contribution agreements contained in this Section 6 and the representations and warranties of the Company contained in this Agreement shall remain operative and in full force and effect regardless of (i) any investigation made by or on behalf of any Underwriter or any controlling Person thereof, (ii) acceptance of any of the Securities and payment therefor or (iii) any termination of this Agreement.

7. Termination. The obligations of the Underwriters under this Agreement may be terminated at any time prior to the Closing Date (or, with respect to the Option Securities, on or prior to the Option Closing Date), by notice to the Company from the Representative, without liability on the part of the Underwriters to the Company, if, prior to delivery and payment for the Firm Securities (or the Option Securities, as the case may be), in the sole judgment of the Representative, any of the following shall occur:

(a) trading or quotation in any of the equity securities of the Company shall have been suspended or limited by the Commission, The Nasdaq Stock Market or by an exchange or otherwise;

(b) trading in securities generally on the New York Stock Exchange, the NYSE MKT, the NASDAQ Capital Market, the NASDAQ Global Market, the NASDAQ Global Select Market shall have been suspended or limited or minimum or maximum prices shall have been generally established on such exchange, or additional material governmental restrictions, not in force on the date of this Agreement, shall have been imposed upon trading in securities generally by such exchange or by order of the Commission or any court or other governmental authority;

(c) a general banking moratorium shall have been declared by any of U.S. federal, New York authorities;

(d) the United States shall have become engaged in new hostilities, there shall have been an escalation in hostilities involving the United States or there shall have been a declaration of a national emergency or war by the United States or there shall have occurred such a material adverse change in general economic, political or financial conditions, including, without limitation, as a result of terrorist activities after the date hereof (or the effect of international conditions on the financial markets in the United States shall be such), or any other calamity or crisis shall have occurred, the effect of any of which is such as to make it impracticable or inadvisable to market the Securities on the terms and in the manner contemplated by the Prospectus;

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(e) the Company shall have sustained a loss material or substantial to the Company by reason of flood, fire, accident, hurricane, earthquake, theft, sabotage, or other calamity or malicious act, whether or not such loss shall have been insured, the effect of any of which is such as to make it impracticable or inadvisable to market the Securities on the terms and in the manner contemplated by the Prospectus; or

(f) there shall have been a Material Adverse Change.

8. Underwriter Default.

(a) If any Underwriter or Underwriters shall default in its or their obligation to purchase Firm Securities hereunder, and if the Securities with respect to which such default relates (the “Default Securities”) do not (after giving effect to arrangements, if any, made by the Representative pursuant to subsection (b) below) exceed in the aggregate 10% of the number of the Firm Securities, each non-defaulting Underwriter, acting severally and not jointly, agrees to purchase from the Company that number of Default Securities that bears the same proportion to the total number of Default Securities then being purchased as the number of Firm Securities set forth opposite the name of such Underwriter on Schedule A hereto bears to the aggregate number of Firm Securities set forth opposite the names of the non-defaulting Underwriters; subject, however, to such adjustments to eliminate fractional shares as the Representative in its discretion shall make.

(b) In the event that the aggregate number of Default Securities exceeds 10% of the number of Firm Securities, the Representatives may in their discretion arrange for themselves or for another party or parties (including any non-defaulting Underwriter or Underwriters who so agree) to purchase the Default Securities on the terms contained herein. In the event that within five (5) calendar days after such a default the Representative does not arrange for the purchase of the Default Securities as provided in this Section 8, this Agreement shall thereupon terminate, without liability on the part of the Company with respect thereto (except in each case as provided in Sections 4(k), 6 and 8) or the Underwriters, but nothing in this Agreement shall relieve a defaulting Underwriter or Underwriters of its or their liability, if any, to the other Underwriters and the Company for damages occasioned by its or their default hereunder.

(c) In the event that any Default Securities are to be purchased by the non-defaulting Underwriters, or are to be purchased by another party or parties as aforesaid, the Representatives or the Company shall have the right to postpone the Closing Date for a period, not exceeding five (5) Business Days, in order to effect whatever changes may thereby be necessary in the Registration Statement or the Prospectus or in any other documents and arrangements, and the Company agrees to file promptly any amendment or supplement to the Registration Statement or the Prospectus which, in the reasonable opinion of Underwriters’ Counsel, may be necessary or advisable. The term “Underwriter” as used in this Agreement shall include any party substituted under this Section 8 with like effect as if it had originally been a party to this Agreement with respect to such Firm Securities.

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9. Miscellaneous.

(a) Notices. Notice given pursuant to any of the provisions of this Agreement shall be in writing and, unless otherwise specified, shall be mailed, hand delivered or telecopied (a) if to the Company, at the office of the Company, 561 NE 79^th Street, Suite 325, Miami, Florida 33138, telephone number: (786) 473-6233, Attention: Chief Executive Officer, or (b) if to the Representative or any Underwriter, to EF Hutton, division of Benchmark Investments, LLC, 590 Madison Avenue, 39^th Floor, New York, New York 10022, Attention: Legal Department, telecopy number: [    ]. Any such notice shall be effective only upon receipt. Any notice under Section 6 hereof may be made by telecopy or telephone, but if so made shall be subsequently confirmed in writing.

(b) No Third Party Beneficiaries. This Agreement has been and is made solely for the benefit of the Underwriters, the Company and, with respect to Section 6, the controlling persons, directors, officers, employees, counsel and agents referred to in Section 6 hereof, and their respective successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement. The term “successors and assigns” as used in this Agreement shall not include a purchaser of Securities from any Underwriter in his, her or its capacity as such a purchaser, as such purchaser of Securities from such Underwriter.

(c) Survival of Representations and Warranties. All representations, warranties and agreements of the Company contained herein or in certificates or other instruments delivered pursuant hereto shall remain operative and in full force and effect regardless of any investigation made by or on behalf of the Underwriters or any of their controlling persons and shall survive delivery of and payment for the Securities hereunder.

(d) Disclaimer of Fiduciary Relationship. The Company acknowledges and agrees that (i) the purchase and sale of the Securities pursuant to this Agreement, including the determination of the public offering price of the Offered Securities and any related discounts and commissions, is an arm’s-length commercial transaction between the Company, on the one hand, and the Underwriters, on the other hand, (ii) in connection with the Offering contemplated by this Agreement and the process leading to such transaction, the Underwriters are and have been acting pursuant to a contractual relationship created solely by this Agreement and are not agents or fiduciaries of the Company or its securityholders, creditors, employees or any other party, (iii) no Underwriter has assumed nor will it assume any advisory or fiduciary responsibility in favor of the Company with respect to the offering of the Securities contemplated by this Agreement or the process leading thereto (irrespective of whether such Underwriter or its affiliates has advised or is currently advising the Company on other matters) and each such Underwriter has no obligation to the Company with respect to the offering of the Securities contemplated by this Agreement except the obligations expressly set forth in this Agreement, (iv) the Underwriters and their affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Company, and (v) no Underwriter has provided any legal, accounting, regulatory or tax advice with respect to the Offering contemplated by this Agreement and the Company has consulted its own legal, accounting, regulatory and tax advisors to the extent it deemed appropriate.

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(e) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.

(f) Submission to Jurisdiction. The Company irrevocably submits to the non-exclusive jurisdiction of any New York State or United States federal court sitting in The City of New York, Borough of Manhattan, over any suit, action or proceeding arising out of or relating to this Agreement, the Disclosure Package, the Prospectus, the Registration Statement, or the offering of the Securities. The Company irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of venue of any such suit, action or proceeding brought in such a court and any claim that any such suit, action or proceeding brought in such a court has been brought in an inconvenient forum. To the extent that the Company has or hereafter may acquire any immunity (on the grounds of sovereignty or otherwise) from the jurisdiction of any court or from any legal process with respect to itself or its property, the Company irrevocably waives, to the fullest extent permitted by law, such immunity in respect of any such suit, action or proceeding including without limitation, any immunity pursuant to the U.S. Foreign Sovereign Immunities Act of 1976, as amended. Each of the Underwriters and the Company further agrees to accept and acknowledge service of any and all process which may be served in any such suit, action or proceeding in the Supreme Court of the State of New York, New York County, or in the United States District Court for the Southern District of New York and agrees that service of process upon the Company mailed by certified mail or delivered by Federal Express via overnight delivery to the Company’s address shall be deemed in every respect effective service of process upon the Company in any such suit, action or proceeding, and service of process upon an Underwriter mailed by certified mail or delivered by Federal Express via overnight delivery to the Underwriters’ address shall be deemed in every respect effective service of process upon such Underwriter in any such suit, action or proceeding.

(g) Judgment Currency. If for the purposes of obtaining judgment in any court it is necessary to convert a sum due hereunder into any currency other than United States dollars, the parties hereto agree, to the fullest extent permitted by law, that the rate of exchange used shall be the rate at which in accordance with normal banking procedures the Underwriters could purchase United States dollars with such other currency in The City of New York on the business day preceding that on which final judgment is given. The obligation of the Company with respect to any sum due from it to an Underwriter or any person controlling such Underwriter shall, notwithstanding any judgment in a currency other than United States dollars, not be discharged until the first business day following receipt by such Underwriter or controlling person of any sum in such other currency, and only to the extent that such Underwriter or controlling person may in accordance with normal banking procedures purchase United States dollars with such other currency. If the United States dollars so purchased are less than the sum originally due to such Underwriter or controlling person hereunder, the Company agrees as a separate obligation and notwithstanding any such judgment, to indemnify such Underwriter or controlling person against such loss. If the United States dollars so purchased are greater than the sum originally due to such Underwriter or controlling person hereunder, such Underwriter or controlling person agrees to pay to the Company an amount equal to the excess of the dollars so purchased over the sum originally due to such Underwriter or controlling person hereunder.

(h) Counterparts. This Agreement may be signed in two or more counterparts with the same effect as if the signatures thereto and hereto were upon the same instrument.

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(i) Survival of Provisions Upon Invalidity of Any Single Provision. In case any provision in this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

(j) Waiver of Jury Trial. The Company and each Underwriter each hereby irrevocably waive any right they may have to a trial by jury in respect of any claim based upon or arising out of this Agreement or the transactions contemplated hereby.

(k) Titles and Subtitles. The titles of the sections and subsections of this Agreement are for convenience and reference only and are not to be considered in construing this Agreement.

(l) Entire Agreement. This Agreement embodies the entire agreement and understanding between the parties hereto and supersedes all prior agreements and understandings relating to the subject matter hereof. This Agreement may not be amended or otherwise modified or any provision hereof waived except by an instrument in writing signed by the parties hereto.

[Signature page follows]

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If the foregoing correctly sets forth your understanding, please so indicate in the space provided below for that purpose, whereupon this letter shall constitute a binding agreement among us.

Very truly yours,

NOVUSTERRA INC.

By:

Name:

Title:

Accepted by the Representatives, acting for themselves and as

Representatives of the Underwriters named on Schedule A hereto,

as of the date first written above:

EF HUTTON, division of Benchmark Investments, LLC
By:
	Name:
	Title:

SCHEDULE A

Name of Underwriter	Number of Units Being Purchased
EF Hutton, division of Benchmark Investments, LLC
Total

Schedule I

ISSUER FREE WRITING PROSPECTUSES:

S-I-1

Schedule II

1.	The public offering price per Unit shall be $[    ].
2.	The Company is selling [    ] Units.
3.	The Company has granted an option to the Representative, on behalf of the Underwriters, to purchase up to an additional [    ] Shares and/or [    ] Warrants.

S-II-1

EXHIBIT A

LOCK-UP AGREEMENT

[___], 2022

EF Hutton, division of Benchmark Investments, LLC

590 Madison Avenue, 39^th Floor

New York, New York 10022

Re: Novusterra Inc.

Ladies and Gentlemen:

As an inducement to EF Hutton, division of Benchmark Investments, LLC, as representative of the underwriters (the “Representative”), to execute an underwriting agreement (the “Underwriting Agreement”) providing for a public offering (the “Offering”) of securities including the common stock, no par value (the “Shares”), of Novusterra Inc., a Florida corporation (the “Company”), the undersigned hereby agrees that without, in each case, the prior written consent of the Representative, during the period specified in the second succeeding paragraph (the “Lock-Up Period”), the undersigned will not (1) offer, pledge, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, make any short sale or otherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into, exercisable or exchangeable for or that represent the right to receive Shares (including, without limitation, Shares which may be deemed to be beneficially owned by the undersigned in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) and securities which may be issued upon exercise of a stock option or warrant) whether now owned or hereafter acquired (the “Undersigned’s Securities”) or (2) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the Undersigned’s Securities, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of Shares or such other securities, in cash or otherwise. The foregoing restriction is expressly agreed to preclude the undersigned from engaging in any hedging or other transaction which is designed to or which reasonably could be expected to lead to or result in a sale or disposition of the Undersigned’s Securities even if such Undersigned’s Securities would be disposed of by someone other than the undersigned. Such prohibited hedging or other transactions would include, without limitation, any short sale or any purchase, sale or grant of any right (including, without limitation, any put or call option) with respect to any of the Undersigned’s Securities or with respect to any security that includes, relates to, or derives any significant part of its value from such Undersigned’s Securities.

In addition, the undersigned agrees that, without the prior written consent of the Representative, it will not, during the Lock-Up Period, make any demand for or exercise any right with respect to, the registration of any Shares or any security convertible into or exercisable or exchangeable for Shares other than as contemplated in the registration statement relating to the Offering.

A-1

The Lock-Up Period shall mean the period commencing on the date of this Lock-Up Agreement and continue and include the date three hundred and sixty (360) days after the date of the final prospectus supplement used to sell Shares in the Offering pursuant to the Underwriting Agreement.

Notwithstanding the foregoing, the undersigned may transfer the Undersigned’s Securities (i) to a Permitted Transferee, (ii) as a bona fide gift or gifts, (iii) to any trust for the direct or indirect benefit of the undersigned or the immediate family of the undersigned, (iv) by virtue of the laws of descent and distribution upon death of the undersigned, or (v) pursuant to a qualified domestic relations order. As used in this Agreement, the term “Permitted Transferee” shall mean, if the undersigned is a corporation, company, business trust, association, limited liability company, partnership, limited liability partnership or other entity (collectively, the “Entities” or, individually, the “Entity”), to any person or Entity which controls, is directly or indirectly controlled by, or is under common control with the undersigned and, if the undersigned is a partnership or limited liability company, to its partners, former partners or an affiliated partnership (or members, former members or an affiliated limited liability company) managed by the same manager or managing partner (or managing member, as the case may be) or management company, or managed by an entity controlling, controlled by, or under common control with, such manager or managing partner (or managing member) or management company in accordance with partnership (or membership) interests; provided, in the case of clauses (i) through (v), that the transferee agrees in writing with the Representative to be bound by the terms of this Lock-Up Agreement, and provided, further, that in the case of clauses (i) through (iii), that no filing by any party in any public report or filing with the SEC shall be required or shall be made voluntarily in connection with such transfer. For purposes of this Lock-Up Agreement, “immediate family” shall mean any relationship by blood, marriage or adoption, not more remote than first cousin. Furthermore, the undersigned may voluntarily forfeit Shares to pay any withholding tax owed by the undersigned on account of the vesting of such shares, which may be reported on a Form 4 as such.

In addition, the foregoing restrictions shall not apply to (i) the exercise of stock options granted pursuant to the Company’s equity incentive plans; provided, that such restrictions shall apply to any of the Undersigned’s Securities issued upon such exercise, or (ii) the establishment of any contract, instruction or plan (a “Plan”) that satisfies all of the requirements of Rule 10b5-1(c)(1)(i)(B) under the Exchange Act; provided, that no sales of the Undersigned’s Securities shall be made pursuant to such a Plan prior to the expiration of the Lock-Up Period, and such a Plan may only be established if no public announcement of the establishment or existence thereof and no filing with the SEC or other regulatory authority in respect thereof or transactions thereunder or contemplated thereby, by the undersigned, the Company or any other person, shall be required, and no such announcement or filing is made voluntarily, by the undersigned, the Company or any other person, prior to the expiration of the Lock-Up Period.

In furtherance of the foregoing, the Company and its transfer agent and registrar are hereby authorized to decline to make any transfer of Shares if such transfer would constitute a violation or breach of this Lock-Up Agreement.

A-2

The undersigned hereby represents and warrants that the undersigned has full power and authority to enter into this Lock-Up Agreement and that, upon request, the undersigned will execute any additional documents necessary in connection with the enforcement hereof. All authority herein conferred or agreed to be conferred and any obligations of the undersigned shall be binding upon the successors, assigns, heirs or personal representatives of the undersigned.

The undersigned understands that the undersigned shall be released from all obligations under this Lock-Up Agreement if (i) the Company or the Representative informs the other that it does not intend to proceed with the Offering, (ii) the Underwriting Agreement does not become effective or if the Underwriting Agreement (other than the provisions thereof which survive termination) shall terminate or be terminated prior to payment for and delivery of the Shares to be sold thereunder, or (iii) the Offering is not completed by [    ].

The undersigned understands that the Representative is entering into the Underwriting Agreement and proceeding with the Offering in reliance upon this Lock-Up Agreement.

This Lock-Up Agreement shall be governed by, and construed in accordance with, the laws of the State of New York.

Whether or not the Offering actually occurs depends on a number of factors, including market conditions. Any Offering will only be made pursuant to the Underwriting Agreement, the terms of which are subject to negotiation among the parties thereto.

[Signature page follows]

A-3

Very truly yours,

(Name - Please Print)

(Signature)

A-4

EXHIBIT B

Form of Press Release

[                ]

[Date]

Novusterra Inc., a Florida corporation (the “Company”), announced today that EF Hutton, division of Benchmark Investments, LLC, the lead book-running manager in the Company’s recent public sale of common stock, is [waiving][releasing] a lock-up restriction with respect to [___] of the Company’s Shares held by [certain officers or directors][an officer or director] of the Company. The [waiver][release] will take effect on [___], and the Shares may be sold on or after such date.

This press release is not an offer for sale of the securities in the United States or in any other jurisdiction where such offer is prohibited, and such securities may not be offered or sold in the United States absent registration or an exemption from registration under the United States Securities Act of 1933, as amended.

B-1

EX-4.3

EXHIBIT 4.3

NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES 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 AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THESE SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED BY SUCH SECURITIES.

NOVUSTERRA INC.

WARRANT

Warrant No. [   ]  Original Issue Date: [   ], 2022

Novusterra Inc., a Florida corporation (the “Company”), hereby certifies that, for value received, EF Hutton, division of Benchmark Investments, LLC or its registered assigns (the “Holder”), is entitled to purchase from the Company up to a total of ☑ shares of Common Stock (each such share, a “Warrant Share” and all such shares, the “Warrant Shares”), at any time and from time to time from and after the 181^st day immediately following the date of effectiveness of that certain registration statement on Form S-1 (File No. 333-259924) filed by the Company, in accordance with FINRA Rule 5110(g)(1), and through and including the fifth anniversary of the date of effectiveness of that certain registration statement on Form S-1 (File No. 333-259924), which such date is ☑, 2027 (the “Expiration Date”), and subject to the following terms and conditions:

1. Definitions. As used in this Warrant, the following terms shall have the respective definitions set forth 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 144.

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

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“Common Stock” means the common stock of the Company, no par value, and any securities into which such common stock may hereafter be reclassified or for which it may be exchanged as a class.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Exercise Price” means $☑, subject to adjustment in accordance with Section 9.

“Fundamental Transaction” means any of the following: (1) the Company effects any merger or consolidation of the Company with or into another Person, (2) the Company effects any sale of all or substantially all of its assets in one or a series of related transactions, (3) any tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property, or (4) the Company effects any reclassification 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.

“New York Courts” means the state and federal courts sitting in the City of New York, Borough of Manhattan.

“Original Issue Date” means the Original Issue Date first set forth on the first page of this Warrant.

“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.

“Rule 144” means Rule 144 promulgated by the Securities and Exchange Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Securities and Exchange Commission having substantially the same effect as such Rule.

“Securities Act” means the Securities Act of 1933, as amended.

“Subsidiary” means any “significant subsidiary” as defined in Rule 1-02(w) of Regulation S-X promulgated by the Securities and Exchange Commission under the Exchange Act.

“Trading Day” means (i) a day on which the Common Stock is traded on a Trading Market, or (ii) if the Common Stock is not quoted on any Trading Market, a day on which the Common Stock is quoted in the over‑the‑counter market as reported by the OTC Markets Group, Inc. (or any similar organization or agency succeeding to its functions of reporting prices); provided, that in the event that the Common Stock is not listed or quoted as set forth in (i) or (ii) hereof, then Trading Day shall mean a Business Day.

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“Trading Market” means whichever of the New York Stock Exchange, the NYSE MKT, the NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital Market, OTC Bulletin Board, or the OTC Markets Group, Inc. OTCQX or OTCQB tier on which the Common Stock is listed or quoted for trading on the date in question.

“Warrant Shares” means the shares of Common Stock issuable upon exercise of this Warrant.

2. Registration of Warrant. 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.

3. Transfers. (a) The Company shall register the transfer of any portion of this Warrant in the Warrant Register, upon surrender of this Warrant, with the Form of Assignment attached hereto duly completed and signed, to the Company at its address specified herein. Upon any such registration or transfer, a new Warrant to purchase Common Stock, in substantially the form of this Warrant (any such new Warrant, a “New Warrant”), evidencing the portion of this Warrant so transferred shall be issued to the transferee and a New Warrant evidencing the remaining portion of this Warrant not so transferred, if any, shall be issued to the transferring Holder. The acceptance of the New Warrant by the transferee thereof shall be deemed the acceptance by such transferee of all of the rights and obligations of a holder of a Warrant.

(b) This Warrant may not be sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of the securities by any person for a period of 180 days immediately following the date of effectiveness of that certain registration statement on Form S-1 (File No. 333-259924) filed by the Company, except as provided in FINRA Rule 5110(e)(1).

4. Exercise and Duration of Warrants. This Warrant shall be exercisable by the registered Holder at any time and from time to time from and after the 181^st day immediately following the date of effectiveness of that certain registration statement on Form S-1 (File No. 333-259924) filed by the Company, in accordance with FINRA Rule 5110(g)(1), and through and including the Expiration Date. At 5:30 p.m., New York City time on the Expiration Date, the portion of this Warrant not exercised prior thereto shall be and become void and of no value. The Company may not call or redeem any portion of this Warrant without the prior written consent of the affected Holder.

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5. Delivery of Warrant Shares.

(a) To effect exercises hereunder, the Holder shall not be required to physically surrender this Warrant unless the aggregate Warrant Shares represented by this Warrant is being exercised. Upon delivery of the Exercise Notice (in the form attached hereto) to the Company (with the attached Warrant Shares Exercise Log) at its address for notice set forth herein and upon payment of the Exercise Price multiplied by the number of Warrant Shares that the Holder intends to purchase hereunder, the Company shall promptly (but in no event later than three Trading Days after the Date of Exercise (as defined herein)) issue and deliver to the Holder, a certificate for the Warrant Shares issuable upon such exercise. The Company shall, upon request of the Holder and subsequent to the date on which a registration statement covering the resale of the Warrant Shares has been declared effective by the Securities and Exchange Commission, use its reasonable best efforts to deliver Warrant Shares hereunder electronically through the Depository Trust & Clearing Corporation or another established clearing corporation performing similar functions, if available, provided, that, the Company may, but will not be required to change its transfer agent if its current transfer agent cannot deliver Warrant Shares electronically through the Depository Trust Corporation. A “Date of Exercise” means the date on which the Holder shall have delivered to the Company: (i) the Exercise Notice (with the Warrant Exercise Log attached to it), appropriately completed and duly signed and (ii) payment of the Exercise Price for the number of Warrant Shares so indicated by the Holder to be purchased.

(b) If by the third Trading Day after a Date of Exercise the Company fails to deliver the required number of Warrant Shares in the manner required pursuant to Section 5(a), then the Holder will have the right to rescind such exercise.

(c) If by the third Trading Day after a Date of Exercise the Company fails to deliver the required number of Warrant Shares in the manner required pursuant to Section 5(a), and if after such third Trading Day and prior to the receipt of such Warrant Shares, the Holder purchases (in an open market transaction or otherwise) 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 (1) pay in cash to the Holder the amount 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 (A) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue by (B) the closing bid price of the Common Stock on the Date of Exercise and (2) 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 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. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy‑In.

(d) The Company’s obligations to issue and deliver Warrant Shares in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other Person of any obligation to the Company or any violation or alleged violation of law by the Holder or any other Person, and irrespective of any other circumstance which might otherwise limit such obligation of the Company to the Holder in connection with the issuance of Warrant Shares. 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 certificates representing Warrant Shares upon exercise of the Warrant as required pursuant to the terms hereof.

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6. Charges, Taxes and Expenses. Issuance and delivery of Warrant Shares upon exercise of this Warrant shall be made without charge to the Holder for any issue or transfer tax, withholding tax, transfer agent fee or other incidental tax or expense in respect of the issuance of such certificates, all of which taxes and expenses shall be paid by the Company; provided, however, that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the registration of any certificates for Warrant Shares or Warrants in a name other than that of the Holder. The Holder shall be responsible for all other tax liability that may arise as a result of holding or transferring this Warrant or receiving Warrant Shares upon exercise hereof.

7. Replacement of Warrant. If this Warrant is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation hereof, or in lieu of and substitution for this Warrant, a New Warrant, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction and customary and reasonable indemnity (which shall not include a surety bond), if requested. Applicants for a New Warrant under such circumstances shall also comply with such other reasonable regulations and procedures and pay such other reasonable third-party costs as the Company may prescribe. If a New Warrant is requested as a result of a mutilation of this Warrant, then the Holder shall deliver such mutilated Warrant to the Company as a condition precedent to the Company’s obligation to issue the New Warrant.

8. Reservation of Warrant Shares. The Company covenants that it will at all times reserve and keep available out of the aggregate of its authorized but unissued and otherwise unreserved Common Stock, solely for the purpose of enabling it to issue Warrant Shares upon exercise of this Warrant as herein provided, the number of Warrant Shares which are then issuable and deliverable upon the exercise of this entire Warrant, free from preemptive rights or any other contingent purchase rights of Persons other than the Holder (taking into account the adjustments and restrictions of Section 9). The Company covenants that all Warrant Shares so issuable and deliverable shall, upon issuance and the payment of the applicable Exercise Price in accordance with the terms hereof, be duly and validly authorized, issued and fully paid and nonassessable.

9. Certain Adjustments. The Exercise Price and number of Warrant Shares issuable upon exercise of this Warrant are subject to adjustment from time to time as set forth in this Section 9.

(a) Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding, (i) pays a stock dividend on its Common Stock or otherwise makes a distribution on any class of capital stock that is payable in shares of Common Stock, (ii) subdivides outstanding shares of Common Stock into a larger number of shares, or (iii) combines outstanding shares of Common Stock into a smaller number of shares, then in each such case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to clause (i) of this paragraph shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution, and any adjustment pursuant to clause (ii) or (iii) of this paragraph shall become effective immediately after the effective date of such subdivision or combination.

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(b) Fundamental Transactions. If, at any time while this Warrant is outstanding there is a Fundamental Transaction, then the Holder shall have the right thereafter to receive, upon exercise of this Warrant, the same amount and kind of securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Transaction if it had been, immediately prior to such Fundamental Transaction, the holder of the number of Warrant Shares then issuable upon exercise in full of this Warrant (the “Alternate Consideration”). 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. At the Holder’s option and request, any successor to the Company or surviving entity in such Fundamental Transaction shall issue to the Holder a new warrant substantially in the form of this Warrant and consistent with the foregoing provisions and evidencing the Holder’s right to purchase the Alternate Consideration for the aggregate Exercise Price upon exercise thereof. The terms of any agreement pursuant to which a Fundamental Transaction is effected shall include terms requiring any such successor or surviving entity to comply with the provisions of this paragraph (b) and ensuring that the Warrant (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction.

(c) Number of Warrant Shares. Simultaneously with any adjustment to the Exercise Price pursuant to this Section 9, the number of Warrant Shares that may be purchased upon exercise of this Warrant shall be increased or decreased proportionately, so that after such adjustment the aggregate Exercise Price payable hereunder for the adjusted number of Warrant Shares shall be the same as the aggregate Exercise Price in effect immediately prior to such adjustment.

(d) Calculations. All calculations under this Section 9 shall be made to the nearest cent or the nearest 1/100^th of a share, as applicable. The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or for the account of the Company, and the disposition of any such shares shall be considered an issue or sale of Common Stock.

(e) Notice of Adjustments. Upon the occurrence of each adjustment pursuant to this Section 9, the Company at its expense will promptly compute such adjustment in accordance with the terms of this Warrant and prepare a certificate setting forth such adjustment, including a statement of the adjusted Exercise Price and adjusted number or type of Warrant Shares or other securities issuable upon exercise of this Warrant (as applicable), describing the transactions giving rise to such adjustments and showing in detail the facts upon which such adjustment is based. Upon written request, the Company will promptly deliver a copy of each such certificate to the Holder and to the Company’s Transfer Agent.

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(f) Notice of Corporate Events. If the Company (i) declares a dividend or any other distribution of cash, securities or other property in respect of its Common Stock, including without limitation any granting of rights or warrants to subscribe for or purchase any capital stock of the Company or any Subsidiary, (ii) authorizes or approves, enters into any agreement contemplating or solicits stockholder approval for any Fundamental Transaction or (iii) authorizes the voluntary dissolution, liquidation or winding up of the affairs of the Company, then the Company shall deliver to the Holder a notice describing the material terms and conditions of such transaction (but only to the extent such disclosure would not result in the dissemination of material, non-public information to the Holder) at least 10 calendar days prior to the applicable record or effective date on which a Person would need to hold Common Stock in order to participate in or vote with respect to such transaction, and the Company will take all steps reasonably necessary in order to ensure that the Holder is given the practical opportunity to exercise this Warrant prior to such time so as to participate in or vote with respect to such transaction; provided, however, that the failure to deliver such notice or any defect therein shall not affect the validity of the corporate action required to be described in such notice.

10. Payment of Exercise Price. The Holder may pay the Exercise Price in one of the following manners:

(a) Cash Exercise. The Holder may deliver immediately available funds; or

(b) Cashless Exercise. The Holder may notify the Company in an Exercise Notice of its election to utilize cashless exercise, in which event the Company shall issue to the Holder the number of Warrant Shares determined as follows:

X = Y [(A-B)/A]

where:

X = the number of Warrant Shares to be issued to the Holder.

Y = the number of Warrant Shares with respect to which this Warrant is being exercised.

A = the average of the daily volume weighted average price for the five Trading Days immediately prior to (but not including) the Exercise Date.

B = the Exercise Price.

For purposes of Rule 144 promulgated under the Securities Act, it is intended, understood and acknowledged that the Warrant Shares issued in a cashless exercise transaction shall be deemed to have been acquired by the Holder, and the holding period for the Warrant Shares shall be deemed to have commenced, on the date this Warrant was originally issued.

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11. Limitations on Exercise. Notwithstanding anything to the contrary contained herein, the number of Warrant Shares that may be acquired by the Holder upon any exercise of this Warrant (or otherwise in respect hereof) shall be limited to the extent necessary to ensure that, following such exercise (or other issuance), the total number of shares of Common Stock then beneficially owned by such Holder and its Affiliates and any other Persons whose beneficial ownership of Common Stock would be aggregated with the Holder’s for purposes of Section 13(d) of the Exchange Act, does not exceed 4.99% of the total number of issued and outstanding shares of Common Stock (including for such purpose the shares of Common Stock issuable upon such exercise). For such purposes, beneficial ownership shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. This provision shall not restrict the number of shares of Common Stock which a Holder may receive or beneficially own in order to determine the amount of securities or other consideration that such Holder may receive in the event of a Fundamental Transaction as contemplated in Section 9 of this Warrant. This restriction may not be waived. Notwithstanding anything to the contrary contained in this Warrant, (a) no term of this Section may be waived by any party, nor amended such that the threshold percentage of ownership would be directly or indirectly increased, (b) this restriction runs with the Warrant and may not be modified or waived by any subsequent holder hereof and (c) any attempted waiver, modification or amendment of this Section will be void ab initio.

12. No Fractional Shares. No fractional shares of Warrant Shares will be issued in connection with any exercise of this Warrant. In lieu of any fractional shares which would, otherwise be issuable, the Company shall pay cash equal to the product of such fraction multiplied by the closing price of one Warrant Share as reported by the applicable Trading Market on the date of exercise.

13. Notices. Any and all notices or other communications or deliveries hereunder (including, without limitation, any Exercise Notice) shall be in writing and 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 specified in this Section prior to 5:30 p.m. (New York City time) on a Trading Day, (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified 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 Trading Day following the date of mailing, if sent by nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given. The addresses for such communications shall be: (i) if to the Company, to 561 NE 79^th Street, Suite 325, Miami, Florida 33138, Attn: Chief Executive Officer, or to Facsimile No.: ☑ (or such other address as the Company shall indicate in writing in accordance with this Section), or (ii) if to the Holder, to the address or facsimile number appearing on the Warrant Register or such other address or facsimile number as the Holder may provide to the Company in accordance with this Section.

14. Warrant Agent. The Company shall serve as warrant agent under this Warrant. Upon 10 days’ notice to the Holder, the Company may appoint a new warrant agent. Any corporation into which the Company or any new warrant agent may be merged or any corporation resulting from any consolidation to which the Company or any new warrant agent shall be a party or any corporation to which the Company or any new warrant agent transfers substantially all of its corporate trust or shareholders services business shall be a successor warrant agent under this Warrant without any further act. Any such successor warrant agent shall promptly cause notice of its succession as warrant agent to be mailed (by first class mail, postage prepaid) to the Holder at the Holder’s last address as shown on the Warrant Register.

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15. Miscellaneous.

(a) This Warrant shall be binding on and inure to the benefit of the parties hereto and their respective successors and assigns. Subject to the preceding sentence, nothing in this Warrant shall be construed to give to any Person other than the Company and the Holder any legal or equitable right, remedy or cause of action under this Warrant. This Warrant may be amended only in writing signed by the Company and the Holder and their successors and assigns. The foregoing sentence shall be subject to the restrictions on waivers and amendments set forth in Section 11 of this Warrant.

(b) 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 New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of this Warrant and the transactions herein contemplated (“Proceedings”) (whether brought against a party hereto or its respective Affiliates, employees or agents) shall be commenced exclusively in 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, and hereby irrevocably waives, and agrees not to assert in any Proceeding, any claim that it is not personally subject to the jurisdiction of any New York Court, or that such Proceeding has been commenced in an improper or inconvenient forum. Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Warrant and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Each party 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 or the transactions contemplated hereby. If either party shall commence a Proceeding to enforce any provisions of this Warrant, then the prevailing party in such Proceeding shall be reimbursed by the other party for its attorney’s fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Proceeding.

(c) The headings herein are for convenience only, do not constitute a part of this Warrant and shall not be deemed to limit or affect any of the provisions hereof.

(d) In case any one or more of the provisions of this Warrant shall be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Warrant shall not in any way be affected or impaired thereby and the parties will attempt in good faith to agree upon a valid and enforceable provision which shall be a commercially reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Warrant.

(e) Prior to exercise of this Warrant, the Holder hereof shall not, by reason of being a Holder, be entitled to any rights of a stockholder with respect to the Warrant Shares.

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IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its authorized officer as of the date first indicated above.

NOVUSTERRA INC.
By:
	Name:
	Title:

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EXERCISE NOTICE

NOVUSTERRA INC.

WARRANT DATED [  ], 2022

The undersigned Holder hereby irrevocably elects to purchase _____________ shares of Common Stock pursuant to the above referenced Warrant. Capitalized terms used herein and not otherwise defined have the respective meanings set forth in the Warrant.

(1)	The undersigned Holder hereby exercises its right to purchase _________________ Warrant Shares pursuant to the Warrant.
(2)	The holder shall pay the sum of $____________ to the Company in accordance with the terms of the Warrant.
(3)	Pursuant to this Exercise Notice, the Company shall deliver to the holder _______________ Warrant Shares in accordance with the terms of the Warrant.
(4)	By its delivery of this Exercise Notice, the undersigned represents and warrants to the Company that in giving effect to the exercise evidenced hereby the Holder will not beneficially own in excess of the number of shares of Common Stock (determined in accordance with Section 13(d) of the Securities Exchange Act of 1934) permitted to be owned under Section 11 of this Warrant to which this notice relates.

Dated: _________________ , ___________	Name of Holder:
	(Print) _____________________________
	By:
	Name: _____________________________
	Title:
	(Signature must conform in all respects to name of holder as specified on the face of the Warrant)

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Warrant Shares Exercise Log

Date Number of Warrant Shares Available to be Exercised Number of Warrant Shares Exercised Number of Warrant Shares Remaining to be Exercised

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NOVUSTERRA INC.

WARRANT DATED [  ], 2022

WARRANT NO. [  ]

FORM OF ASSIGNMENT

[To be completed and signed only upon transfer of Warrant]

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto ________________________________ the right represented by the above-captioned Warrant to purchase ____________ shares of Common Stock to which such Warrant relates and appoints ________________ attorney to transfer said right on the books of the Company with full power of substitution in the premises.

Dated: _______________, ____

(Signature must conform in all respects to name of holder as specified on the face of the Warrant)

Address of Transferee

In the presence of:

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EX-23.1

EXHIBIT 23.1

Consent of Independent Registered Public Accounting Firm

We consent to the inclusion in this Registration Statement of Novusterra, Inc. on Amendment No. 13 to Form S-1 to be filed on or about March 16, 2022, of our report dated February 21, 2022, on our audits of the financial statements of Novusterra, Inc. as of December 31, 2021 and 2020, and for the year ended December 31, 2021 and the period September 21, 2020 (date of formation) to December 31, 2020. We also consent to the reference to us under the heading “Experts” in such Registration Statement.

/s/ Paris, Kreit & Chiu CPA LLP

(formerly Benjamin & Ko)

New York, NY

March 16, 2022

EX-FILING FEES

EXHIBIT 107

Calculation of Filing Fee Tables

S-1

(Form Type)

NOVUSTERRA INC.

(Exact name of Registrant as Specified in its Charter)

Table 1: Newly Registered and Carry Forward Securities

Title of Each Class of Securities to be Registered	Amount to be Registered		Proposed Maximum Offering Price Per Share		Proposed Maximum Aggregate Offering Price Per Share (1)		Amount of Registration fees (7)
Units (2)		3,833,333		5.130		19,664,998.29		1,822.95
Common stock at no par value per share (3)(4)						-		-
Warrants to purchase shares of common stock, no par value per share (3)(4)(5)
Common stock underlying the warrants included in the units (8)		7,666,666		6.41		49,143,329.06		4,555.59
Underwriters’ Warrants to purchase Common Stock (5)								-
Common Stock issuable upon exercise of the Underwriter’s Warrants to purchase Common Stock		166,667		5.13		855,001.71		79.26
Total Registration Fee (6)						69,663,329.06		6,457.79

(1)	Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(o) under the Securities Act of 1933 as amended.
(2)	Each unit consists of one share of common stock, no par value per share, and one warrant to purchase two shares of common stock, no par value per share.
(3)	Included in the price of the units. No fee required pursuant to rule 457(g) under the Securities Act.
(4)	Includes shares of common stock and/or warrants that the underwriter has the option to purchase to cover over-allotments, if any.
(5)	In accordance with Rule 457(i) under the Securities Act, no separate registration fee is required with respect to the warrants registered hereby.
(6)	We have agreed to issue to our underwriter warrants to purchase the number of shares of common stock (the “underwriter warrants”) in the aggregate equal to five percent (5%) of the shares of common stock to be issued and sold in this offering. The underwriter warrants are exercisable at a per share exercise price equal to 100% of the public offering price of one unit. As estimated solely for the purpose of recalculating the registration fee pursuant to Rule 457(g) under the Securities Act, the proposed maximum aggregate offering price of the underwriter warrants is equal to 100% of $855,001.71 (5% of $17,099,998.29).
(7)	$6,000.00 of which was previously paid.
(8)	The warrants are exercisable at a price of $6.4125 per share, an exercise price equal to 125% of the public offering price per share of common stock (the high point of the range set forth on the cover page of the prospectus included as part of this registration statement). The proposed maximum aggregate public offering price of the shares of common stock issuable upon the exercise of the warrants was calculated to be $49,143,329.06.