PART II AND III

An offering statement pursuant to Regulation A relating to these securities has been filed with the Securities and Exchange Commission. Information contained in this Preliminary Offering Circular is subject to completion or amendment. These securities may not be sold nor may offers to buy be accepted before the offering statement filed with the Commission is qualified. This Preliminary Offering Circular shall not constitute an offer to sell or the solicitation of an offer to buy nor may there be any sales of these securities in any state in which such offer, solicitation or sale would be unlawful before registration or qualification under the laws of any such state. We may elect to satisfy our obligation to deliver a Final Offering Circular by sending you a notice within two business days after the completion of our sale to you that contains the URL where the Offering Circular was filed may be obtained.

Preliminary Offering Circular

Subject to Completion. Dated ________________ 2017

SPO Global, Inc.

(Exact name of issuer as specified in its charter)

Delaware

(State or other jurisdiction of incorporation or organization)

www.spoglobal.com

800 W Cummings Park

Suite 2000

Woburn, MA 01801

+1 (407)517-4854

(Address, including zip code, and telephone number, including area code of issuer's principal executive office)

5045	25-1411971
(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification Number)

Maximum offering of ________________________ shares

This is a public offering of shares of common stock of SPO Global, Inc.

The offering will be at a fixed price to be determined at the date of qualification. The end date of the offering will be exactly 180 days from the date the Offering Circular is qualified by the Securities and Exchange Commission (the “Commission”) (unless extended by the Company, in its own discretion, for up to another 90 days).

Our common stock currently trades on the OTC Pink market under the symbol “SPOM” and the closing price of our common stock on April 14, 2016 was $0.025. Our common stock currently trades on a sporadic and limited basis.

We are offering our shares without the use of an exclusive placement agent. Upon achievement of the minimum offering amount, we will be entitled to release the funds held in escrow and the proceeds will be disbursed to us and the purchased shares will be disbursed to the investors. If the offering does not close, for any reason, the proceeds for the offering will be promptly returned to investors without interest.

We expect to commence the sale of the shares as of the date on which the Offering Statement of which this Offering Circular is qualified by the Commission.

See “Risk Factors” to read about factors you should consider before buying shares of common stock.

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

The United States Securities and Exchange Commission does not pass upon the merits of or give its approval to any securities offered or the terms of the offering, nor does it pass upon the accuracy or completeness of any offering circular or other solicitation materials. These securities are offered pursuant to an exemption from registration with the Commission; however, the Commission has not made an independent determination that the securities offered are exempt from registration.

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

Offering Circular dated _____________, 2017

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TABLE OF CONTENTS

SUMMARY.	3
RISK FACTORS.	5
USE OF PROCEEDS.	18
DIVIDEND POLICY.	19
DILUTION.	19
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FIANCIAL CONDITION AND RESULTS OF OPERATIONS.	20
BUSINESS.	24
MANAGEMENT.	30
RELATIONSHIPS AND RELATED PARTY TRANSACTIONS.	32
PRINCIPAL STOCKHOLDERS.	32
DESCRIPTION OF CAPITAL.	33
SHARE ELIGIBLE FOR FUTURE SALE.	35
PLAN OF DISTRIBUTION.	35
VALIDITY OF COMMON STOCK.	35
EXPERTS.	35
INDEX TO UNAUDITED FINANCIAL STATEMENTS.	F-1
PART III EXHIBITS.	36
SIGNATURES.	37

No dealer, salesperson or other person is authorized to give any information or to represent anything not contained in this Offering Circular. You must not rely on any unauthorized information or representations. This Offering Circular is an offer to sell only the shares offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this Offering Circular is current only as of its date.

 

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SUMMARY

This summary highlights information contained elsewhere in this Offering Circular. This summary does not contain all of the information that you should consider before deciding to invest in our common stock. You should read this entire Offering Circular carefully, including the “Risk Factors” section, our historical consolidated financial statements and the notes thereto, and unaudited pro forma financial information, each included elsewhere in this Offering Circular. Unless the context requires otherwise, references in this Offering Circular to “the Company,” “we,” “us” and “our” refer to SPO Global, Inc.

Our Company

S.P.O. (SOFTWARE PERFORMANCE OPTIMIZATION) GLOBAL INC, (“we” or “SPO” or the “Company”) is an emerging technology company that is focused on its unique performance optimization software IP for all enterprise applications. The focus of SPO will be to build its revenues with a growing customer base around the world and to create maximum shareholder value. The company has recently purchased the performance software testing company Reflective Solutions Ltd that sells its software and consultancy across world-wide markets. SPO is focusing on increasing the revenue in Reflective Solutions with expansion in the North American Markets. The principle software products of Reflective Solutions is "Stress Tester", a robust Performance Stress testing solution for large enterprise applications and the product "Sentinel" that is providing enterprise customers an intelligent monitoring solution 24/7 software as a service (SAS).

The Company was originally incorporated under the laws of the State of Delaware in September 1981 under the name "Applied DNA Systems, Inc." On November 16, 1994, it changed its name to "Nu-Tech Bio-Med, Inc." On December 23, 1998, it again changed its name to "United Diagnostic, Inc." Effective April 21, 2005, it acquired (the "Acquisition Transaction") 100% of the outstanding capital stock of SPO Medical Equipment Ltd., a company incorporated under the laws of the State of Israel ("SPO Ltd."), pursuant to a Capital Stock Exchange Agreement dated as of February 28, 2005 between the Company, SPO Ltd. and the shareholders of SPO Ltd., as amended and restated on April 21, 2005 (the "Exchange Agreement"). In exchange for the outstanding capital stock of SPO Ltd., the Company issued to the former shareholders of SPO Ltd. a total of 5,769,106 shares of the Company's common stock, par value $0.01 per share ("Common Stock"), representing approximately 90% of the Common Stock then issued and outstanding after giving effect to the Acquisition Transaction. As a result of the Acquisition Transaction, SPO Ltd. became a wholly owned subsidiary of the Company as of April 21, 2005 and, subsequent to the Acquisition Transaction, the Company changed its name to "SPO Medical Inc." Upon consummation of the Acquisition Transaction, the SPO effectuated a forward subdivision of its Common Stock issued and outstanding on a 2.65285:1 basis.

The merger between UNDI and the SPO Ltd was accounted for as a reverse merger. As the shareholders of SPO Ltd received the largest ownership interest in the Company, SPO Ltd was determined to be the "accounting acquirer" in the reverse acquisition. As a result, the historical financial statements of the Company were replaced with the historical financial statements of SPO Ltd.

SPO Global and its subsidiary, SPO Ltd., are collectively referred to as the "Company". In January 2010, the Company restructured its operations to focus primarily on licensing its core technology for non-medical market applications. Following the restructure, the Company ceased its previous operations associated with the distribution of the PulseOx line in the medical field. In February 2011, the Company transferred research and development activities to subcontractors, thereby ceasing all internal research and development activities.

Effective October 4, 2013, the Company changed its corporate name to “SPO Global Inc.”

On the 23rd of December, 2015, SPO executed a Stock Exchange Agreement (Merger) for the purchase of a 93.94% interest in the UK company, Reflective Solutions Ltd. (“Reflective”), a performance software testing company. Under the SEA, the selling shareholders of Reflective received 1433 shares of SPO restricted common stock for every 1 share held, for a total issuance by SPO of 46,980,905 restrictive common shares.

 

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The Merger is accounted for as a reverse-merger and recapitalization. Reflective is the acquirer for financial reporting purposes and SPO is the acquired company. Consequently, the assets and liabilities and the operations that are reflected in the historical financial statements prior to the Merger are those of Reflective and are recorded at the historical cost basis of Reflective, and the consolidated financial statements after completion of the Merger include the assets, liabilities and operations of SPO and Reflective, from the closing date of the Merger. Therefore, the historical equity accounts of Reflective including par value per share, share and per share numbers included in the 2014 financial statements, have been adjusted to reflect the number of shares received in the Merger.

On December 31, 2015, SPO Global entered into a Purchase Agreement with Elepho, Inc., a DE company, owned by Michael Braunold, the Company’s former CEO and President, to sell its remaining interests in SPO Medical Equipment, LTD. SPO Global had previously entered into a Settlement Agreement with Mr. Braunold, wherein it granted him a perpetual, exclusive license to the IP and SPO technology held by SPO Medical Ltd, in exchange for, among other things, his release of all sums owed to him by the Company.

Background of Reflective Solutions Ltd.

Reflective Solutions Ltd is a United Kingdom Entity that was formed in 1998 as a Java Based consultancy.

In 2006 we began the development of a performance testing product with the brand name “Stress Tester” This is a software solution that has been uniquely designed to test a variety of Enterprise Software Applications that require extensive performance testing before a rollout as well testing on applications that have been deployed.

In 2012 we started developing a product called “Sentinel” that has been designed to provide continuous monitoring and performance on server applications.

In 2015 we started to develop a SAS (Software as Service) solution to its existing customers as well as to its database of potential customers.

The company has coded and developed its own unique IP (Intellectual Property) that is continually being supported and maintained by the company development team. We have a long history of working with leading enterprise customers throughout the world, and have developed extensive relationships with large resellers and integrators and consulting firms.

In 2015 we sold our software to number of leading enterprise companies around the world. We have sold to LAX (Los Angeles International Airport), TFL (Transport for London), which operates the subway and infrastructure for London , and Nova Scotia Power, in Canada. We are continuing discussions with all of these clients to increase our business relationship and our mutual profitability.

In addition, we have signed as a registered partner with IBM worldwide. We have also signed an exclusive partnership and distributor relationship in Japan. We continue discussions with these two companies in order to increase our business relationship and mutual profitability. We have worked with a number of large recognized integrators and have supplied our software to London Heathrow Airport as well other large enterprises through these relationships.

 

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The Offering

Common Stock we are offering	Up to a Maximum ______________________ shares at a price of $_____ for a sum total of $500,000.
Common Stock outstanding before this Offering	400,540,694
Use of proceeds	The funds raised per this offering will be utilized in working capital, expanded marketing here in the Unites States as well as aboard and expansion of computing capacity. See “Use of Proceeds” for more details.
Risk Factors	See “Risk Factors” and other information appearing elsewhere in this Offering Circular for a discussion of factors you should carefully consider before deciding whether to invest in our common stock.

This offering is being made on a self-underwritten basis without the use of an exclusive placement agent. However, the Company has entered into a Securities Purchase Agreement with Blackbridge Capital, LLC, a Delaware limited liability company, operating out of New York, New York (“Blackbridge”) whereby Blackbridge has agreed to purchase up to $500,000 worth of shares pursuant to this Offering Circular. In addition, the Company has issued a convertible promissory note pursuant to the Securities Purchase Agreement equal to $25,000 as a commitment fee (the “Blackbridge Note”). Per the terms of the Blackbridge Note, Blackbridge has the right to convert any or all of the Blackbridge Note into common stock of the Company either as restricted stock or may exchange the underlying commitment shares for purchase of qualified shares issued per the qualified Offering Circular. As there is no minimum offering, upon the approval of any subscription to this Offering Circular, the Company shall immediately deposit said proceeds into the bank account of the Company and may dispose of the proceeds in accordance with the Use of Proceeds.

Please note that the Securities Purchase Agreement with Blackbridge is not exclusive and does not guarantee any subscription by Blackbridge to the Offering Circular. In such case, management will make its best effort to fill the subscription.

In the event that the Offering Circular is fully subscribed, any additional subscriptions shall be rejected and returned to the subscribing party along with any funds received.

In order to subscribe to purchase the shares, a prospective investor must complete a subscription agreement and send payment by check, wire transfer or ACH. Investors must answer certain questions to determine compliance with the investment limitation set forth in Regulation A Rule 251(d)(2)(i)(C) under the Securities Act of 1933, which states that in offerings such as this one, where the securities will not be listed on a registered national securities exchange upon qualification, the aggregate purchase price to be paid by the investor for the securities cannot exceed 10% of the greater of the investor’s annual income or net worth. In the case of an investor who is not a natural person, revenues or net assets for the investor’s most recently completed fiscal year are used instead.

The Company has not currently engaged any party for the public relations or promotion of this offering.

As of the date of this filing, there are no additional offers for shares, nor any options, warrants, or other rights for the issuance of additional shares except those described herein.

RISK FACTORS

Investing in our common stock involves a high degree of risk. You should carefully consider each of the following risks, together with all other information set forth in this Offering Circular, including the consolidated financial statements and the related notes, before making a decision to buy our common stock. If any of the following risks actually occurs, our business could be harmed. In that case, the trading price of our common stock could decline, and you may lose all or part of your investment.

This offering contains forward-looking statements. Forward-looking statements relate to future events or our future financial performance. We generally identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other similar words. These statements are only predictions. The outcome of the events described in these forward-looking statements is subject to known and unknown risks, uncertainties and other factors that may cause our customers’ or our industry’s actual results, levels of activity, performance or achievements expressed or implied by these forward-looking statements, to differ. “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business,” as well as other sections in this prospectus, discuss the important factors that could contribute to these differences.

 

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The forward-looking statements made in this prospectus relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events.

This prospectus also contains market data related to our business and industry. This market data includes projections that are based on a number of assumptions. If these assumptions turn out to be incorrect, actual results may differ from the projections based on these assumptions. As a result, our markets may not grow at the rates projected by these data, or at all. The failure of these markets to grow at these projected rates may have a material adverse effect on our business, results of operations, financial condition and the market price of our common stock.

Risk Related to our Company and our Business

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

Although both SPO Global, Inc. and the now merged Creative Arts, Inc. have 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 would be significantly harmed.

We have a history of operating losses and we may need additional financing to meet our future long term capital requirements.

We have a history of losses and may continue to incur operating and net losses for the foreseeable future. As of June 30, 2016, we had a working capital deficit of $125,339, and stockholders’ deficit of $ $91,954. We incurred a net loss of $1,983,208 for the six months ended June 30, 2016 and a net loss of $74,900 for the six months ended June 30, 2016. We have not achieved sustainable profitability on an annual basis. We may not be able to reach a level of revenue to achieve profitability. If our revenues grow slower than anticipated, or if operating expenses exceed expectations, then we may not be able to achieve profitability in the near future or at all, which may depress our stock price.

We may need significant additional capital, which we may be unable to obtain.

We may need to obtain additional financing over time to fund operations. Our management cannot predict the extent to which we will require additional financing, and can provide no assurance that additional financing will be available on favorable terms or at all. The rights of the holders of any debt or equity that may be issued in the future could be senior to the rights of common shareholders, and any future issuance of equity could result in the dilution of our common shareholders’ proportionate equity interests in our company. Failure to obtain financing or an inability to obtain financing on unattractive terms could have a material adverse effect on our business, prospects, results of operation and financial condition.

 

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Our resources may not be sufficient to manage our potential growth; failure to properly manage our potential growth would be detrimental to our business.

We may fail to adequately manage our potential future growth. Any growth in our operations will place a significant strain on our administrative, financial and operational resources, and increase demands on our management and on our operational and administrative systems, controls and other resources. We cannot assure you that our existing personnel, systems, procedures or controls will be adequate to support our operations in the future or that we will be able to successfully implement appropriate measures consistent with our growth strategy. As part of this growth, we may have to implement new operational and financial systems, procedures and controls to expand, train and manage our employee base, and maintain close coordination among our technical, accounting, finance, marketing and sales staff. We cannot guarantee that we will be able to do so, or that if we are able to do so, we will be able to effectively integrate them into our existing staff and systems. To the extent we acquire businesses, we will also need to integrate and assimilate new operations, technologies and personnel. If we are unable to manage growth effectively, such as if our sales and marketing efforts exceed our capacity to install, maintain and service our products or if new employees are unable to achieve performance levels, our business, operating results and financial condition could be materially and adversely affected.

We will need to increase the size of our organization, and we may be unable to manage rapid growth effectively.

Our failure to manage growth effectively could have a material and adverse effect on our business, results of operations and financial condition. We anticipate that a period of significant expansion will be required to address possible acquisitions of business, products, or rights, and potential internal growth to handle licensing and research activities. This expansion will place a significant strain on management, operational and financial resources. To manage the expected growth of our operations and personnel, we must both improve our existing operational and financial systems, procedures and controls and implement new systems, procedures and controls. We must also expand our finance, administrative, and operations staff. Our current personnel, systems, procedures and controls may not adequately support future operations. Management may be unable to hire, train, retain, motivate and manage necessary personnel or to identify, manage and exploit existing and potential strategic relationships and market opportunities.

We are dependent on the continued services and performance of our senior management, the loss of any of whom could adversely affect our business, operating results and financial condition.

Our future performance depends on the continued services and continuing contributions of our senior management to execute our business plan, and to identify and pursue new opportunities and product innovations. The loss of services of senior management, particularly Jonathan Thomas, Creative Arts, Inc. founder, could significantly delay or prevent the achievement of our strategic objectives. The loss of the services of senior management for any reason could adversely affect our business, prospects, financial condition and results of operations.

Our ability to protect our intellectual property and proprietary technology through patents and other means is uncertain and may be inadequate, which would have a material and adverse effect on us.

Our success depends significantly on our ability to protect our proprietary rights to the technologies used in our products. We currently do not have any patents pending, thus we cannot assure you that we will be able to control all of the rights for all of our intellectual property. If we rely on patent protection, as well as a combination of copyright, trade secret and trademark laws and nondisclosure, confidentiality and other contractual restrictions to protect our proprietary technology, including our licensed technology. However, these legal means afford only limited protection and may not adequately protect our rights or permit us to gain or keep any competitive advantage. Both the patent application process and the process of managing patent disputes can be time-consuming and expensive. Competitors may be able to design around our patents or develop products which provide outcomes which are comparable or even superior to ours. Steps that we have taken to protect our intellectual property and proprietary technology, including entering into confidentiality agreements and intellectual property assignment agreements with some of our officers, employees, consultants and advisors, may not provide meaningful protection for our trade secrets or other proprietary information in the event of unauthorized use or disclosure or other breaches of the agreements. Furthermore, the laws of foreign countries may not protect our intellectual property rights to the same extent as do the laws of the United States.

 

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In the event a competitor infringes upon our licensed or pending patent or other intellectual property rights, enforcing those rights may be costly, uncertain, difficult and time consuming. Even if successful, litigation to enforce our intellectual property rights or to defend our patents against challenge could be expensive and time consuming and could divert our management’s attention. We may not have sufficient resources to enforce our intellectual property rights or to defend our patents rights against a challenge. The failure to obtain patents and/or protect our intellectual property rights could have a material and adverse effect on our business, results of operations and financial condition.

We may become subject to claims of infringement or misappropriation of the intellectual property rights of others, which could prohibit us from developing our products, require us to obtain licenses from third parties or to develop non-infringing alternatives and subject us to substantial monetary damages.

Third parties could, in the future, assert infringement or misappropriation claims against us with respect to products we develop. Whether a product infringes a patent or misappropriates other intellectual property involves complex legal and factual issues, the determination of which is often uncertain. Therefore, we cannot be certain that we have not infringed the intellectual property rights of others. Our potential competitors may assert that some aspect of our product infringes their patents. Because patent applications may take years to issue, there also may be applications now pending of which we are unaware that may later result in issued patents upon which our products could infringe. There also may be existing patents or pending patent applications of which we are unaware upon which our products may inadvertently infringe.

Any infringement or misappropriation claim could cause us to incur significant costs, place significant strain on our financial resources, divert management’s attention from our business and harm our reputation. If the relevant patents in such claim were upheld as valid and enforceable and we were found to infringe them, we could be prohibited from selling any product that is found to infringe unless we could obtain licenses to use the technology covered by the patent or are able to design around the patent. We may be unable to obtain such a license on terms acceptable to us, if at all, and we may not be able to redesign our products to avoid infringement. A court could also order us to pay compensatory damages for such infringement, plus prejudgment interest and could, in addition, treble the compensatory damages and award attorney fees. These damages could be substantial and could harm our reputation, business, financial condition and operating results. A court also could enter orders that temporarily, preliminarily or permanently enjoin us and our customers from making, using, or selling products, and could enter an order mandating that we undertake certain remedial activities. Depending on the nature of the relief ordered by the court, we could become liable for additional damages to third parties

We may not be successful in the implementation of our business strategy or our business strategy may not be successful, either of which will impede our development and growth.

Our business strategy remaining on the cutting edge of enterprise software as a service for testing and monitoring enterprise systems. Our ability to implement this business strategy is dependent on our ability to:

● predict changes in new enterprise software releases;

● Understanding best practices for enterprise systems and implementation;

● convincing new clients to utilize our SaaS product;

● establish brand recognition and customer loyalty; and

● manage growth in administrative overhead costs during the initiation of our business efforts.

 

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We do not know whether we will be able to continue successfully implementing our business strategy or whether our business strategy will ultimately be successful. In assessing our ability to meet these challenges, a potential investor should take into account our limited operating history and brand recognition, our management’s relative inexperience, the competitive conditions existing in our industry and general economic conditions. Our growth is largely dependent on our ability to successfully implement our business strategy. Our revenues may be adversely affected if we fail to implement our business strategy or if we divert resources to a business that ultimately proves unsuccessful.

We have limited existing brand identity and customer loyalty; if we fail to market our brand to promote our service offerings, our business could suffer.

Because of our limited operating history, we currently do not have strong brand identity or brand loyalty. We believe that establishing and maintaining brand identity and brand loyalty is critical to attracting customers to our program. In order to attract copyright holders to our program, we may be forced to spend substantial funds to create and maintain brand recognition among consumers. We believe that the cost of our sales campaigns could increase substantially in the future. If our branding efforts are not successful, our ability to earn revenues and sustain our operations will be harmed.

Promotion and enhancement of our services will depend on our success in consistently providing high-quality services to our customers. Since we rely on technology partners to provide portions of the service to our customers, if our suppliers do not send accurate and timely data, or if our customers do not perceive the products we offer as superior, the value of our brand could be harmed. Any brand impairment or dilution could decrease the attractiveness of our services to one or more of these groups, which could harm our business, results of operations and financial condition.

Our service offerings may not be accepted.

As is typically the case involving service offerings, anticipation of demand and market acceptance are subject to a high level of uncertainty. The success of our service offerings primarily depends on the interest of copyright holders in joining our service. In general, achieving market acceptance for our services will require substantial marketing efforts and the expenditure of significant funds, the availability of which we cannot be assured, to create awareness and demand among customers. We have limited financial, personnel and other resources to undertake extensive marketing activities. Accordingly, we cannot assure you that any of our services will be accepted or with respect to our ability to generate the revenues necessary to remain in business.

A competitor with a stronger or more suitable financial position may enter our marketplace.

To our knowledge, there is currently no other company offering a copyright settlement service for peer to peer infringers. The success of our service offerings primarily depends on the interest of copyright holders in joining our service, as opposed to a similar service offered by a competitor. If a direct competitor arrives in our market, achieving market acceptance for our services may require additional marketing efforts and the expenditure of significant funds, the availability of which we cannot be assured, to create awareness and demand among customers. We have limited financial, personnel and other resources to undertake additional marketing activities. Accordingly, no assurance can be given that we will be able to win business from a stronger competitor.

A significant portion of our revenue is dependent upon a small number of customers and the loss of any one of these customers would negatively impact our revenues and our results of operations.

During the year ended December 31, 2015 and the six months ended June 30, 2016 revenues generated from the services rendered to 3 major customers. As of June 30, 2016, the Company had accounts receivable from less than 5 customers representing approximately 100% of accounts receivable and one copyright owner representing approximately 100% of accounts receivable. Although we believe the continued growth of the Company will further diversity our client base our current concentration of clients means that loss of any client could be detrimental to the overall business.

 

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Software defects or errors in our products could harm our reputation, result in significant costs to us and impair our ability to sell our products, which would harm our operating results.

Our products may contain undetected defects or errors when first introduced or as new versions are released, which could materially and adversely affect our reputation, result in significant costs to us and impair our ability to sell our products in the future. The costs incurred in correcting any defects or errors may be substantial and could adversely affect our operating results.

Interruptions or performance problems associated with our technology and infrastructure may adversely affect our business and operating results.

Our continued growth depends in part on the ability of our existing and potential customers to access our platform at any time and within an acceptable amount of time. Our platform is proprietary, and we rely on the expertise of members of our engineering, operations, and software development teams for their continued performance. We have experienced, and may in the future experience, disruptions, outages, and other performance problems due to a variety of factors, including infrastructure changes, introductions of new functionality, human or software errors, capacity constraints due to an overwhelming number of users accessing our platform simultaneously, denial of service attacks, or other security related incidents. In some instances, we may not be able to identify the cause or causes of these performance problems within an acceptable period of time. It may become increasingly difficult to maintain and improve our performance, especially during peak usage times and as our platform become more complex and our user traffic increases. If our platform is unavailable or if our users are unable to access our platform within a reasonable amount of time or at all, our business would be negatively affected. In addition, our infrastructure does not currently include the real-time mirroring of data. Therefore, in the event of any of the factors described above, or certain other failures of our infrastructure, customer data may be permanently lost. Moreover, some of our customer agreements include performance guarantees and service level standards that obligate us to provide credits or termination rights in the event of a significant disruption in our platform. To the extent that we do not effectively address capacity constraints, upgrade our systems as needed, and continually develop our technology and network architecture to accommodate actual and anticipated changes in technology, our business and operating results may be adversely affected.

Our service relies on third parties to maintain servers and databases. Disruption in third party services would adversely affect our ability to provide our product.

We do not own our own servers. To properly optimize our software solutions, we rely on third parties to maintain dedicated servers and store our databases. In the event that these services were disrupted, either for technical reasons, a dispute between us and a third party provider, or for any other reason, we will not be able to provide our customers with part or all of our product. In the short term, these could damage our reputation with existing and future customers. If the disruption were prolonged, it could be detrimental to the overall company, resulting in losses and possible claims by customers.

Real or perceived errors, failures, or bugs in our platform could adversely affect our operating results and growth prospects.

Because our platform is complex, undetected errors, failures, vulnerabilities, or bugs may occur, especially when updates are deployed. Our platform is most often used in connection with large-scale computing environments with different operating systems, system management software, equipment, and networking configurations, which may cause errors or failures of our platform, or other aspects of the computing environment into which they are deployed. In addition, deployment of our platform into complicated, large-scale computing environments may expose undetected errors, failures, vulnerabilities, or bugs in our platform. Despite testing by us, errors, failures, vulnerabilities, or bugs may not be found in our platform until after they are deployed to our customers. We have discovered and expect will continue to discover software errors, failures, vulnerabilities, and bugs in our platform anticipate that certain of these errors, failures, vulnerabilities, and bugs will only be discovered and remediated after deployment to customers. Real or perceived errors, failures, or bugs in our platform could result in negative publicity, loss of or delay in market acceptance of our platform, loss of competitive position, or claims by customers for losses sustained by them. In such an event, we may be required, or may choose, for customer relations or other reasons, to expend additional resources in order to help correct the problem.

 

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If the market for SaaS business software applications develops more slowly than we expect or declines, our business would be adversely affected.

The market for SaaS business software applications is less mature than the market for on-premise business software applications, and the adoption rate of SaaS business software applications may be slower among subscribers in industries with heightened data security interests or business practices requiring highly customizable application software. Our success will depend to a substantial extent on the widespread adoption of SaaS business applications in general, and of SaaS customer service applications in particular. Many organizations have invested substantial personnel and financial resources to integrate traditional on-premise business software applications into their businesses, and therefore may be reluctant or unwilling to migrate to SaaS applications. It is difficult to predict customer adoption rates and demand for our platform, the future growth rate and size of the SaaS business applications market or the entry of competitive applications. The expansion of the SaaS business applications market depends on a number of factors, including the cost, performance, and perceived value associated with SaaS, as well as the ability of SaaS providers to address data security and privacy concerns. Additionally, government agencies have adopted, or may adopt, laws and regulations regarding the collection and use of personal information obtained from consumers and other individuals, or may seek to access information on our platform, either of which may reduce the overall demand for our platform. If we or other SaaS providers experience data security incidents, loss of customer data, disruptions in delivery, or other problems, the market for SaaS business applications, including our platform, may be negatively affected. If SaaS business applications do not continue to achieve market acceptance, or there is a reduction in demand for SaaS business applications caused by a lack of customer acceptance, technological challenges, weakening economic conditions, data security or privacy concerns, governmental regulation, competing technologies and products, or decreases in information technology spending, it would result in decreased revenue and our business would be adversely affected.

Incorrect or improper implementation or use of our platform could result in customer dissatisfaction and negatively affect our business, results of operations, financial condition, and growth prospects.

Our platform is deployed in a wide variety of technology environments and into a broad range of complex workflows. Increasingly, our platform has been integrated into large-scale, complex technology environments, and specialized use cases, and we believe our future success will depend on our ability to increase use of our platform in such deployments. We often assist our customers in implementing our platform, but many customers attempt to implement even complex deployments themselves. If we or our customers are unable to implement our platform successfully, or unable to do so in a timely manner, customer perceptions of our platform and company may be impaired, our reputation and brand may suffer, and customers may choose not to renew or expand the use of our platform.

Our customers and third-party partners may need training in the proper use of our platform to maximize its potential. If our platform is not implemented or used correctly or as intended, inadequate performance may result. Because our customers rely on platform to manage a wide range of operations, the incorrect or improper implementation or use of platform, our failure to train customers on how to efficiently and effectively use platform, or our failure to provide adequate product support to our customers, may result in negative publicity or legal claims against us. Also, as we continue to expand our customer base, any failure by us to properly provide these services will likely result in lost opportunities for additional subscriptions to our platform.

Our products use novel technologies or apply technologies in more innovative ways than other competing software companies and are or will be new to the market; accordingly, we may not be successful in achieving wide acceptance of our products and our operations and growth would be adversely affected.

Although we believe our technology provides a robust software solution for monitoring and testing enterprise systems, the technologies applied are more innovative than those our competitors. Our customers, however, may not have the knowledge or sophistication to deal with the implementation of our products. As result, we may not be successful in gaining wide acceptance of our products and services, which could be detrimental to our operations and growth.

 

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If our security measures are breached or unauthorized access to customer data is otherwise obtained, our platform may be perceived as insecure, we may lose existing customers or fail to attract new customers, and we may incur significant liabilities.

Use of our platform involve the storage, transmission, and processing of our customers’ proprietary data, including personal or identifying information regarding their customers or employees. Unauthorized access or security breaches of our platform could result in the loss of data, loss of business, severe reputational damage adversely affecting customer or investor confidence, regulatory investigations and orders, litigation, indemnity obligations, damages for contract breach, penalties for violation of applicable laws or regulations, and significant costs for remediation that may include liability for stolen assets or information and repair of system damage that may have been caused, incentives offered to customers or other business partners in an effort to maintain business relationships after a breach, and other liabilities. We have incurred and expect to incur significant expenses to prevent security breaches, including deploying additional personnel and protection technologies, training employees, and engaging third-party experts and consultants.

Because the techniques used to obtain unauthorized access or to sabotage systems change frequently and generally are not identified until they are launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures. We may also experience security breaches that may remain undetected for an extended period.

Because data security is a critical competitive factor in our industry, we make numerous statements in our privacy policies and terms of service, through our certifications to privacy standards, and in our marketing materials, providing assurances about the security of our platform including detailed descriptions of security measures we employ. Should any of these statements be untrue or become untrue, even through circumstances beyond our reasonable control, we may face claims of misrepresentation or deceptiveness by the U.S. Federal Trade Commission, state and foreign regulators, and private litigants.

Litigation may harm our business.

Substantial, complex or extended litigation could cause us to incur significant costs and distract our management. For example, lawsuits by employees, stockholders, collaborators, distributors, customers, competitors or others could be very costly and substantially disrupt our business. Disputes from time to time with such companies, organizations or individuals are not uncommon, and we cannot assure you that we will always be able to resolve such disputes or on terms favorable to us. Unexpected results could cause us to have financial exposure in these matters in excess of recorded reserves and insurance coverage, requiring us to provide additional reserves to address these liabilities, therefore impacting profits.

If we experience a significant disruption in our information technology systems or if we fail to implement new systems and software successfully, our business could be adversely affected.

We depend on information systems throughout our company to control our manufacturing processes, process orders, manage inventory, process and bill shipments and collect cash from our customers, respond to customer inquiries, contribute to our overall internal control processes, maintain records of our property, plant and equipment, and record and pay amounts due vendors and other creditors. If we were to experience a prolonged disruption in our information systems that involve interactions with customers and suppliers, it could result in the loss of sales and customers and/or increased costs, which could adversely affect our overall business operation.

 
Risks Related to the Securities Markets and Ownership of our Equity Securities

The Common Stock is thinly traded, so you may be unable to sell at or near ask prices or at all if you need to sell your shares to raise money or otherwise desire to liquidate your shares.

The Common Stock has historically been sporadically traded on the OTC PinkSheets, meaning that the number of persons interested in purchasing our shares at or near ask prices at any given time may be relatively small or non-existent. This situation is attributable to a number of factors, including the fact that we are a small company which is relatively unknown to stock analysts, stock brokers, institutional investors and others in the investment community that generate or influence sales volume, and that even if we came to the attention of such persons, they tend to be risk-averse and would be reluctant to follow an unproven company such as ours or purchase or recommend the purchase of our shares until such time as we became more seasoned and viable. As a consequence, there may be periods of several days or more when trading activity in our shares is minimal or non-existent, as compared to a seasoned issuer which has a large and steady volume of trading activity that will generally support continuous sales without an adverse effect on share price. We cannot give you any assurance that a broader or more active public trading market for our common shares will develop or be sustained, or that current trading levels will be sustained.

 

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The market price for the common stock is particularly volatile given our status as a relatively unknown company with a small and thinly traded public float, limited operating history and lack of revenue, which could lead to wide fluctuations in our share price. The price at which you purchase our shares may not be indicative of the price that will prevail in the trading market. You may be unable to sell your common shares at or above your purchase price, which may result in substantial losses to you.

The market for our shares of common stock is characterized by significant price volatility when compared to seasoned issuers, and we expect that our share price will continue to be more volatile than a seasoned issuer for the indefinite future. The volatility in our share price is attributable to a number of factors. First, as noted above, our shares are sporadically traded. As a consequence of this lack of liquidity, the trading of relatively small quantities of shares may disproportionately influence the price of those shares in either direction. The price for our shares could, for example, decline precipitously in the event that a large number of our shares is sold on the market without commensurate demand, as compared to a seasoned issuer which could better absorb those sales without adverse impact on its share price. Secondly, we are a speculative investment due to, among other matters, our limited operating history and lack of revenue or profit to date, and the uncertainty of future market acceptance for our potential products. As a consequence of this enhanced risk, more risk-averse investors may, under the fear of losing all or most of their investment in the event of negative news or lack of progress, be more inclined to sell their shares on the market more quickly and at greater discounts than would be the case with the securities of a seasoned issuer. The following factors may add to the volatility in the price of our shares: actual or anticipated variations in our quarterly or annual operating results; acceptance of our inventory of games; government regulations, announcements of significant acquisitions, strategic partnerships or joint ventures; our capital commitments and additions or departures of our key personnel. Many of these factors are beyond our control and may decrease the market price of our shares regardless of our operating performance. We cannot make any predictions or projections as to what the prevailing market price for our shares will be at any time, including as to whether our shares will sustain their current market prices, or as to what effect the sale of shares or the availability of shares for sale at any time will have on the prevailing market price.

Shareholders should be aware that, according to SEC Release No. 34-29093, the market for penny stocks has suffered in recent years from patterns of fraud and abuse. Such patterns include (1) control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer; (2) manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases; (3) boiler room practices involving high-pressure sales tactics and unrealistic price projections by inexperienced sales persons; (4) excessive and undisclosed bid-ask differential and markups by selling broker-dealers; and (5) the wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along with the resulting inevitable collapse of those prices and with consequent investor losses. Our management is aware of the abuses that have occurred historically in the penny stock market. Although we do not expect to be in a position to dictate the behavior of the market or of broker-dealers who participate in the market, management will strive within the confines of practical limitations to prevent the described patterns from being established with respect to our securities. The occurrence of these patterns or practices could increase the volatility of our share price.

The market price of our common stock may be volatile and adversely affected by several factors.

The market price of our common stock could fluctuate significantly in response to various factors and events, including, but not limited to:

● our ability to integrate operations, technology, products and services;

● our ability to execute our business plan;

● operating results below expectations;

● our issuance of additional securities, including debt or equity or a combination thereof;

● announcements of technological innovations or new products by us or our competitors;

 

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● loss of any strategic relationship;

● industry developments, including, without limitation, changes in healthcare policies or practices;

● economic and other external factors;

● period-to-period fluctuations in our financial results; and

● whether an active trading market in our common stock develops and is maintained.

 

In addition, the securities markets have from time to time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of our common stock. Issuers using the Alternative Reporting standard for filing financial reports with OTC Markets are often subject to large volatility unrelated to the fundamentals of the company.

Our chief executive officer has control over key decision making as a result of his control of a majority of our voting stock.

Owen Dukes, our President and Chief Executive Officer, is able to exercise voting rights with respect to a majority of the voting power of our outstanding capital stock and therefore has the ability to control the outcome of matters submitted to our stockholders for approval.

This concentrated control could also discourage a potential investor from acquiring our common stock due to the limited voting power of such stock relative to the Series A Preferred Stock, $0.01 par value per share, held by Mr. Dukes and might harm the trading price of our common stock. As a board member and officer, Mr. Dukes owes a fiduciary duty to our stockholders and must act in good faith in a manner he reasonably believes to be in the best interests of our stockholders. As a stockholder, even a controlling stockholder, Mr. Dukes is entitled to vote his shares in his own interests, which may not always be in the interests of our stockholders generally.

Future sales of common stock or other dilutive events may adversely affect prevailing market prices for our common stock.

As of June 30th, 2016, we had 300 million authorized shares of Common Stock, of which 188,533,687 shares of our Common Stock were issued and outstanding.

On the 3 May, 2016 The State of Delaware approved the amendment of the Amended and restated Certificate of Incorporation of the company that the total number of shares of all classes of stock that the company shall have the authority to issue 300,000,000 of which 298,000,000 are shares of common stock, par value $0.01 per share and to designate a new series of Preferred B Convertible Stock with the number of such series shall be One Million (1,000,000) , par value $0.01 with the following limitations and restrictions.

On the 14th July, 2016 The State of Delaware approved the amendment of the Amended and restated Certificate of Incorporation of the company that the total number of shares of all classes of stock that the company shall have the authority to issue 750,000,000 of which 748,000,000 are shares of common stock, par value $0.01.

The holders of the Preferred B Series shall not be entitled to have any voting rights.

The holders of the Preferred B Series shall not be entitled to receive any dividends.

 

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The holders of the Preferred B Series shall have the Right to Convert each share after twelve (12) months from the date of issuance into a number of shares of fully paid and non-assessable shares of Common Stock based upon the average closing bid price for the Company common stock for each of the ten (10) consecutive trading days with a discount of fifty percent (50%).

Our board of directors has the authority, without further action or vote of our stockholders, to issue all or any part of the shares of our Common Stock that are authorized for issuance and neither issued nor reserved for issuance. Additionally, we require additional funds to continue to meet our liquidity needs and maintain our operations as presently conducted and to realize our business plan. Such stock issuances may be made at a price that reflects a discount from the then-current trading price of our Common Stock. In order to raise capital that we need at today's stock prices, we would likely need to issue securities that are convertible into or exercisable for a significant number of shares of our Common Stock.

The shares of Common Stock issuable upon conversion of our securities or the outstanding shares are saleable without restriction. Any of these issuances will dilute the percentage ownership interests of our current stockholders, which will have the effect of reducing their influence on matters on which our stockholders vote, and might dilute the book value and market value of our Common Stock.

Our board of directors' right to authorize the issuance of additional shares of preferred stock could adversely impact the rights of holders of our common stock.

Our board of directors currently has the right to designate and authorize the issuance of our preferred stock, in one or more series, with such voting, dividend and other rights as our directors may determine. The board of directors can designate new series of preferred stock without the approval of the holders of our Common Stock. The rights of holders of our Common Stock may be adversely affected by the rights of any holders of shares of preferred stock that may be issued in the future, including without limitation dilution of the equity ownership.

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 resultant 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.

Anti-takeover provisions may impede the acquisition of our company.

Certain provisions of the Delaware Revised Statutes have anti-takeover effects and may inhibit a non-negotiated merger or other business combination. These provisions are intended to encourage any person interested in acquiring us to negotiate with, and to obtain the approval of, our board of directors in connection with such a transaction. However, certain of these provisions may discourage a future acquisition of us, including an acquisition in which the shareholders might otherwise receive a premium for their shares. As a result, shareholders who might desire to participate in such a transaction may not have the opportunity to do so.

Our financials are not independently audited, which could result in errors and/or omissions in our financial statements if proper standards are not applied.

Although the Company is confident with its accounting firm, we are not required to have our financials audited by a certified Public Company Accounting Oversight Board (“PCAOB”). As such, our accountants do not have a third party reviewing the accounting. Our accountants may also not be up to date with all publications and releases put out by the PCAOB regarding accounting standards and treatments. This could mean that our unaudited financials may not properly reflect up to date standards and treatments resulting misstated financials statements.

 

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We may become involved in securities class action litigation that could divert management’s attention and harm our business.

The stock market in general, and the shares of early stage companies in particular, have experienced extreme price and volume fluctuations. These fluctuations have often been unrelated or disproportionate to the operating performance of the companies involved. If these fluctuations occur in the future, the market price of our shares could fall regardless of our operating performance. In the past, following periods of volatility in the market price of a particular company’s securities, securities class action litigation has often been brought against that company. If the market price or volume of our shares suffers extreme fluctuations, then we may become involved in this type of litigation, which would be expensive and divert management’s attention and resources from managing our business.

As a public company, we may also from time to time make forward-looking statements about future operating results and provide some financial guidance to the public markets. Our management has limited experience as a management team in a public company and as a result, projections may not be made timely or set at expected performance levels and could materially affect the price of our shares. Any failure to meet published forward-looking statements that adversely affect the stock price could result in losses to investors, stockholder lawsuits or other litigation, sanctions or restrictions issued by the SEC.

Our common stock is currently deemed a “penny stock,” which makes it more difficult for our investors to sell their shares.

The SEC has adopted Rule 15g-9 which establishes the definition of a “penny stock,” for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require that a broker or dealer approve a person’s account for transactions in penny stocks, and the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.

In order to approve a person’s account for transactions in penny stocks, the broker or dealer must obtain financial information and investment experience objectives of the person, and make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.

The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which, in highlight form sets forth the basis on which the broker or dealer made the suitability determination, and that the broker or dealer received a signed, written agreement from the investor prior to the transaction.

Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult for investors to dispose of our common stock if and when such shares are eligible for sale and may cause a decline in the market value of its stock.

Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stock.

As an issuer of “penny stock,” the protection provided by the federal securities laws relating to forward-looking statements does not apply to us.

Although federal securities laws provide a safe harbor for forward-looking statements made by a public company that files reports under the federal securities laws, this safe harbor is not available to issuers of penny stocks. As a result, we will not have the benefit of this safe harbor protection in the event of any legal action based upon a claim that the material provided by us contained a material misstatement of fact or was misleading in any material respect because of our failure to include any statements necessary to make the statements not misleading. Such an action could hurt our financial condition.

 

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As an issuer not required to make reports to the Securities and Exchange Commission under Section 13 or 15(d) of the Securities Exchange Act of 1934, holders of restricted shares may not be able to sell shares into the open market as Rule 144 exemptions may not apply.

Under Rule 144 of the Securities Act of 1933 holders of restricted shares, may avail themselves of certain exemption from registration is the holder and the issuer meet certain requirements. As a company that is not required to file reports under Section 13 or 15(d) of the Securities Exchange Act, referred to as a non-reporting company, we may not, in the future, meet the requirements for an issuer under 144 that would allow a holder to qualify for Rule 144 exemptions. In such an event, holders of restricted stock would have to utilize another exemption from registration or rely on a registration statement to be filed by the Company registered the restricted stock. Currently, the Company has no plans of filing a registration statement with the Commission.

Securities analysts may elect not to report on our common stock or may issue negative reports that adversely affect the stock price.

At this time, no securities analysts provide research coverage of our common stock, and securities analysts may not elect not to provide such coverage in the future. It may remain difficult for our company, with its small market capitalization, to attract independent financial analysts that will cover our common stock. If securities analysts do not cover our common stock, the lack of research coverage may adversely affect the stock’s actual and potential market price. The trading market for our common stock may be affected in part by the research and reports that industry or financial analysts publish about our business. If one or more analysts elect to cover our company and then downgrade the stock, the stock price would likely decline rapidly. If one or more of these analysts cease coverage of our company, we could lose visibility in the market, which, in turn, could cause our stock price to decline. This could have a negative effect on the market price of our common stock.

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

We have never paid cash dividends on our capital stock and do not anticipate paying cash dividends on our capital stock in the foreseeable future. The payment of dividends on our capital stock will depend on our earnings, financial condition and other business and economic factors affecting us at such time as the board of directors may consider relevant. If we do not pay dividends, our common stock may be less valuable because a return on your investment will only occur if the common stock price appreciates.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 We make forward-looking statements under the “Summary,” “Risk Factors,” “Business,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in other sections of this Offering Circular. In some cases, you can identify these statements by forward-looking words such as “may,” “might,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential” or “continue,” and the negative of these terms and other comparable terminology. These forward-looking statements, which are subject to known and unknown risks, uncertainties and assumptions about us, may include projections of our future financial performance based on our growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements. In particular, you should consider the numerous risks and uncertainties described under “Risk Factors.”

While we believe we have identified material risks, these risks and uncertainties are not exhaustive. Other sections of this Offering Circular describe additional factors that could adversely impact our business and financial performance. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible to predict all risks and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

 

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Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy or completeness of any of these forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. We are under no duty to update any of these forward-looking statements after the date of this Offering Circular to conform our prior statements to actual results or revised expectations, and we do not intend to do so.

Forward-looking statements include, but are not limited to, statements about:

● our business’ strategies and investment policies;

● our business’ financing plans and the availability of capital;

● potential growth opportunities available to our business;

● the risks associated with potential acquisitions by us;

● the recruitment and retention of our officers and employees;

● our expected levels of compensation;

● the effects of competition on our business; and

● the impact of future legislation and regulatory changes on our business.

We caution you not to place undue reliance on the forward-looking statements, which speak only as of the date of this Offering Circular.

USE OF PROCEEDS

The following Use of Proceeds is based on estimates made by management. The Company planned the Use of Proceeds after deducting estimated offering expenses estimated to be $25,000. Management prepared the milestones based on three levels of offering raise success: 25% of the Maximum Offering proceeds raised ($125,000), 50% of the Maximum Offering proceeds raised ($250,000), 75% of the Maximum Offering proceeds raised ($375,000), and the Maximum Offering proceeds raised of $500,000 through the offering. The costs associated with operating as a public company are included in all our budgeted scenarios and management is responsible for the preparation of the required documents to keep the costs to a minimum.

Although we have no minimum offering, we have calculated used of proceeds such that if we raise 25% of the offering is budgeted to sustain operations for a twelve-month period. 25% of the Maximum Offering is sufficient to keep the Company current with its public listing status costs with prudently budgeted funds remaining which will be sufficient to complete the development of our marketing package. If the Company were to raise 50% of the Maximum Offering, then we would be able to expand our marketing outside the US. Raising the Maximum Offering will enable the Company to implement our full business. If we begin to generate profits, we plan to increase our marketing and sales activity accordingly.

 

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Spirit intends to use the proceeds from this offering as follows:

Application of	25% of Proceeds					50% of Maximum					75% of Maximum					Maximum
Proceeds	$		% of Total			$		% of total			$		% of total			$		% of total
Total Offering Proceeds		125,000		100	%		250,000		100.00			375,000		100.00			500,000		100.00
Offering Expenses
Legal & Professional Fees		5,000		4.0	%		5,000		2.0	%		5,000		1.3	%		5,000		1.0	%
Accounting Fees		3,500		2.8	%		3,500		1.4	%		3,500		0.9	%		3,500		0.7	%
Admin Fees		1,500		1.2	%		1,500		0.6	%		1,500		0.4	%		1,500		0.3	%
Total Offering Expenses		10,000		8.0	%		10,000		4.0	%		10,000		2.7	%		10,000		2.0	%
									0.0	%				0.0	%				0.0	%
Net Proceeds from Offering		115,000		92.0	%		240,000		96.0	%		365,000		97.3	%		490,000		98.0	%
Use of Net Proceeds
Research and Development		25,000		20.0	%		55,000		22.0	%		75,000		20.0	%		100,000		20.0	%
Legal and Professional Fees		10,000		8.0	%		20,000		8.0	%		30,000		8.0	%		45,000		9.0	%
Marketing and Sales		45,000		36.0	%		85,000		34.0	%		140,000		37.3	%		200,000		40.0	%
Working Capital		35,000		28.0	%		80,000		32.0	%		120,000		32.0	%		145,000		29.0	%
Total Use of Net Proceeds		115,000		92.0	%		240,000		96.0	%		365,000		97.3	%		490,000		98.0	%

Notes:

The foregoing represents our best estimate of the allocation of the proceeds of this offering based on planned use of funds for our operations and current objectives.

Under Net Proceeds, Legal and accounting are Legal and auditor/accounting fees not related to this offering. Assuming we raise the Maximum Offering, we believe there will be additional costs associated with implementing our business plan that will require greater attention from our professional advisors, including the possibility of filing a registration statement on Form 10 or Form S-1 which would greatly increase costs associated with keeping compliant with reporting requirements.

Under Net Proceeds, we have based our calculation and division of funds on the current needs of the Company. However, our market place is constantly changing. Management may, depending on circumstances, be required to divert funds from one heading to another as the business demands. For example, successful expanded marketing in the US may require us to use more resources in IT to keep up with demand. Likewise, if our marketing efforts are less fruitful than anticipated, we may divert funds to improving the underlying product.

We currently consider the foregoing project our priority and intend to use the proceeds from this offering for such projects.

Clarified as to term use and disclosure added that fees increase with the offering size as it is anticipated that a greater size of raise will increase the corporation’s activities which will result in a greater number of transactions thus resulting in the need for additional disclosure and accounting.

DIVIDEND POLICY

We have not declared or paid any dividends on our common stock. We intend to retain earnings for use in our operations and to finance our business. Any change in our dividend policy is within the discretion of our board of directors and will depend, among other things, on our earnings, debt service and capital requirements, restrictions in financing agreements, if any, business conditions, legal restrictions and other factors that our board of directors deems relevant.

DILUTION

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

 

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After giving effect to (i) the sale of our common stock in this offering at an assumed public offering price of $0.03 per share and after deducting the estimated offering expenses payable by us and (ii) the issuance of a total of 44,601,962 shares of common stock per the merger with Clear Arts, Inc. to our majority shareholder in the fourth quarter of 2015, our adjusted net tangible book value at December, 2015 would have been $ $1,141,038 or $0.01 per share, assuming maximum offering size. This represents an immediate increase in net tangible book value per share of $0.0095 to the existing stockholders and dilution in net tangible book value per share of $0.02 to new investors who purchase shares in the offering assuming maximum offering size.

The following table sets forth the estimated net tangible book value per share after the offering and the dilution to persons purchasing Common Stock based on the foregoing minimum and maximum offering assumptions.

	25% of the Offering Subscribed		50% of the Offering Subscribed		75% of the Offering Subscribed		100% of the Offering Subscribed
Assumed public offering price per share	$	0.03	$	0.03	$	0.03	$	0.03
Net tangible book value per share at December 31, 2015, as adjusted	$	0.0022	$	0.0022	$	0.0022	$	0.0022
Increase in net tangible book value per share to the existing stockholders attributable to this offering	$	0.0032	$	0.0057	$	0.0077	$	0.0094
Adjusted net tangible book value per share after this offering	$	0.0053	$	0.0078	$	0.0099	$	0.0116
Dilution in net tangible book value per share to new investors	$	0.0247	$	0.0222	$	0.0201	$	0.0184

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

The following discussion of our financial condition and results of operations should be read in conjunction with the unaudited financial statements and the notes thereto of the Company included in this Offering Circular. The following discussion contains forward-looking statements. Actual results could differ materially from the results discussed in the forward-looking statements. See “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” above.

Overview

S.P.O. (SOFTWARE PERFORMANCE OPTIMIZATION) GLOBAL INC, (“we” or “SPO” or the “Company”) is an emerging technology company that is focused on its unique performance optimization software IP for all enterprise applications. The focus of SPO will be to build its revenues with a growing customer base around the world and to create maximum shareholder value. The company has recently purchased the performance software testing company Reflective Solutions Ltd that sells its software and consultancy across world-wide markets. SPO is focusing on increasing the revenue in Reflective Solutions with expansion in the North American Markets. The principle software products of Reflective Solutions is "Stress Tester", a robust Performance Stress testing solution for large enterprise applications and the product "Sentinel" that is providing enterprise customers an intelligent monitoring solution 24/7 software as a service (SAS).

The Company was originally incorporated under the laws of the State of Delaware in September 1981 under the name "Applied DNA Systems, Inc." On November 16, 1994, it changed its name to "Nu-Tech Bio-Med, Inc." On December 23, 1998, it again changed its name to "United Diagnostic, Inc." Effective April 21, 2005, it acquired (the "Acquisition Transaction") 100% of the outstanding capital stock of SPO Medical Equipment Ltd., a company incorporated under the laws of the State of Israel ("SPO Ltd."), pursuant to a Capital Stock Exchange Agreement dated as of February 28, 2005 between the Company, SPO Ltd. and the shareholders of SPO Ltd., as amended and restated on April 21, 2005 (the "Exchange Agreement"). In exchange for the outstanding capital stock of SPO Ltd., the Company issued to the former shareholders of SPO Ltd. a total of 5,769,106 shares of the Company's common stock, par value $0.01 per share ("Common Stock"), representing approximately 90% of the Common Stock then issued and outstanding after giving effect to the Acquisition Transaction. As a result of the Acquisition Transaction, SPO Ltd. became a wholly owned subsidiary of the Company as of April 21, 2005 and, subsequent to the Acquisition Transaction, the Company changed its name to "SPO Medical Inc." Upon consummation of the Acquisition Transaction, the SPO effectuated a forward subdivision of it’s Common Stock issued and outstanding on a 2.65285:1 basis.

 

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Recent Developments

On the 23rd of December, 2015, SPO executed a Stock Exchange Agreement (Merger) for the purchase of a 93.94% interest in the UK company, Reflective Solutions Ltd. (“Reflective”), a performance software testing company. Under the SEA, the selling shareholders of Reflective received 1433 shares of SPO restricted common stock for every 1 share held, for a total issuance by SPO of 46,980,905 restrictive common shares.

The Merger is accounted for as a reverse-merger and recapitalization. Reflective is the acquirer for financial reporting purposes and SPO is the acquired company. Consequently, the assets and liabilities and the operations that are reflected in the historical financial statements prior to the Merger are those of Reflective and are recorded at the historical cost basis of Reflective, and the consolidated financial statements after completion of the Merger include the assets, liabilities and operations of SPO and Reflective, from the closing date of the Merger. Therefore, the historical equity accounts of Reflective including par value per share, share and per share numbers included in the 2014 financial statements, have been adjusted to reflect the number of shares received in the Merger.

On December 31, 2015, SPO Global entered into a Purchase Agreement with Elepho, Inc., a DE company, owned by Michael Braunold, the Company’s former CEO and President, to sell its remaining interests in SPO Medical Equipment, LTD. SPO Global had previously entered into a Settlement Agreement with Mr. Braunold, wherein it granted him a perpetual, exclusive license to the IP and SPO technology held by SPO Medical Ltd, in exchange for, among other things, his release of all sums owed to him by the Company.

Revenue

Revenues for the period ended December 31, 2015 were $301,136 compared to $370,773 for the period ended December 31, 2014. The decrease in revenues for the period ended December 31, 2015 as compared to the period ended December 31, 2014 is attributable to a change in ownership and management in 2015.

For the nine months ended September 30, 2016 revenues for the Company were $95,685 compared to $266,911 for the nine months ended September 30, 2015. The loss in revenues is attributable to a change in ownership in 2015.

Cost of revenue for the period ended December 31, 2015 was $13,111 for a gross profit of $288,025 compared to $28,536 in costs of revenue and gross profits of $342,237 for the period ended December 31, 2014.

For the nine months ended September 30, 2015 and the nine months ended September 30, 2014, there were cost of revenues.

Operating Expenses

Research and Development Expenses

Research and development expenses consist primarily of expenses incurred in the design, development and testing of our products.

These expenses consist primarily of software coding, developers and testing services, for the period ended December 31, 2015 were $123,825 compared to $23,945 for the period ended December 31, 2014. The increase in research and development is primarily attributable to new investment and expansion of the software team.

For the nine months ended September 30, 2016, research and development expenses were $87,406 compared to $148,559 for the nine months ended September 30, 2015 as new investment and expansion of the software team had not been implemented as of September 30, 2015.

 

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Selling and Marketing Expenses

Selling and marketing expenses consist primarily of costs relating to compensation attributable to consultants for the provision of e shots and email campaigns and trade shows. Selling and marketing expenses for the period ended December 31, 2015 were $27,051 compared to $49,390 for the period ended December 31, 2014. The decrease in selling and marketing expenses in the period ended December 31, 2015 as compared to the period ended December 31, 2014 is primarily attributable to the change of ownership and new management.

For the nine months ended September 30, 2016, selling and marketing expenses were $10,439 compared to $28,436 for the nine months ended September 30, 2015.

General and Administrative Expenses

General and administrative expenses primarily consist of salaries and other related costs for personnel in executive and other administrative functions. Other significant costs include professional fees for legal and accounting services. General and administrative expenses for the 2015 Period were $424,197 compared to $420,308 for the 2014 Period. The increase in general and administrative expenses is primarily attributable to the change of ownership and new management.

For the nine months ended September 30, 2016, general and administrative expenses were $198,645 compared to $305,466 for the nine months ended September 30, 2015.

Net Loss

For the period ended December 31, 2015 and the period ended December 31, 2014, we had a net loss of $329,925 and $172,699 respectively. The increase in net loss for the period ended December 31, 2015 compared to the period ended December 31, 2014 is primarily attributable to the change of ownership and new management.

For the nine months ended September 30, 2016, we had a net loss of $7,147,862 compared to $24,945 for the nine months ended September 30, 2015. The increase of net loss is attributed mainly to financial expense.

Liquidity and Capital Resources

The accompanying unaudited financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying unaudited financial statements, during the year ended December 31, 2015, the Company had a working capital deficit of $2,170,597. For the nine months ended September 30, 2016, the Company had a working capital deficit of $2,449,782. These and other factors raise substantial doubt about the Company’s ability to continue as a going concern. The unaudited financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.

At December 31, 2015, the Company had cash on hand of $141,637. For the nine months ended September 30, 2016 the Company had $21,568. We may be required to raise additional funds, particularly if we are unable to generate positive cash flow as a result of our operations. We estimate that based on current plans and assumptions, that our cash will not be sufficient to satisfy our cash requirements under our present operating expectations, without further financing, for up to 12 months. In order to continue as a going concern, develop a reliable source of revenues, and achieve a profitable level of operations the Company will need, among other things, additional capital resources. Management’s plans to continue as a going concern include raising additional capital through borrowings and the sale of common stock. No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing, or cause substantial dilution for our stockholders, in case of an equity financing.

 

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Operating Activities

During the year ended December 31, 2015, we used $5,782 of net cash in operating activities. Non-cash adjustments included $4,290 related to shares issued for services, $108,283 of derivative expense, and $8,725 related to the issuance of warrants, and net changes in operating assets and liabilities of $214,409 primarily attributable to an increase in accounts receivable of $38,835 and increase in total accounts payable of $ 138,788.

During the nine months ended September 30, 2016, we used $(194,824) of net cash in operating activities. Non-cash adjustments included $22,260 related to shares issued for services, $390,487 of derivative expense, and $6,556,339 related to shares issued for financing, and net changes in operating assets and liabilities of ($16,048) primarily attributable to a decrease in accounts receivable of ($20,758), a decrease in total accounts payable of ($52,733), an increase in prepaid expenses and other receivables of $8,849, and an increase in accrued expenses and other liabilities of $48,594.

Financing Activities

During the year ended December 31, 2015, financing activities provided $159,846. We received proceeds from loans of $68,474 and proceeds from capital contribution of $91,372.

During the nine months ended September 30, 2016, financing activities provided $6,015. We received proceeds from sale of our preferred B shares of $17,500 and proceeds from loans of $93,575. We paid $105,060 toward the repayment of loans.

Critical Accounting Policies and Estimates

Use of estimates

The preparation of the unaudited financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Significant estimates during the years ended December 31, 2015 and 2014 include the useful lives of website development cost, beneficial conversion of convertible notes payable, the valuation of derivative liabilities and the valuation of stock-based compensation.

Revenue recognition

The Company follows ASC 605-10 “Revenue Recognition” and recognizes revenue when all the conditions for revenue recognition are met: (i) persuasive evidence of an arrangement exists, (ii) collection of the fee is probable, (iii) the sales price is fixed and determinable and (iv) services have been rendered.

Revenue is derived from subscription fees and the recovery of photo infringement settlement fees. The Company collects settlement fees for commercial and editorial uses from operating companies. The Company provides infringement protection and monitoring services to copyright owners under which copyright owners retain the Company to identify and collect settlement payments from Internet users who have infringed on their copyrights. Revenue is recognized when the Company collects a settlement fee or upon entering into a settlement agreement which acts as a waiver to the infringement against the copyright owner. The Company reports its revenue at gross amounts in accordance with ASC 605-45 “Principal Agent Considerations” because it is responsible for fulfillment of the service, has substantial latitude in setting price, assumes the credit risk and it is responsible for the payment of all obligations incurred for legal and debt collection fees.

Derivative Liabilities

The Company follows the provisions of FASB ASC Topic No. 815-40, “Derivatives and Hedging - Contracts in an Entity’s Own Stock”, for the embedded conversion options that were accounted for as derivative liabilities at the date of issuance and adjusted to fair value through earnings at each reporting date. In accordance with ASC 815, the Company has bifurcated the conversion feature of the convertible Debentures, along with any free-standing derivative instruments and recorded derivative liabilities on their issuance date. The Company uses the Black-Scholes model to value the derivative liabilities.

 

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BUSINESS

Our Business

SPO Global Inc. (“we” or the “Company”) is an emerging technology company that is focused on selling its unique performance testing optimization and monitoring software IP for all enterprise applications. The focus of SPO is to build the company into a major player in a billion-dollar market.

The Company is incorporated under the laws of the State of Delaware.

On the 23rd of December, 2015 SPO GLOBAL, INC. (OTC:SPOM) executed a Stock Exchange Agreement (Merger) for the purchase of a 93.94% interest in the UK company, Reflective Solutions Ltd. (“Reflective”), a performance software testing company . Under the SEA, the selling shareholders of Reflective received 1433 shares of SPO restricted common stock for every 1 share held, for a total issuance by SPO of 46,980,905 restrictive common shares.

The Merger is accounted for as a reverse-merger and recapitalization. Reflective is the acquirer for financial reporting purposes and SPO is the acquired company. Consequently, the assets and liabilities and the operations that are reflected in the historical financial statements prior to the Merger are those of Reflective and are recorded at the historical cost basis of Reflective, and the consolidated financial statements after completion of the Merger include the assets, liabilities and operations of SPO and Reflective, from the closing date of the Merger. Therefore, the historical equity accounts of Reflective including par value per share, share and per share numbers included in the 2014 financial statements, have been adjusted to reflect the number of shares received in the Merger.

On the 31st December 2015, SPO Global entered into a Purchase Agreement with Elepho, Inc., a DE company, owned by Michael Braunold, the Company’s former CEO and President, to sell its remaining interests in SPO Medical Equipment, LTD. The Company had previously entered into a Settlement Agreement with Mr. Braunold, wherein the Company granted him a perpetual, exclusive, license to the IP and SPO technology held by SPO Medical Ltd, in exchange for, among other things, his release of all sums owed to him by the Company.

Background of Reflective Solutions Ltd

Reflective Solutions Ltd is a United Kingdom Entity that was formed in 1998 as a Java Based consultancy.

In 2006 the company began the development of a performance testing product with the brand name “Stress Tester”. This is a software solution that has been uniquely designed to test a variety of Enterprise Software Applications that require extensive performance testing before a rollout as well testing on applications that have been deployed.

In 2012 the company started developing a product called “Sentinel” that has been designed to provide continuous monitoring and performance on server applications. In 2015 the company has started to develop a SAS (Software as Service) solution to its existing customers as well as to its database of potential customers. The company has coded and developed its own unique IP (Intellectual Property) that is continually being supported and maintained by the company development team. The company has a long history of working with leading enterprise customers throughout the world, and has developed extensive relationships with large resellers and integrators and consulting firms.

 

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Reflective Solutions Software

The company sells two main software products that have been developed by the company and have proven their robust performance for customers. As illustrated below we position our company in the market.

Reflective Solutions “Stress Tester”

The company main software solution is called “Stress Tester” an Intelligent Performance Testing tool. Stress Tester enables users to quickly create real-life performance tests, and identify potential performance problems and eliminates bottlenecks in all web and server applications. Stress Tester is able to create real world testing scenarios across multiple sites around the world so that our customers can catch problems early, before they show up in production and in rollout.

Our enterprise class stress testing software provides comprehensive analysis of the performance, scalability and load capacity of our customers’ applications, whilst simultaneously monitoring the underlying server and infrastructure resources. StressTester™ is proven to reduce project timescales, and allows performance testing to be undertaken more regularly and more efficiently, whilst considerably lowering the risks of incorrect testing and saving our customers substantial cost savings.

 

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Reflective Solutions “Stress Tester” and MAXIMO (IBM Software)

The company is a partner with IBM and has developed our product Stress Tester to closely work with IBM leading software solution called Maximo. Stress Tester unique way of working with Maximo gives it a leading a market edge and provides the company with a large market opportunity. Below is a Gartner magic circle illustration of Maximo position in the market for EAM (Enterprise Asset Management Solutions).

Our Key advantages with our products for the IBM Maximo EAM solution are illustrated as follows below.

Reflective Solutions “Sentinel”

The company in 2014 through to the end of 2015 developed a new product called “Sentinel” which is a 24 /7 Performance Monitoring Tool that actively monitors the performance and availability of critical transactions within our customers recorded user paths applications (including IBM Maximo) from the perspectives of the users and the underlying systems.

 

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Fast And Powerful: “Sentinel” leverages the proven test scenario design capabilities of “Stress Tester” to quickly create realistic monitoring profiles. Wizards, checkers, and pickers make designing complex use cases simple and a similar GUI-based approach is used when configuring monitoring profiles in “Sentinel.”

Below is an illustration of our new product “Sentinel”.

Strategy and 12 Month Outlook

SPO Global Inc.’s mission is to build a profitable business that focuses on unique performance and monitoring testing software with a SAS (software as Service) model as well as selling direct or through partners to enterprises throughout the world.

SPO Global and its subsidiary focus on growing the market will thereby increase stockholder value.

Below is an illustration of our business strategy.

 

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To achieve our objectives, we are pursuing the following business strategies:

Increasing growth potential by pursuing new market opportunities. Through our new email marketing campaign as well as attending focused user group trade shows. We are also developing our relationships with large software distributors and resellers in a number of key markets.

The company recently signed an exclusive distribution agreement in Japan and the USA.

Partner with highly qualified, focused companies, internationally. We intend to continue to seek out collaborative arrangements with leading international Software Companies and develop our existing relationship with IBM where we are a registered partner.

We have identified a number of new potential partners for our products, are in discussion with a significant worldwide partner although there can be no assurance that we will be able to enter into any such collaborative arrangement.

Research and Development. Subject to raising additional capital, our research and development strategy in the near future will focus on developing our software across a broad range of platforms including SAP, Microsoft and Oracle.

Significant Customers

In 2015 the company sold its Stress Tester software to a number of significant large enterprises. LAX (Los Angeles Airport ) LHR (London Heathrow Airport ) Nova Scotia Power in Halifax , Canada , Koch Industries USA, Melbourne Water, Australia.

In 2016, the company completed the successful integration of its Stress Tester software with Dynergy Energy based in Houston. The company also completed its integration with Transport of London for its new “Sentinel” software.

The company is in discussion with a number of US Government Local States that could lead to significant revenues for the future. The Company is also in discussion with a leading consultancy enterprise firm, with a worldwide market share, that is in discussion in looking at both of our company products for their customers.

Development

All the software coding and development takes place in Sofia, Bulgaria, the team are all full time employees of Reflective Solutions Bulgaria Ltd, which is a 100% owned company by SPO.

 

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Marketing and Sales Organization

Following the restructuring of our business operations in 2015, we are actively focused on a number of e mail campaigns and attending focused trade shows in North America and Europe.

The company has recently hired a marketing focused person who is working full time in building up the company presence and producing the e mail campaign e shots.

The main focus of sales is through the company CEO, who leads the sales directly and works with consultants and resellers.

Patents and Proprietary Information

We currently are considering registering a number of patents though there is no current application made as of this time.

Employees

As of December 2015, we had 7 employees working on a full time basis. None of these employees are subject to collective bargaining agreements.

Competition

We believe that most of the companies that offer similar solutions do not have the unique way of functionality and ease of use that our products currently offer.

We have a significant price advantage as well as unique functionality that enables potential customers to make significant cost savings and implement our technology faster and easier with substantially less cost than the competition. Our competitors include Neosyst a French privately owned company as well as HP Loadrunner the market leader in Performance Testing Software.

Market

According to a report published by Technavio, a global technology research and advisory firm, adoption of specialized testing will be a key driver for market growth. The software testing industry has been undergoing a series of change in service offerings, business innovation, and engagement models. Companies are expanding their service portfolios from traditional functional testing to specialized testing following the popularity of SMAC technologies among enterprises.

Security, mobile, Big Data, cloud, service-oriented architecture (SOA), SAP/Oracle, enterprise resource planning, and performance monitoring testing are the key focus areas for companies that build specialized testing teams. These technologies have become a value creator and feature differentiator for end products. The rise in test-driven developments has encouraged vendors to offer position testing as a stand-alone service that helps companies to create distinct value propositions at low costs.

 

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Further, the report states that carrying out labor-intensive processes will be a challenge for the market. As a result, growth in the market is expected to increase by at least 10% by 2020.[1]

Regulation

There are no significant regulations that affect our business.

General

The Company is currently headquartered in Woburn, MA. The Company's shares of common stock are publicly traded on the OTC Pinksheets under the symbol "SPOM".

MANAGEMENT

Directors of the corporation are elected by the stockholders to a term of one year and serve until a successor is elected and qualified. Officers of the corporation are appointed by the Board of Directors to a term of one year and serves until a successor is duly appointed and qualified, or until he or he is removed from office. The Board of Directors has no nominating, auditing or compensation committees. The Board of Directors also appointed our officers in accordance with the Bylaws of the Company, and per employment agreements negotiated between the Board of Directors and the respective officer. Currently, there are no such employment agreements. Officers listed herein are employed at the whim of the Directors and state employment law, where applicable.

The name, address, age and position of our officer and director is set forth below:

Name	Age	First Year as Director or Officer	Position
Owen Dukes	46	2015	Chairman, CEO
Michael Braunold	56	1998	Director

The term of office of each director of the Company ends at the next annual meeting of the Company's stockholders or when such director's successor is elected and qualifies. No date for the next annual meeting of stockholders is specified in the Company's bylaws or has been fixed by the Board of Directors. The term of office of each officer of the Company ends at the next annual meeting of the Company's Board of Directors, expected to take place immediately after the next annual meeting of stockholders, or when such officer's successor is elected and qualifies.

Directors are entitled to reimbursement for expenses in attending meetings but receive no other compensation for services as directors. Directors who are employees may receive compensation for services other than as director. No compensation has been paid to directors for services.

___________

1 “Global Outsourced Software Testing Market 2016-2020,” Technavio. July 2016

 

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Biographical Information

Owen Dukes – Chairman/Chief Executive Officer

Owen Dukes has twenty years of extensive industry experience. He has worked for Phoenix Software, the leading Microsoft reseller, as their UK channel manager from 1993 to 2000. Owen Dukes then worked as Business Development Manager for Surf Control PLC, from 2000 to 2001, developing their UK market to a multi-million pound enterprise. Also in 2000, he launched Arc Technology Distribution Ltd, and purchased two other distributors, Unidirect Ltd and IPconnect Ltd. Owen Dukes successfully sold his equity to the existing management in 2006.

In July 2005, Owen Dukes co-founded Thinspace Technology Inc. a publicly traded cloud application corporation and served as the CEO of the group. In May 2014 the company was sold to outside equity fund and currently serves on the UK board of directors. Mr. Owen Dukes as Chief Executive Officer of the company along with his seasoned corporate experience makes him well suited to confront the challenges our company faces.

Michael Braunold – Director

Prior to December 2015, he had been Chief Executive Officer of SPO Ltd. since March 1998 and resigned of all executive positions on December 23, 2015. Prior to March 1998, Mr. Braunold was Senior Director of Business Development at Scitex Corporation Ltd., a multinational corporation specializing in visual information communication. In such capacity, Mr. Braunold played a strategic role in managing a team of profess within the worldwide organization, including a period in the United States as Vice President of an American subsidiary of Scitex sionals assigned to M&A activities. During his 12-year tenure at Scitex, he held various positions. From March 2000 through September 2000, Mr. Braunold was also the Chief Executive Officer and Chairman of Ambient Corporation, a Delaware company, that specializes in the implementation of a proposed comprehensive high-speed communication infrastructure. Mr. Braunold obtained a Bachelor of Science degree with honors in Engineering and Management Sciences from Imperial College Business School, London.

Executive Compensation

The table below summarizes all compensation awarded to, earned by, or paid to our Officers and Directors who occupied such position as of the date of this Offering Circular, for all services rendered in all capacities to us for the period for the past 2 years. The Company does not have employment agreements with any of the persons named below (and has not presently entered into such agreements with any such persons), and does not pay them a salary or other compensation at the present time. We also do not currently have any benefits, such as health or life insurance, available to our employees.

Name and Position	Year	Salary ($)		Bonus ($)		Stock awards ($)		Option awards ($)		Non-equity incentive plan compensation ($)		Change in pension value and nonqualified deferred compensation earnings ($)		All other compensation ($)		Total ($)
Owen Dukes	2014		-0-		-0-		-0-		-0-		-0-		-0-		-0-		-0-
	2015		-0-		-0-		-0-		-0-		-0-		-0-		-0-		-0-
	2016		-0-		-0-		-0-		-0-		-0-		-0-		-0-		-0-
Michael Braunold	2014		-0-		-0-		-0-		-0-		-0-		-0-		-0-		-0-
	2015		-0-		-0-		-0-		-0-		-0-		-0-		-0-		-0-
	2016		-0-		-0-		-0-		-0-		-0-		-0-		-0-		-0-

 

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RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

On December 23, 2015, all of the issued and outstanding preferred stock (100 Series A shares) was acquired by Rodz Holding Ltd., a U.K. corporation, which is controlled by Owen Dukes, CEO of the Company. Each one share of Series A Preferred has voting rights equal to (x) 0.019607 multiplied by the total issued and outstanding Common Stock eligible to vote at the time of the respective vote (the "Numerator"), divided by (y) 0.49, minus (z) the Numerator. As a result Rodz Holding Ltd. has a controlling interest in the Company.

PRINCIPAL STOCKHOLDERS

The following table sets forth information as to the shares of common stock beneficially owned as of August 23, 2016, by (i) each person known to us to be the beneficial owner of more than 5% of our common stock; (ii) each Director; (iii) each Executive Officer; and (iv) all of our Directors and Executive Officers as a group. Unless otherwise indicated in the footnotes following the table, the persons as to whom the information is given had sole voting and investment power over the shares of common stock shown as beneficially owned by them. Beneficial ownership is determined in accordance with Rule 13d-3 under the Exchange Act, which generally means that shares of common stock subject to options currently exercisable or exercisable within 60 days of the date hereof are considered to be beneficially owned, including for the purpose of computing the percentage ownership of the person holding such options, but are not considered outstanding when computing the percentage ownership of each other person. The footnotes below indicate the amount of unvested options for each person in the table. None of these unvested options vest within 60 days of the date hereof.

Title of Class	Name of Beneficial Owner	Amount and Nature of  Beneficial Ownership		Voting Percentage			Voting Percentage After Offering1
Series A Preferred2	Rodz Holdings, Ltd.3		100		75.01	%		75.01	%
Common Stock	Michael Braunold		1,800,000		0.11	%		-	%
All Officers and Directors (2 persons)			1,604,534,977		75.12	%		-	%

_____________

1	Percentage based on 400,540,694 shares of common stock outstanding as of August 23, 2016.
2	Each one share of Series A Preferred has voting rights equal to (x) 0.019607 multiplied by the total issued and outstanding Common Stock eligible to vote at the time of the respective vote (the "Numerator"), divided by (y) 0.49, minus (z) the Numerator. As of August 23, 2016 the total issued and outstanding common shares was 400,540,694. Thus, Rodz Holdings, Ltd. has voting rights equal to 1,602,734,977 shares.
3	Rodz Holdings, Ltd. is wholly owned by our director, Owen Dukes.

 

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DESCRIPTION OF CAPITAL

The following summary is a description of the material terms of our capital stock and is not complete. You should also refer to our articles of incorporation, as amended and our bylaws, as amended, which are included as exhibits to the registration statement of which this Offering Circular forms a part.

We are authorized to issue up to 748,000,000 of common stock, par value $0.01 per share, and 2,000,000 shares of preferred stock, $0.001 value per share. The Company has designated exactly 100 shares of Series A Convertible Preferred Shares and 1,000,000 shares of Series B Preferred Shares.

As of the date of this offering, we have 400,540,694 shares of common stock and 100 Series A, 0 Series B Convertible Shares and 0 Series B shares of preferred stock outstanding. 

Common Stock

Voting

Each holder of our common stock is entitled to one vote for each share of common stock held on all matters submitted to a vote of stockholders. Any action at a meeting at which a quorum is present will be decided by a majority of the votes cast. Cumulative voting for the election of directors is not permitted.

Dividends

Holders of our common stock are entitled to receive dividends when, as and if declared by our Board of Directors out of funds legally available for payment, subject to the rights of holders, if any, of our preferred stock. Any decision to pay dividends on our common stock will be at the discretion of our Board of Directors. Our Board of Directors may or may not determine to declare dividends in the future. See “Dividend Policy.” The Board’s determination to issue dividends will depend upon our profitability and financial condition, and other factors that our Board of Directors deems relevant.

Liquidation Rights

In the event of a voluntary or involuntary liquidation, dissolution or winding up of our company, the holders of our common stock will be entitled to share ratably on the basis of the number of shares held in any of the assets available for distribution after we have paid in full all of our debts and after the holders of all outstanding preferred stock, if any, have received their liquidation preferences in full.

Preferred Stock

We are authorized to issue up to 2,000,000 shares of preferred stock. Our articles of incorporation authorize our Board to issue these shares in one or more series, to determine the designations and the powers, preferences and rights and the qualifications, limitations and restrictions thereof, including the dividend rights, conversion or exchange rights, voting rights (including the number of votes per share), redemption rights and terms, liquidation preferences, sinking fund provisions and the number of shares constituting the series. Our Board of Directors could, without stockholder approval, issue preferred stock with voting and other rights that could adversely affect the voting power and other rights of the holders of common stock and which could have the effect of making it more difficult for a third party to acquire, or of discouraging a third party from attempting to acquire, a majority of our outstanding voting stock.

Subject to the rights of the holders of any series of preferred stock, the number of authorized shares of preferred stock may be increased or decreased (but not below the number of shares thereof then outstanding) by resolution adopted by our Board of Directors and approved by the affirmative vote of the holders of a majority of the voting power of all outstanding shares of capital stock entitled to vote on the matter, voting together as a single class.

Currently, the Company has designated 2 series of preferred shares, 100 designated Series A Preferred Shares and 1,000,000 designated Series B Preferred Shares.

 

33

Voting

Each one share of Series A Preferred has voting rights equal to (x) 0.019607 multiplied by the total issued and outstanding Common Stock eligible to vote at the time of the respective vote (the "Numerator"), divided by (y) 0.49, minus (z) the Numerator. In essence, the entirety of the Series A Preferred have a combined voting right equal to approximately 75% at all times.

Except as otherwise required by law and except as to matters affecting the rights and preferences of the holders of the Series B Preferred, the Series B Preferred shall be non-voting and no holder of shares of the Series B Preferred shall be entitled to notice of any stockholders’ meeting, nor be entitled to vote on any matters on which the Common Stock or other series of Preferred Stock may be voted. Any matter affecting the rights and preferences of the holders of Series B Preferred shall require the affirmative vote of the holders of a majority of the issued and outstanding shares of Series B Preferred.

Dividends

Holders of our Series A and Series B Preferred are entitled to receive dividends when, as and if declared by our Board of Directors out of funds legally available for payment, subject to the rights of holders, if any, of our preferred stock. Any decision to pay dividends on our Series C Preferred will be at the discretion of our Board of Directors. Our Board of Directors may or may not determine to declare dividends in the future. See “Dividend Policy.” The Board’s determination to issue dividends will depend upon our profitability and financial condition, and other factors that our Board of Directors deems relevant.

Conversions

Series A Preferred have no conversion rights.

Holders of Series B Preferred may covert, at any time after twelve (12) months from issuance, each share of Series B Preferred at a rate of equal to the average closing bid price for the ten (10) previous consecutive trading days less a fifty percent (50%) discount.

Limitations on Liability and Indemnification of Officers and Directors

Delaware law authorizes corporations to limit or eliminate (with a few exceptions) the personal liability of directors to corporations and their stockholders for monetary damages for breaches of directors’ fiduciary duties as directors. Our articles of incorporation and bylaws include provisions that eliminate, to the extent allowable under Delaware law, the personal liability of directors or officers for monetary damages for actions taken as a director or officer, as the case may be. Our articles of incorporation and bylaws also provide that we must indemnify and advance reasonable expenses to our directors and officers to the fullest extent permitted by Delaware law. We are also expressly authorized to carry directors’ and officers’ insurance for our directors, officers, employees and agents for some liabilities. We currently maintain directors’ and officers’ insurance covering certain liabilities that may be incurred by directors and officers in the performance of their duties

The limitation of liability and indemnification provisions in our articles of incorporation and bylaws may discourage stockholders from bringing a lawsuit against directors for breach of their fiduciary duty. These provisions may also have the effect of reducing the likelihood of derivative litigation against directors and officers, even though such an action, if successful, might otherwise benefit us and our stockholders. In addition, your investment may be adversely affected to the extent that, in a class action or direct suit, we pay the costs of settlement and damage awards against directors and officers pursuant to the indemnification provisions in our articles of incorporation and bylaws.

There is currently no pending litigation or proceeding involving any of directors, officers or employees for which indemnification is sought.

Transfer Agent

The transfer agent for our common stock is American Stock Transfer & Trust Company.

 

34

SHARE ELIGIBLE FOR FUTURE SALE

Future sales of substantial amounts of our common stock in the public market after this offering could adversely affect market prices prevailing from time to time and could impair our ability to raise capital through the sale of our equity securities. We are unable to estimate the number of shares of common stock that may be sold in the future.

Upon the completion of this offering, we will have 97,009,073 outstanding shares of common stock if we complete the maximum offering hereunder. All of the shares sold in this offering will be freely tradable without restriction under the Securities Act unless purchased by one of our affiliates as that term is defined in Rule 144 under the Securities Act, which generally includes directors, officers or 5% stockholders.

Rule 144

Shares of our common stock held by any of our affiliates, as that term is defined in Rule 144 of the Securities Act, may be resold only pursuant to further registration under the Securities Act or in transactions that are exempt from registration under the Securities Act. In general, under Rule 144 as currently in effect, any of our affiliates would be entitled to sell, without further registration, within any three-month period a number of shares that does not exceed the greater of:

● 1% of the number of shares of common stock then outstanding, which will equal about 209,000 shares immediately after this offering, assuming minimum offering size; or

● the average weekly trading volume of the unrestricted common stock during the four calendar weeks preceding the filing of a Form 144 with respect to the sale.

Sales under Rule 144 by our affiliates will also be subject to manner of sale provisions and notice requirements and to the availability of current public information about us.

PLAN OF DISTRIBUTION

The Offering will be sold by our officers and directors.

This is a self-underwritten offering. This Offering Circular is part of a exemption under Regulation A that permits our officers and directors to sell the Shares directly to the public in those jurisdictions where the Offering Circular is approved, with no commission or other remuneration payable for any Shares sold. There are no plans or arrangements to enter into any contracts or agreements to sell the Shares with a broker or dealer. The Company has already entered in a Securities Purchase Agreement with Blackbridge Capital Fund, LLC, which gives Blackbridge Capital Fund, LLC the option to purchase up to $500,000 of the offering. The Securities Purchase Agreement is not exclusive, and after the qualification by the Commission and acceptance by those states where the offering will occur, the Officer and Directors intends to advertise through personal contacts, telephone, and hold investment meetings in those approved jurisdiction only. We do not intend to use any mass-advertising methods such as the Internet or print media. Officers and Directors will also distribute the prospectus to potential investors at meetings, to their business associates and to his friends and relatives who are interested the Company as a possible investment, so long as they offering is an accordance with the rules and regulations governing the offering of securities in the jurisdictions where the Offering Circular has been approved. In offering the securities on our behalf, the Officers and Directors will rely on the safe harbor from broker dealer registration set out in Rule 3a4-1 under the Securities Exchange Act of 1934.

Terms of the Offering

The Company is offering, on a best-efforts, self-underwritten basis, a maximum of $500,000.00 of common capital stock at fixed price of $____ per share. The shares are intended to be sold directly through the efforts of our officers and directors. The shares are being offered for a period not to exceed 180 days. The offering will terminate on the earlier of: (i) the date when the sale of all 33,333,333 shares is completed, or (ii) 180 days from the effective date of this document. For more information, see the section titled “Plan of Distribution” and “Use of Proceeds” herein.

VALIDITY OF COMMON STOCK

The validity of the securities offered hereby will be passed upon by Eilers Law Group, P.A.

EXPERTS

None

 

35

INDEX TO UNAUDITED FINANCIAL STATEMENTS

CONTENTS:
Balance Sheet as of December 31, 2015 and December 31, 2014 (unaudited)	F-2
Statement of Operations for the period ended December 31, 2015 and December 31, 2014 (unaudited)	F-3
Statements of Stockholder's Deficit for the period ended December 31, 2015 and December 31, 2014 (unaudited)	F-4
Statements of Cash Flows for the period end December 31, 2015 and December 31, 2014 (unaudited)	F-5
Notes to the Unaudited Financial Statements	F-6

 

F-1

SPO GLOBAL INC.
BALANCE SHEETS
	December 31, 2015			December 31, 2014
	(Unaudited)			(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	1,067		$	8,549
Accounts receivable, net		94,620			500
Prepaid expense and other current asset		25,000			5,530
Total Current Assets		120,687			14,579
OTHER ASSETS:
Website development cost, net		15,371			25,620
TOTAL ASSETS	$	136,058		$	40,199
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Accounts payable and accrued liabilities	$	170,421		$	70,473
Accounts payable and accrued liabilities - related party		204,298			17,817
Convertible notes payable, net of debt discount of $69,984 and $0, respectively		50,016			-
Loan payable		62,243			-
Derivative liabilities		453,520			-
Total Current Liabilities		940,498			88,290
LONG-TERM LIABILITY:
Advances from related party		204,586			212,859
TOTAL LIABILITIES		1,145,084			301,149
STOCKHOLDERS' DEFICIT:
Preferred stock ($0.01 par value; 5,000,000 shares authorized) Series C preferred stock - $0.01 par value; 1,500,000 shares authorized; 1,500,000 and none shares issued and outstanding at December 31, 2015 and 2014, respectively		15,000			-
Common stock, ($0.01 par value; 750,000,000 shares authorized; 63,675,740 and 44,601,962 shares issued and outstanding at December 31, 2015 and 2014, respectively		636,758			446,020
Additional paid-in capital		(807,740	)		(321,406	)
Accumulated deficit		(853,044	)		(385,564	)
TOTAL STOCKHOLDERS' DEFICIT		(1,009,026	)		(260,950	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	136,058		$	40,199

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

 

F-2

SPO GLOBAL INC.
STATEMENTS OF OPERATIONS
	For the Years Ended December 31,
	2015			2014
	(Unaudited)			(Unaudited)
NET REVENUES
Revenues from infringement protection and monitoring services	$	148,456		$	6,600
Revenues from infringement protection and monitoring services – related party		311,396			50,200
Total net revenues		459,852			56,800
COST AND OPERATING EXPENSES
Direct cost of revenues		185,293			13,410
Direct cost of revenues – related party		171,756			17,817
General and administrative		234,516			73,335
TOTAL COST AND OPERATING EXPENSES		591,565			104,562
LOSS FROM OPERATIONS		(131,713	)		(47,762	)
OTHER EXPENSE
Interest expense		(34,134	)		(7,721	)
Derivative expense		(59,757	)		-
Loss from change in fair value of derivative liabilities		(241,876	)		-
TOTAL OTHER EXPENSE, NET		(335,767	)		(7,721	)
Loss before provision for income taxes		(467,480	)		(55,483	)
Provision for income taxes		-			-
NET LOSS	$	(467,480	)	$	(55,483	)
NET LOSS PER COMMON SHARE
Basic and diluted	$	(0.01	)	$	(0.00	)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING:
Basic and diluted		46,117,413			44,601,962

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

 

F-3

SPO GLOBAL INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT
For the Years Ended December 31, 2015 and 2014
(Unaudited)
	Series C
	Preferred Stock				Common Stock				Additional						Total
	Number of Shares		Amount		Number of Shares		Amount		Paid-in Capital			Accumulated Deficit			Stockholders' Deficit
Balance at December 31, 2013		-	$	-		44,601,962	$	446,020	$	(321,406	)	$	(330,081	)	$	(205,467	)
Net loss for the year ended December 31, 2014		-		-		-		-		-			(55,483	)		(55,483	)
Balance at December 31, 2014		-		-		44,601,962		446,020		(321,406	)		(385,564	)		(260,950	)
Recapitalization of the Company		1,500,000		15,000		19,073,778		190,738		(486,334	)		-			(280,596	)
Net loss for the year ended December 31, 2015		-		-		-		-		-			(467,480	)		(467,480	)
Balance at December 31, 2015		1,500,000	$	15,000		63,675,740	$	636,758	$	(807,740	)	$	(853,044	)	$	(1,009,026	)

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

 

F-4

SPO GLOBAL INC.
STATEMENTS OF CASH FLOWS
	For the Years Ended December 31,
	2015			2014
	(Unaudited)			(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(467,480	)	$	(55,483	)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of website development costs		10,249			5,124
Amortization of prepaid expense		10,000			-
Amortization of debt discount		17,080			-
Bad debt expense		4,900			-
Derivative expense		59,757			-
Loss from change in fair value of derivative liabilities		241,876			-
Changes in operating assets and liabilities:
Accounts receivable		(99,100	)		(500	)
Prepaid expense and other current asset		5,530			(5,530	)
Accounts payable and accrued liabilities		21,418			33,505
Accounts payable and accrued liabilities - related party		186,481			17,817
Net cash used in operating activities		(9,209	)		(5,067	)
CASH FLOWS FROM INVESTING ACTIVITIES
Website development costs		-			(30,744	)
Net cash used in investing activities		-			(30,744	)
CASH FLOWS FROM FINANCING ACTIVITIES
Advances from related party		148,262			94,947
Repayments to related party for advances		(156,535	)		(50,587	)
Proceeds from issuance of convertible notes		10,000			-
Net cash provided by financing activities		1,727			44,360
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS		(7,482	)		8,549
CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR		8,549			-
CASH AND CASH EQUIVALENTS - END OF YEAR	$	1,067		$	8,549
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for:
Interest	$	10,342		$	7,721
Income taxes	$	-		$	-
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Assumption of convertible notes payable in connection with the recapitalization of the Company	$	110,000		$	-
Assumption of note payable in connection with the recapitalization of the Company	$	62,243		$	-
Assumption of derivative liabilities in connection with the recapitalization of the Company	$	141,887		$	-

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

 

F-5

SPO GLOBAL INC.

NOTES TO UNAUDITED FINANCIAL STATEMENTS

December 31, 2015

NOTE 1 – ORGANIZATION AND NATURE OF OPERATIONS

SPO Global, Inc. (the "Company") (formerly Image Technology Laboratories, Inc.) was incorporated on December 5, 1997 and commenced operations on January 1, 1998. On December 1, 2015, the Company acquired Clear Art, Inc. (“Clear Arts”), in a transaction treated as a reverse acquisition, and the business of Clear Arts became the business of the Company. The Company has developed a web application that monitors the global Internet to seek and collect evidence for illegally used visual content. The web application crawls the internet to identify illegal use and sends notices to identified infringers or their hosting company (ISP).

On December 1, 2015, Clear Arts, Inc. (doing business as SPO Global), a private California corporation which is the historical business, entered into an Agreement and Plan of Merger (the “Merger Agreement”) with the Company and all of the stockholders of Clear Arts (the “Clear Arts Shareholders”) whereby the Company agreed to acquire all of the issued and outstanding capital stock of Clear Arts in exchange for 44,601,962 shares of the Company’s common stock. On December 1, 2015, the transaction closed and Clear Arts merged with and into the Company and the separate corporate existence of Clear Art ceased and after the closing, the Company is the surviving entity pursuant to the Merger Agreement. The number of shares issued represented approximately 70.0% of the issued and outstanding common stock immediately after the consummation of the Merger Agreement. In addition, Mr. Jonathan Thomas who was the President and a stockholder of Clear Arts, was appointed to the Board of Directors and was engaged as President and COO of the Company. Mr. Jonathan Thomas received 37,733,000 shares out of the total 44,601,962 shares of the Company’s common stock per the terms of the Merger Agreement.

As a result of the controlling financial interest of the former stockholders of Clear Arts, for financial statement reporting purposes, the business combination between the Company and Clear Arts has been treated as a reverse acquisition with Clear Arts deemed the accounting acquirer and the Company deemed the accounting acquiree under the acquisition method of accounting in accordance with FASB Accounting Standards Codification (“ASC”) Section 805-10-55. The reverse acquisition is deemed a capital transaction and the net assets of Clear Arts (the accounting acquirer) are carried forward to the Company (the legal acquirer and the reporting entity) at their carrying value before the acquisition. The acquisition process utilizes the capital structure of the Company and the assets and liabilities of Clear Arts which are recorded at historical cost. The equity at closing is the historical equity of Clear Arts retroactively restated to reflect the number of shares issued by the Company in the transaction.

NOTE 2 – BASIS OF PRESENTATION, GOING CONCERN AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The accompanying financial statements are unaudited, but in the opinion of management of the Company, contain all adjustments, which include normal recurring adjustments, necessary to present fairly the financial position at December 31, 2015, and the results of operations and cash flows for the year ended December 31, 2015. Certain information and footnote disclosures normally included in unaudited financial statements that have been prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission, although management of the Company believes that the disclosures contained in these unaudited financial statements are adequate to make the information presented therein not misleading.

Going concern

These unaudited financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates, among other things, the realization of assets and the satisfaction of liabilities in the normal course of business.

As reflected in the accompanying unaudited financial statements, the Company had a net loss of $467,480 and $55,483 for the years ended December 31, 2015 and 2014, respectively, and net cash used in operations of $9,209 and $5,067 for the years ended December 31, 2015 and 2014, respectively, and an accumulated deficit, stockholders’ deficit and working capital deficit of $853,044, $1,009,026 and $819,811, respectively, at December 31, 2015. These matters raise substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent upon achieving profitable operations and/or obtaining additional financing. The unaudited financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. The Company plans on raising capital through the sale of equity or debt instruments to implement its business plan. There is no assurance these plans will be realized.

 

F-6

NOTE 2 – BASIS OF PRESENTATION, GOING CONCERN AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Use of estimates

The preparation of the unaudited financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Significant estimates during the years ended December 31, 2015 and 2014 include the useful lives of website development cost, beneficial conversion of convertible notes payable, the valuation of derivative liabilities and the valuation of stock-based compensation.

Fair value of financial instruments and fair value measurements

Fair value is 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. The Company classifies assets and liabilities recorded at fair value under the fair value hierarchy based upon the observability of inputs used in valuation techniques. Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed market assumptions. The fair value measurements are classified under the following hierarchy:

● Level 1—Observable inputs that reflect quoted market prices (unadjusted) for identical assets and liabilities in active markets;

● Level 2—Observable inputs, other than quoted market prices, that are either directly or indirectly observable in the marketplace for identical or similar assets and 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 and liabilities; and

● Level 3—Unobservable inputs that are supported by little or no market activity that is significant to the fair value of assets or liabilities.

The carrying amounts of the Company’s financial assets and liabilities, such as cash, accounts receivable, prepaid expenses and other current assets, accounts payable and accrued expenses approximate their fair values because of the short maturity of these instruments.

The Company’s convertible notes payable and loan payable approximate the fair value of such instruments based upon management’s best estimate of interest rates that would be available to the Company for similar financial arrangements at December 31, 2015 and 2014.

Transactions involving related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated.

ASC 825-10 “Financial Instruments”, allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable, unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings at each subsequent reporting date. The Company did not elect to apply the fair value option to any outstanding instruments.

Fair Value of Financial Assets and Liabilities Measured on a Recurring Basis

Level 3 Financial Liabilities - Derivative Liability on Conversion Feature

The Company uses Level 3 of the fair value hierarchy to measure the fair value of the derivative liabilities and revalues its derivative liability on the conversion feature at every reporting period and recognizes gains or losses in the statements of operations that are attributable to the change in the fair value of the derivative liabilities.

 

F-7

NOTE 2 – BASIS OF PRESENTATION, GOING CONCERN AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

The following table presents the derivative financial instruments, measured and recorded at fair value on the Company’s unaudited balance sheets on a recurring basis, and their level within the fair value hierarchy as of December 31, 2015:

	Amount		Level 1		Level 2		Level 3
Derivative liability - Embedded conversion	$	453,520	$	-	$	-	$	453,520

Cash and cash equivalents

Cash and cash equivalents consist of cash and short-term highly liquid investments purchased with original maturities of three months or less. There were no cash equivalents at December 31, 2015 and 2014.

Accounts receivable

Accounts receivable are presented net of an allowance for doubtful accounts. The Company maintains allowance for doubtful accounts for estimated losses. The Company reviews the accounts receivable on a periodic basis and makes general and specific allowance when there is doubt as to the collectability of individual balances. In evaluating the collectability of individual receivable balance, the Company considers many factors, including the age of the balance, a customer’s historical payment history, its current credit-worthiness and current economic trends. Accounts are written off after exhaustive efforts at collection. At December 31, 2015 and 2014, the Company recorded an allowance for doubtful accounts of $4,980 and $0, respectively.

Property, plant and equipment

Property and equipment are carried at cost. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition. The Company examines the possibility of decreases in the value of fixed assets when events or changes in circumstances reflect the fact that their recorded value may not be recoverable. Depreciation is calculated on a straight-line basis over the estimated useful life of the assets.

Revenue recognition

The Company follows ASC 605-10 “Revenue Recognition” and recognizes revenue when all the conditions for revenue recognition are met: (i) persuasive evidence of an arrangement exists, (ii) collection of the fee is probable, (iii) the sales price is fixed and determinable and (iv) services have been rendered.

Revenue is derived from subscription fees and the recovery of photo infringement settlement fees. The Company collects settlement fees for commercial and editorial uses from operating companies. The Company provides infringement protection and monitoring services to copyright owners under which copyright owners retain the Company to identify and collect settlement payments from Internet users who have infringed on their copyrights. Revenue is recognized when the Company collects a settlement fee or upon entering into a settlement agreement which acts as a waiver to the infringement against the copyright owner. The Company reports its revenue at gross amounts in accordance with ASC 605-45 “Principal Agent Considerations” because it is responsible for fulfillment of the service, has substantial latitude in setting price, assumes the credit risk and it is responsible for the payment of all obligations incurred for legal and debt collection fees.

Cost of Revenue

Cost of revenues mainly includes payments to copyright holders of a percentage of the revenue the Company collects in accordance with our agreements with the copyright owner. Cost of revenues also include expenses incurred in connection with the Company’s copyrights enforcement activities, such as legal and debt collection fees.

Advertising

Advertising is expensed as incurred and is included in general and administrative expense. The Company incurred advertising expense for the years ended December 31, 2015 and 2014 amounting $428 and $726, respectively.

 

F-8

NOTE 2 – BASIS OF PRESENTATION, GOING CONCERN AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Research and development

Expenditures for research and product development costs are expensed as incurred. The Company did not incur any research and development during the years ended December 31, 2015 and 2014.

Stock-based compensation

Stock-based compensation is accounted for based on the requirements of the Share-Based Payment Topic of ASC 718 which requires recognition in the financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). The ASC also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award.

Pursuant to ASC Topic 505-50, for share-based payments to consultants and other third-parties, compensation expense is determined at the “measurement date.” The expense is recognized over the service period of the award. Until the measurement date is reached, the total amount of compensation expense remains uncertain. The Company initially records compensation expense based on the fair value of the award at the reporting date.

Derivative Liabilities

The Company follows the provisions of ASC Topic No. 815-40, “Derivatives and Hedging - Contracts in an Entity’s Own Stock”, for the embedded conversion options that were accounted for as derivative liabilities at the date of issuance and adjusted to fair value through earnings at each reporting date. In accordance with ASC 815, the Company has bifurcated the conversion feature of the convertible notes, along with any free-standing derivative instruments and recorded derivative liabilities on their issuance date. The Company uses the Black-Scholes model to value the derivative liabilities.

Income taxes

The Company accounts for income taxes pursuant to the provision of ASC 740-10, “Accounting for Income Taxes” which requires, among other things, an asset and liability approach to calculating deferred income taxes. The asset and liability approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred asset will not be realized.

The Company follows the provision of the ASC 740-10 related to Accounting for Uncertain Income Tax Position. When tax returns are filed, it is highly certain that some positions taken would be situated upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is most likely that not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for uncertain tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination.

The Company believes its tax positions are all highly certain of being upheld upon examination. As such, the Company has not recorded a liability for uncertain tax benefits.

The Company has adopted ASC 740-10-25 Definition of Settlement, which provides guidance on how an entity should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits and provides that a tax position can be effectively settled upon the completion and examination by a taxing authority without being legally extinguished. For tax position considered effectively settled, an entity would recognize the full amount of tax benefit, even if the tax position is not considered more likely that not to be sustained based solely on the basis of its technical merits and the statute of limitations remains open. The federal and state income tax returns of the Company are subject to examination by the IRS and state taxing authorities, generally for three years after they were filed.

 

F-9

NOTE 2 – BASIS OF PRESENTATION, GOING CONCERN AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Software development costs

The Company recognizes the costs associated with developing a website in accordance with ASC Topic 350–50 “Website Costs”. Costs incurred to develop internal-use software, including website development costs, during the preliminary project stage are expensed as incurred. Internal-use software development costs are capitalized during the application development stage, which is after: (i) the preliminary project stage is completed; and (ii) management authorizes and commits to funding the project and it is probable the project will be completed and used to perform the function intended. Capitalization ceases at the point the software project is substantially complete and ready for its intended use, and after all substantial testing is completed. Upgrades and enhancements are capitalized if it is probable that those expenditures will result in additional functionality. Amortization is provided for on a straight-line basis over the expected useful life of three years of the internal-use software development costs and related upgrades and enhancements. When existing software is replaced with new software, the unamortized costs of the old software are expensed when the new software is ready for its intended use. During the year 2015 and 2014 periods, the Company capitalized software development costs of $0 and $30,744, respectively. The Company place its website into service in June 2014 and consequently, the Company incurred software developments cost which consisted of consulting fees of software programmers in the amount of approximately $80,500 and $9,000 during the years ended December 31, 2015 and 2014, respectively and were included in general and administrative expenses as reflected in the unaudited statements of operations. Amortization of website development cost amounted $10,249 and $5,124 during the year ended December 31, 2015 and 2014, respectively.

Basic and diluted earnings per share

Net loss per common share is calculated in accordance with ASC Topic 260, “Earnings Per Share”. Basic loss per share is computed by dividing net loss available to common stockholder, adjusted for preferred dividends, by the weighted average number of shares of Common Stock outstanding during the period. The computation of diluted net loss per share does not include anti-dilutive common stock equivalents in the weighted average shares outstanding. The Company's aggregate common stock equivalents at December 31, 2015 and 2014 included the following:

	December 31, 2015		December 31, 2014
Convertible notes payable		36,095,238		-
Total		36,095,238		-

Related parties

Parties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners and stockholders of the Company, its management, members of the immediate families of principal owners and stockholders of the Company and its management and other parties with which the Company may deal with if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. The Company discloses all related party transactions. All transactions are recorded at fair value of the goods or services exchanged.

Recent accounting pronouncements

Accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the unaudited financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures.

 

F-10

NOTE 3 – ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

At December 31, 2015 and 2014, accounts payable and accrued liabilities consisted of the following:

	December 31, 2015		December 31, 2014
Trade accounts payable	$	11,418	$	-
Trade accounts payable - related party		189,573		17,817
Credit cards		79,742		70,473
Accrued professional and consulting fees		70,119		-
Accrued consulting fees – related party		9,000		-
Accrued interest		9,142		-
Accrued interest – related party		5,725		-
	$	374,719	$	88,290

NOTE 4 – LOAN PAYABLE

On December 3, 2015, following the closing of the Merger Agreement (see Note1), the Company assumed a working capital loan agreement with a financial institution for borrowings of up to $75,000. The agreement automatically renews annually unless one of the parties gives appropriate notice for cancellation. Outstanding borrowings bear interest monthly at 1% above the prime rate, and are guaranteed by the Estate of the Company’s former principal stockholder. The principal amount outstanding under this agreement was $62,243 and $0 at December 31, 2015 and 2014, respectively. Accrued interest as of December 31, 2015 and 2014, amounted to $8,312 and $0, respectively.

NOTE 5 – CONVERTIBLE NOTES PAYABLE

At December 31, 2015 and 2014, convertible notes payable consisted of the following:

	December 31, 2015			December 31, 2014
Principal amount	$	120,000		$	-
Less: unamortized debt discount		(69,984	)		-
Convertible notes payable, net	$	50,016		$	-

On December 3, 2015, following the closing of the Merger Agreement (see Note 1), the Company assumed convertible notes payable for a total of $110,000. On December 3, 2015, the debt discount on the convertible notes has a remaining balance of $77,064. These convertible notes payable consisted of the following:

· 5% Convertible Promissory Note in the principal amount for borrowings of up to $50,000. The 5% convertible promissory note and all accrued interest are due on April 15, 2016. The principal on this note shall bear interest at the rate of five percent (5%) per annum from the issuance date thereof until the note is paid. The note holder is entitled, at its option, at any time after the issuance of this note, to convert all or any lesser portion of the outstanding principal amount and accrued but unpaid interest into the Company’s common stock at a conversion price for each share of common stock equal to a price which is 50% of the lowest trading price during forty (40) trading days, commencing on the first trading day following delivery and clearing of the conversion notice. In the event the price of the Company’s common stock falls below $0.01 at any time after the issuance date, the conversion price for all conversions shall be automatically adjusted to the lesser of (i) $0.0001, or (ii) 50% of the lowest trading price during the valuation period. The Company assumed $10,000 of this convertible note on the date of merger. On December 15, 2015, the Company received additional proceeds in connection with this note of $10,000. The outstanding principal for this convertible note was $20,000 which represents the total proceeds received at December 31, 2015.

F-11

NOTE 5 – CONVERTIBLE NOTES PAYABLE (continued)

· 2% Convertible Promissory Note in the principal amount of $50,000 in connection with a Consulting Agreement dated October 16, 2015 (see Note 7). The 2% convertible promissory note and all accrued interest were due on May 16, 2016. The principal on this note shall bear interest at the rate of two percent (2%) per annum from the issuance date thereof until the note is paid. The note holder is entitled, at its option, at any time after the issuance of this note, to convert all or any lesser portion of the outstanding principal amount and accrued but unpaid interest into the Company’s common stock at a conversion price for each share of common stock equal to a price which is 87.5% of the lowest trading price during the forty (40) trading days, commencing on the first trading day following delivery and clearing of the conversion notice. Accordingly, the 2% convertible note was not considered to be conventional debt and the embedded conversion feature was required to be bifurcated from the debt host and accounted for as a derivative liability. The outstanding principal for this convertible loan was $50,000 at December 31, 2015.

· 5% Convertible Promissory Note in the principal amount of $50,000 in connection with a Securities Purchase Agreement dated October 16, 2015 (see Note 7). The 5% convertible promissory note and all accrued interest were due on April 16, 2016. The principal on this note shall bear interest at the rate of five percent (5%) per annum from the issuance date thereof until the note is paid. The note holder is entitled, at its option, at any time after the issuance of this note, to convert all or any lesser portion of the outstanding principal amount and accrued but unpaid interest into the Company’s common stock at a conversion price for each share of common stock equal to a price which is 60% of the lowest trading price during the twenty (20) trading days, commencing on the first trading day following delivery and clearing of the conversion notice. The Company determined that the conversion feature of the 5% convertible promissory note represents an embedded derivative since the note is convertible into a variable number of shares. The outstanding principal for this convertible loan was $50,000 at December 31, 2015.

The Company evaluated whether or not the convertible promissory notes contain embedded conversion features, which meet the definition of derivatives under ASC 815 and related interpretations. The Company determined that the terms of the notes discussed above include variable conversion prices based on the closing trading prices of the Company’s common stock which cause the embedded conversion options to be accounted for as derivative liabilities. In accordance with ASC 815, the Company has bifurcated the conversion feature of the convertible notes and recorded derivative liabilities on their issuance date and adjusted to fair value through earnings at each reporting date. The Company uses the Black-Scholes option pricing model to value the derivative liabilities.

On December 3, 2015, the debt discount on the assumed convertible notes has a remaining balance of $77,064 and the note issued on December 31, 2015 were discounted in the amount of $10,000 based on the valuations and the Company recognized an initial derivative expense of $59,757 upon initial recording of the derivative liabilities. The total debt discount of $87,064 from the valuation of the derivatives are being amortized over the terms of the note. These derivative liabilities are then revalued on each reporting date. The loss resulting from the increase in fair value of these convertible instruments was $241,876 for the year ended December 31, 2015. At December 31, 2015, the Company had recorded derivative liability of $453,520.

During the year ended December 31, 2015, the fair value of the derivative liabilities were estimated using the Black-Scholes pricing model with the following assumptions:

Dividend rate	0
Term (in years)	0.29 to 0.46 years
Volatility	280% to 287	%
Risk-free interest rate	0.049	%

For the year ended December 31, 2015, amortization of debt discounts related to these convertible notes amounted to $17,080, which has been included in interest expense on the accompanying statements of operations. Accrued interest related to these convertible notes amounted to $830 and $0 at December 31, 2015 and 2014, respectively.

 

F-12

NOTE 6 – STOCKHOLDERS’ DEFICIT

Preferred stock

The Company is authorized to issue 5,000,000 shares of its $0.01 par value preferred stock, of which, 1,500 shares are designated as Series B Convertible Preferred Stock, and 1,500,000 shares are designated as Series C Preferred Stock. At December 31, 2015 and 2014, 1,500,000 and none shares of Series C Preferred Stock were issued and outstanding, respectively.

Each shares of the Series C Preferred Stock entitles the holder to 1 vote on all matters submitted to a vote of the Company’s stockholders.

The holders of the Series C Preferred Stock do not have any conversion rights and redemption provision.

Common stock

The Company is authorized to issue 750,000,000 shares of its $0.01 par value common stock. As of December 31, 2015 and 2014, 63,675,740 and 44,601,962 shares of common stock were issued and outstanding, respectively.

Immediately prior to the consummation of the Merger Agreement on December 1, 2015, the Company had 19,073,778 common shares issued and outstanding.

Upon consummation of the Merger Agreement on December 1, 2015, the Company issued 44,601,962 shares of its common stock for the acquisition of 100% of the issued and outstanding capital stock of Clear Arts (see Note 1).

Options

As of December 31, 2015 and 2014, the Company had no options issued and outstanding since the Company did not grant any options under the Company’s option plan.

Warrants

As of December 31, 2015 and 2014, the Company had no warrants issued and outstanding.

NOTE 7 – CONCENTRATIONS AND COMMITMENTS

Concentrations

Concentration of credit risk

The Company maintains its cash in bank and financial institution deposits that at times may exceed federally insured limits. The Company has not experienced any losses in such accounts through December 31, 2015. There were no balances in excess of FDIC insured levels as of December 31, 2015.

Customers

During the year ended December 31, 2015 revenues generated from the services rendered to one copyright owner who is a related party represented approximately 68% of the Company’s net revenues. During the year ended December 31, 2014 revenues generated from the services rendered to one copyright owner who is a related party represented approximately 88% of the Company’s net revenues (see Note 8).

As of December 31, 2015 and 2014, the Company had accounts receivable from copyright infringers related to service agreements with three copyright owners representing approximately 100% of accounts receivable and one copyright owner representing approximately 100% of accounts receivable, respectively.

 

F-13

NOTE 7 – CONCENTRATIONS AND COMMITMENTS (continued)

Commitments

Consulting agreements

In September 2015, the Company entered into a consulting agreement with Seaside Advisors LLC, an affiliated company managed by the CEO of the Company. Pursuant to the consulting agreement, the consultant shall provide strategic planning, business development, and consulting services relating to potential acquisition and mergers. The Company pays fees of $5,000 per month as compensation for the services per the terms of agreement. Additionally, the Company pays reimbursement for out of pocket expenses subject to the Company’s approval. The term of the agreement is for 12 months unless otherwise extended by both parties. Accrued consulting fee to such related party consultant as of December 31, 2015 and 2014, was approximately $9,000 and $0, respectively, and were reflected as accounts payable and accrued liabilities – related party in the accompanying unaudited balance sheets.

On October 16, 2015, the Company entered into consulting agreement with a third party consultant to serve as a business advisor to the Company. The consultant shall provide services such as introduction of potential acquisition target, assistance in acquisition and merger process and other business advisory related services. In consideration for such services, the Company paid $50,000 fee through the issuance of a 2% convertible promissory note (see Note 5). The term of the agreement is for 5 months unless otherwise extended by both parties.

Securities purchase agreements

On October 16, 2015, the Company entered into a Securities Purchase Agreement with a third party investor for the purchase of $1,000,000 worth of shares of common stock. Upon execution of this agreement, the Company shall pay to the investor a commitment fee of $50,000 through the issuance of a 5% convertible promissory note (see Note 5) and $50,000 worth of restricted shares of common stock (the “Commitment Shares”) which is calculated by dividing $50,000 by 90% of the lowest trading price of the common stock during the 10 days prior to the execution of this agreement. As of December 31, 2015, the Company has not issued the Commitment Shares and consequently, the Company recorded $55,556 which represents the value of the Commitment Shares in accrued expenses at December 31, 2015. Such investor is also a party in a consulting agreement dated on October 16, 2015 as discussed above.

NOTE 8 – RELATED PARTY TRANSACTIONS

Advances from related party

During year 2014, the Company’s President and COO, Mr. Jonathan Thomas, provided advances to the Company for working capital purposes for a total of $94,947 and the Company repaid $50,587. During year 2015, the Company’s President and COO provided advances to the Company for working capital purposes for a total of $148,262 and the Company repaid $156,535. In September 2015, the Company issued an 8% unsecured promissory note to Mr. Thomas for the unpaid balance of the advances which shall be due on September 1, 2017. The note shall bear interest at the rate of eight percent (8%) per annum. At December 31, 2015 and 2014, these advances from related party amounted to $204,586 and $212,859, respectively. Accrued interest due to the Company’s COO totaling $5,725 and $0, at December 31, 2015 and 2014 respectively, were reflected as accounts payable and accrued liabilities – related party in the accompanying unaudited balance sheets.

Consulting agreements

In September 2015, the Company entered into a consulting agreement with Seaside Advisors LLC, an affiliated company managed by the CEO of the Company. Pursuant to the consulting agreement, the consultant shall provide strategic planning, business development, and consulting services relating to potential acquisition and mergers (see Note 7). Accrued consulting fee to such related party consultant as of December 31, 2015 and 2014, was approximately $9,000 and $0, respectively, and were reflected as accounts payable and accrued liabilities – related party in the accompanying unaudited balance sheets.

 

F-14

NOTE 8 – RELATED PARTY TRANSACTIONS (continued)

Transaction with an affiliated company

From time to time the Company enters into transactions with Lived In Images, Inc. (“Lived In Images”), an affiliated company owned by the President and COO of the Company, including:

● Revenues generated from the services rendered to Lived In Images approximately $311,396 and $50,200 during the years ended December 31, 2015 and 2014, respectively. As of December 31, 2015 and 2014, the Company had accounts receivable from copyright infringers related to a service agreement with Lived In Images representing accounts receivable of $75,100 and $0, respectively.

· The Company incurred copyright holder fees to Lived In Images totaling approximately $171,800 and $17,800 during the years ended December 31, 2015 and 2014, respectively. Accounts payable to Lived In Images as of December 31, 2015 and 2014, was approximately $189,600 and $17,800, respectively, and were reflected as accounts payable and accrued liabilities – related party in the accompanying unaudited balance sheets.

NOTE 9 – SUBSEQUENT EVENTS

In March 2016, the Company issued a 10% convertible promissory note payable of $30,000, due in March 2017, with an unrelated entity. Under the terms of the note, the Company received $25,000 and was charged an original issue discount of $5,000. This note may not be prepaid in whole or in part. Any amount of principal or interest on this note, which is not paid when due, shall bear interest at the rate of fifteen percent (15%) per annum from the due date thereof until the same is paid. At the option of the note holder, the Company may repay the note by issuing the Company’s common stock based upon the conversion term equal to 30% of the lowest trading price during the 20 days prior to the date of the conversion notice. The note holder may exchange the notes as subscription payment toward purchase of shares offered for resale or other type of offering as defined in the convertible note agreement. In the event that note holder elects to exchange the note for purchase of shares from the qualified offering, said shares shall be issued free of restrictive legend and will be deemed qualified shares. At the time of conversion, the Company will grant two registered shares for every dollar invested. The Company’s exchanged shares shall be automatically registered in the offering.

 

F-15

SPO GLOBAL, INC.

CONSOLIDATED BALANCE SHEETS

(unaudited)

	September 30, 2016			December 31, 2015
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	21,568		$	141,637
Accounts receivable		34,859			14,101
Prepaid expenses and other accounts receivable		6,015			14,864
Total current assets		62,442			170,602
Total assets	$	62,442		$	170,602
LIABILITIES AND STOCKHOLDERS’ DEFICIENCY
Current Liabilities
Convertible notes payable	$	1,421,340		$	1,558,949
Derivative liability		498,770			-
Accounts payable		194,342			247,075
Loans payable		65,549			5,000
Accrued expenses and other liabilities		56,367			44,466
Total current liabilities		2,236,368			1,855,490
Long-Term Liabilities
Convertible note payable		-			63,474
Derivative liability		-			108,283
Notes payable		275,856			313,952
Total liabilities		2,512,224			2,341,199
COMMITMENTS AND CONTINGENT LIABILITIES
STOCKHOLDERS’ DEFICIENCY
Preferred stock $0.01 par value Authorized - 2,000,000 shares, issued and outstanding - 100 Series A shares, 17,500 and 0 Series B shares, respectively		175			1
Common stock $0.01 par value Authorized - 298,000,000 shares, issued and outstanding - 730,938,309 and 56,001,116 shares, respectively		7,309,383			560,011
Additional paid-in capital		29,660			507
Accumulated other comprehensive income		96,580			8,760
Accumulated deficit		(9,813,742	)		(2,675,871	)
Total stockholders’ deficiency		(2,377,944	)		(2,106,592	)
Non-controlling interest		(71,838	)		(64,005	)
Total deficiency		(2,449,782	)		(2,170,597	)
Total liabilities and stockholders’ deficiency	$	62,442		$	170,602

These financial statements have not been subjected to an audit or review or compilation engagement, and no assurance is provided on them.

F-16

SPO GLOBAL, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(unaudited)

	Three months ended September 30,			Three months ended September 30,			Nine months ended September 30,
	2016			2015			2016			2015
Revenues	$	14,166		$	23,440		$	95,685		$	266,911
Cost of revenues		-			-			-			-
Gross profit		14,166			23,440			95,685			266,911
Operating expenses
Research and development		11,099			49,935			87,406			148,559
Selling and marketing		4,241			20,555			10,439			28,436
General and administrative		74,292			113,184			198,645			305,466
Total operating expenses		89,632			183,674			296,490			482,461
Operating loss		(75,466	)		(160,234	)		(200,805	)		(215,550	)
Other income		-			9			-			1,563
Financial expenses		(5,089,188	)		(3,807	)		(6,947,057	)		(24,945	)
Net loss	$	(5,164,654	)	$	(164,032	)	$	(7,147,862	)	$	(238,932	)
Net loss attributable to non-controlling interests		(4,184	)		(2,110	)		(7,964	)		(14,479	)
Net loss attributable to common stockholders		(5,160,470	)		(161,922	)		(7,139,898	)		(224,453	)
Basic and diluted loss per share	$	(0.01	)	$	(0.00	)	$	(0.03	)	$	(0.00	)
Weighted average number of shares outstanding used in computation of basic loss per share		538,577,214			47,651,748			247,624,284			47,569,715
Other comprehensive income (loss):
Foreign currency translation differences	$	104,009		$	-		$	87,820		$	-
Total comprehensive loss	$	(5,060,645	)	$	(164,032	)	$	(7,060,042	)	$	(238,932	)

 

F-17

SPO GLOBAL INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

	Nine Months ended September 30,
	2016
Cash Flows from Operating Activities
Net Loss for the period	$	(7,147,862	)
Adjustments to reconcile loss to net cash provided by (used in) operating activities:
Non-cash expense related to shares issued for services		22,260
Non-cash expenses related to derivative liability		390,487
Non-cash expense related to shares issued for financing		6,556,339
Changes in assets and liabilities:
Accounts receivable		(20,758	)
Prepaid expenses and other receivables		8,849
Accounts payable		(52,733	)
Accrued expenses and other liabilities		48,594
Net cash used by operating activities		(194,824	)
Cash Flows from Financing Activities
Proceeds from sale of preferred B shares		17,500
Proceeds from loans		93,575
Repayment of loan		(105,060	)
Net cash provided by financing activities		6,015
Decrease in cash and cash equivalents		(188,809	)
Effect of exchange rate changes		68,740
Cash and cash equivalents at the beginning of the period		141,637
Cash and cash equivalents at the end of the period	$	21,568
Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for: Interest	$	3,781
Taxes	$	-

 

F-18

SPO GLOBAL INC.

NOTES TO THE FINANCIAL STATEMENTS

NOTE 1 GENERAL

S.P.O. (SOFTWARE PERFORMANCE OPTIMIZATION) GLOBAL INC, and subsidiaries is a company that is focused on acquiring performance optimization software IP for all enterprise applications. The focus of SPO is to acquire unique software companies that own outright valuable IP with a proven verifiable customer base.

The Company is incorporated under the laws of the State of Delaware.

On the 23rd of December, 2015 SPO GLOBAL, INC. (OTC:SPOM) executed a Stock Exchange Agreement (Merger) for the purchase of a 93.94% interest in the UK company, Reflective Solutions Ltd. (“Reflective”), a performance software testing company . Under the SEA, the selling shareholders of Reflective received 1433 shares of SPO restricted common stock for every 1 share held, for a total issuance by SPO of 46,980,905 restrictive common shares.

The Merger is accounted for as a reverse-merger and recapitalization. Reflective is the acquirer for financial reporting purposes and SPO is the acquired company. Consequently, the assets and liabilities and the operations that are reflected in the historical financial statements prior to the Merger are those of Reflective and are recorded at the historical cost basis of Reflective, and the consolidated financial statements after completion of the Merger include the assets, liabilities and operations of SPO and Reflective, from the closing date of the Merger. Therefore, the historical equity accounts of Reflective including par value per share, share and per share numbers included in the 2014 financial statements, have been adjusted to reflect the number of shares received in the Merger.

On the 31st December 2015, SPO Global entered into a Purchase Agreement with Elepho, Inc., a DE company, owned by Michael Braunhold, the Company’s former CEO and President, to sell its remaining interests in SPO Medical Equipment, LTD. The Company had previously entered into a Settlement Agreement with Mr. Braunhold, wherein the Company granted him a perpetual, exclusive, license to the IP and SPO technology held by SPO Medical Ltd, in exchange for, among other things, his release of all sums owed to him by the Company.

NOTE 2 GOING CONCERN

As reflected in the accompanying financial statements, the Company’s operations for the period ended September 30, 2016, resulted in a net loss of $7,147,862 and the Company’s balance sheet reflects a net stockholders’ deficit of $2,377,944. The Company’s ability to continue operating as a “going concern” is dependent on its ability to increase revenues and raise sufficient additional working capital. These matters raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements have been prepared on a going concern basis, which contemplates realization of assets and liquidation of liabilities in the ordinary course of business. The Company plans to raise additional capital as needed. There can be no assurance that this capital will be available and if it is not, the Company may be forced to substantially curtail or cease operations. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

NOTE 3 SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation:

The consolidated financial statements include the accounts of SPO and its subsidiaries.

SPO Global Inc. owns 93.94% of Reflective Solutions Ltd. (a U.K. corporation). Reflective Solutions Ltd. owns 100% of Reflective Solutions Inc. (a U.S. corporation) and 100% of Reflective Solutions Bulgaria Ltd. (a Bulgarian corporation)

All material inter-company accounts and transactions have been eliminated in consolidation.

 

F-19

Use of Estimates:

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Financial Statements in U.S. dollars:

The reporting currency of the Company is the U.S. dollar ("dollar"). The dollar is the functional currency of the Company and the Company’s U.S. subsidiary.

The primary economic environment in which the operations of the Company’s British subsidiary are conducted is the GBP and thus its functional currency.

The primary economic environment in which the operations of the Company’s Bulgarian subsidiary are conducted is the BGN and thus its functional currency.

The financial statements of the non-U.S. subsidiaries are translated to U.S. dollars using the mothods mandated by ASC 830.

Cash and Cash Equivalents:

The Company considers all highly liquid investments originally purchased with maturities of three months or less to be cash equivalents.

Revenue Recognition:

The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred or services are rendered, the sales price or fee is fixed or determinable, and collectability is reasonably assured.

Research and Development Costs:

Research and development costs are charged to expenses as incurred. The Company’s research and development is performed by the Company’s subsidiary, Reflective Solutions Bulgaria Ltd.

Income Taxes:

The Company accounts for income taxes in accordance with ASC 740-10, "Accounting for Income Taxes" This statement prescribes the use of the liability method whereby deferred tax assets and liability account balances are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value.

Fair Value of Financial Instruments:

ASC 820, "Fair Value Measurements and Disclosures", defines fair value as the price that would be received to sell an asset or paid to transfer a liability (i.e., the "exit price") in an orderly transaction between market participants at the measurement date.

In determining fair value, the Company uses various valuation approaches. ASC 820 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company.

Unobservable inputs are inputs that reflect the Company's assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.

 

F-20

The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

As a basis for considering such assumptions, ASC 820 establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:

Level 1 - Valuations based on quoted prices in active markets for identical assets that the Company has the ability to access. Valuation adjustments and block discounts are not applied to Level 1 instruments. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment.

Level 2 - Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

Level 3 - Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

The fair value of the derivative liabilities are valued based on level 2 of the hierarchy.

The carrying amounts of cash and cash equivalents, short-term loans, and accounts payable approximate their fair value due to the short-term maturities of such instruments.

The carrying amounts of long-term notes payable received in cash are reported at their original amounts.

Basic and Diluted Net Loss Per Share:

Basic and diluted net loss per share is presented in accordance with ASC 260-10, "Earnings Per Share" for all periods presented. Basic and diluted net loss per share of Common Stock was determined by dividing net loss attributable to Common stock holders by weighted average number of shares of Common Stock outstanding during the period. Diluted net loss per share of Common Stock is the same as basic net loss per share of Common Stock for all periods presented as the effect of the Company's potential additional shares of Common Stock were anti-dilutive.

NOTE 4 LOANS AND WARRANTS

In December 2005, the Company completed the private placement to certain accredited investors that commenced in April 2005 for the issuance of up to $1,544,000 of units of its securities, with each unit comprised of (i) the Company’s 18 month 8% promissory note (collectively, the "April 2005 Notes") and (ii) three year warrants (expired). As of September 30, 2016, the remaining outstanding April 2005 Notes principal totaled $356,850. The Company reached an agreement with the investors to cancel the accrued interest. The remaining balance is past due. In 2016 the investors sold the notes to a non- affiliated third party.

In July 2006, the Company commenced a private placement of units of its securities, the (“Loan Notes”), with each unit comprised of (i) the Company’s 8% month promissory note due 12 months from the date of issuance and (ii) warrants, pursuant to which the Company raised $550,000 (the maximum amount that could be raised from this offering). As of September 30, 2016, $86,510 in respect of the principal on these notes remains outstanding and past due. The Company reached an agreement with the investors to cancel the accrued interest. In 2016 the investors sold the notes to a non-affiliated third party.

On March 25, 2011, the Company and one of its stockholders entered into a loan agreement pursuant to which a stockholder loaned to the Company $50,000 for working capital purposes. The Company reached an agreement with the investor to cancel the accrued interest. In 2016 the investor sold the note to a non-affiliated third party. As of September 30, 2016, $17,000 in respect of the principal on these notes remains outstanding and past due.

From August 2011 to August 2012 , the Company received $425,000 from investors on account for loans. The loans bear interest at the rates of 15% to 23% per annum. Principal and accrued interest is convertible into shares of the Company’s common stock at the option of the holder at the conversion price of $0.50 per share. The loans are past due. The Company reached an agreement with the investors to cancel the accrued interest. In 2016 the investors sold the notes to a non-affiliated third party.

 

F-21

On August 27, 2012, the Company entered into a Loan Agreement with an investor pursuant to which the Company was to be advanced $21,000. The loan is due on demand and is non-interest bearing. In 2016 the investor sold the note to a non-affiliated third party.

On December 27, 2013, the Company entered into agreements with an accredited investor and a current shareholder of the Company, relating to a private placement of $250,000 in principal amount of the Company’s Convertible Promissory Note due December 28, 2015. The note was issued pursuant to a Subscription Agreement dated as of December 27, 2013 between the Company and the Investor.

Interest on the Note accrues at the rate of 10% per annum and is payable in cash in arrears upon the earlier of (i) each six months from the date of the note (ii) or the date of conversion or (iii) at maturity, whichever occurs first, and will continue to accrue until the Note is fully converted and/or paid in full. The note is convertible into shares of the Company’s common stock at the Investor’s option at a conversion rate equal to the average of the closing price of the Common Stock for the ten consecutive trading days immediately preceding the date a notice of conversion is delivered. The Investor may not exercise the conversion right if the shares issuable upon conversion, together with shares held by the Investor, exceed 9.99% of the then outstanding shares of the Company after such conversion and/or exercise. Under the terms of the Subscription Agreement, at any time that the note (or any portion thereof) is converted, the Investor is to receive warrants, exercisable for two years following the date of issuance for Common Stock equal to 50% of the number of shares of Common Stock issued upon conversion of the Note (or any part thereof) at a per share warrant exercise price equal to twice the conversion price. The Company reached an agreement with the investor to cancel the accrued interest. In 2016 the investor sold the note to a non-affiliated third party. As of September 30, 2016, $175,640 in respect of the principal on these notes remains outstanding and past due.

On May 23, 2014, the Company entered into a loan agreement with an investor pursuant to which the Company received a loan in the principal amount of $175,000 to be used for order financing. The principle amount of the loan with a $10,000 fee is repayable by September 30, 2014 and such loan may be pre-paid, at the option of the Company, without notice or penalty. If the loan is not repaid by the scheduled maturity date, the principle amount of the loan shall begin to accrue interest at a rate of 12% per annum from the maturity date until repayment in full. The Company reached an agreement with the investor to cancel the accrued interest. As of September 30, 2016 the remaining principal balance was $29,000. In 2016 the investor sold the note to a non-affiliated third party.

On July 1, 2014, the Company entered into a loan agreement with an investor pursuant to which the Company received a loan in the principal amount of $50,000 to be used for order financing. The principle amount of the loan with a $4,000 fee was repayable by November 30, 2014. If the loan is not repaid by the scheduled maturity date, the principle amount of the loan shall begin to accrue interest at a rate of 12% per annum from the maturity date until repayment in full. The Company reached an agreement with the investor to cancel the accrued interest. In 2016 the investor sold the note to a non- affiliated third party.

On August 1, 2014, the Company entered into a loan agreement with an investor pursuant to which the Company received a loan in the principal amount of $200,000 to be used for order financing. The principle amount of the loan with a $16,000 fee was repayable by November 30, 2014. If the loan is not repaid by the scheduled maturity date, the principle amount of the loan shall begin to accrue interest at a rate of 12% per annum from the maturity date until repayment in full. The Company reached an agreement with the investor to cancel the accrued interest. As of September 30, 2016 the remaining principal balance was $110,000. In 2016 the investor sold the note to a non-affiliated third party.

On May 16, 2016, the Company entered into a convertible loan agreement with an investor pursuant to which the Company received a loan in the principal amount of $25,000. The loan matures one year from the date of the loan and bears interest at a per annum rate of 10%. The principal and accrued interest is convertible into common stock of the Company at a conversion rate of 25% of the prevailing per share market price. As of September 30, 2016 the principal balance and accrued interest payable was $25,938. As of September 30, 2016 a derivative liability in the amount of $91,956 was recorded for the conversion feature. The fair value of the conversion feature was calculated using Black-Scholes and the following assumptions, estimated life of less than 1 year, volatility of 343%, risk free interest rate of 0.45%, and dividend yield of 0%.

On May 27, 2016, the Company entered into a convertible loan agreement with an investor pursuant to which the Company received a loan in the principal amount of $30,000. The loan matures one year from the date of the loan and bears interest at a per annum rate of 10%. The principal and accrued interest is convertible into common stock of the Company at a conversion rate of 25% of the prevailing per share market price. As of September 30, 2016 the principal balance and accrued interest payable was $31,036. As of September 30, 2016 a derivative liability in the amount of $110,960 was recorded for the conversion feature. The fair value of the conversion feature was calculated using Black-Scholes and the following assumptions, estimated life of less than 1 year, volatility of 343%, risk free interest rate of 0.45%, and dividend yield of 0%.

 

F-22

On May 27, 2016, the Company entered into a convertible loan agreement with an investor pursuant to which the Company received a loan in the principal amount of $23,000. The loan matures one year from the date of the loan and bears interest at a per annum rate of 10%. The principal and accrued interest is convertible into common stock of the Company at a conversion rate of 25% of the prevailing per share market price. As of September 30, 2016 the principal balance and accrued interest payable was $23,794. As of September 30, 2016 a derivative liability in the amount of $85,070 was recorded for the conversion feature. The fair value of the conversion feature was calculated using Black-Scholes and the following assumptions, estimated life of less than 1 year, volatility of 343%, risk free interest rate of 0.45%, and dividend yield of 0%.

On June 29, 2016, the Company entered into a convertible loan agreement with an investor pursuant to which the Company received a loan in the principal amount of $18,500. The loan matures one year from the date of the loan and bears interest at a per annum rate of 10%. The principal and accrued interest is convertible into common stock of the Company at a conversion rate of 25% of the prevailing per share market price. As of September 30, 2016 the principal balance and accrued interest payable was $18,971. As of September 30, 2016 a derivative liability in the amount of $69,283 was recorded for the conversion feature. The fair value of the conversion feature was calculated using Black-Scholes and the following assumptions, estimated life of less than 1 year, volatility of 343%, risk free interest rate of 0.45%, and dividend yield of 0%.

On July 23, 2016, the Company entered into a convertible loan agreement with an investor pursuant to which the Company received a loan in the principal amount of $25,000. The loan matures one year from the date of the loan and bears interest at a per annum rate of 10%. The principal and accrued interest is convertible into common stock of the Company at a conversion rate of 25% of the prevailing per share market price. As of September 30, 2016 the principal balance and accrued interest payable was $25,473. As of September 30, 2016 a derivative liability in the amount of $94,494 was recorded for the conversion feature. The fair value of the conversion feature was calculated using Black-Scholes and the following assumptions, estimated life of less than 1 year, volatility of 343%, risk free interest rate of 0.45%, and dividend yield of 0%.

On September 12, 2016, the Company entered into a convertible loan agreement with an investor pursuant to which the Company received a loan in the principal amount of $25,000. The loan matures one year from the date of the loan and bears interest at a per annum rate of 10%. The principal and accrued interest is convertible into common stock of the Company at a conversion rate of 50% of the prevailing per share market price. As of September 30, 2016 the principal balance and accrued interest payable was $25,123. As of September 30, 2016 a derivative liability in the amount of $47,007 was recorded for the conversion feature. The fair value of the conversion feature was calculated using Black-Scholes and the following assumptions, estimated life of less than 1 year, volatility of 343%, risk free interest rate of 0.45%, and dividend yield of 0%.

As of September 30, 2016, working capital loans payable in the amount of $104,785 were received from non-affiliated third parties. The loans are due on demand and bear no interest.

NOTE 5 CAPITAL TRANSACTIONS

Preferred B Shares

As of September 30, 2016 the Company sold 17,500 convertible preferred B shares for $17,500.

Common Stock and Common Stock Equivalents

On October 15, 2015 the Company issued 666,668 shares upon exercise of warrants. On October 19, 2015 the Company issued 250,000 shares upon exercise of warrants.

On December 22, 2015, the Company issued 340,000 shares to settle debts. The shares were valued at the market price on the date issued.

F-23

On December 22, 2015, the Company issued 487,500 shares for consulting services. The shares were valued at the market price on the date issued.

During the year ended December 31, 2015, the Company issued 857,675 shares of its common stock upon conversion of $5,000 in principal and interest of convertible promissory notes.

On February 5, 2016, the Company issued 1,800,000 shares for consulting services. The shares were valued at the market price on the date issued.

On February 5, 2016, the Company issued 2,906,720 shares to an accredited investor for financing costs. The shares were valued at the market price on the date issued.

During the period ended September 30, 2016, the Company issued 670,206,473 shares of its common stock as repayment of debt in the amount of $177,860.

NOTE 6 WARRANTS

On May 15, 2015, 125,000 warrants with an exercise price of $0.15 were issued in conjunction with financing. The fair value of the warrants was calculated using Black-Scholes and the following assumptions, estimated life of 3 years, volatility of 175%, risk free interest rate of 0.01%, and dividend yield of 0%.

On May 21, 2015, 75,000 warrants with an exercise price of $0.15 were issued in conjunction with financing. The fair value of the warrants was calculated using Black-Scholes and the following assumptions, estimated life of 3 years, volatility of 175%, risk free interest rate of 0.01%, and dividend yield of 0%.

On September 3, 2015, warrants held by lenders to issue 916,668 shares were extended through December 31, 2017 and the exercise price was amended to $0.01. The fair value of the warrants as a result of the extension and amended exercise price was calculated using Black-Scholes and the following assumptions, estimated life of 2.33 years, volatility of 175%, risk free interest rate of 0.01%, and dividend yield of 0%.

NOTE 7 STOCKHOLDER'S DEFECIENCY

Authorized Shares

The Company’s Board of Directors is authorized to issue from time to time up to 2 million shares of preferred stock in one or more series, and to fix for each such series such voting power and such designations, preferences, relative participating or other rights, redemption rights, conversion privileges and such qualifications or restrictions thereof as shall be adopted by the board and set forth in an amendment to the Company’s Certificate of Incorporation. Unless a vote of any shareholders is required pursuant to the rights of the holders of preferred stock then outstanding, the board may from time to time increase or decrease (but not below the number of shares of such series outstanding) the number of shares of any series of Preferred Stock subsequent to the issuance of shares of that series.

On the 26th April 2016 the company applied to the State of Delaware to designate a Series B Convertible Preferred Stock and the amendment of the Amended and restated Certificate of Incorporation of the company that the total number of shares of all classes of stock that the company shall have the authority to issue is 300,000,000 of which 298,000,000 are shares of common stock , par value $0.01 per share and 2,000,000 shares are Preferred Stock, par value $0.01.

On the 14th July, 2016 The State of Delaware approved the amendment of the Amended and restated Certificate of Incorporation of the company that the total number of shares of all classes of stock that the company shall have the authority to issue is 750,000,000 of which 748,000,000 are shares of common stock, par value $0.01.

F-24

Equity Incentive Plans

In April 2005, the Company adopted the 2005 Equity Incentive Plan (the "2005 Plan"). A total of 87,500 shares of Common Stock were originally reserved for issuance under the 2005 Plan. The 2005 Plan provides for the grant of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, bonus stock, awards in lieu of cash obligations, other stock-based awards and performance units. The 2005 Plan also permits cash payments under certain conditions. The compensation committee of the Board of Directors is responsible for determining the type of award, when and to who awards are granted, the number of shares and the terms of the awards and exercise prices. The options are exercisable for a period not to exceed ten years from the date of grant. Vesting periods range from immediately to four years. Under the 2005 plan options granted expire no later than the tenth anniversary from the date of the grant.

In April 2005, the Company adopted the 2005 Non-Employee Directors Stock Option Plan (the "2005 Directors Plan") providing for the issuance of up to 20,000 shares of Common Stock to non-employee directors. Under the 2005 Directors Plan, only non-qualified options may be issued and they will be exercisable for a period of up to six years from the date of grant.

The 2005 Plan and the Non-Employee Directors Plan authorized options exercisable into 95,000 shares of common stock at an exercise price of $7.80. As of September 30, 2016, options for an aggregate of 6,500 shares of Common Stock remain available for future grants under the Company’s 2005 Plan and 2005 Directors Plan.

Stock Options:

Options outstanding and exercisable at December 31, 2015:

	Amount of Options			Weighed Average Exercise Price		Weighed Average Remaining Life in Years
Outstanding at the beginning of the year		57,050		$	9.41
Expired		(18,150	)		-
Outstanding at the end of the year		38,900		$	8.20		2.34
Exercisable at the end of the year		38,900		$	8.20		2.34

Stock Warrants

Warrants outstanding and exercisable at December 31, 2015:

	Amount of Warrants			Weighed Average Exercise Price		Weighed Average Remaining Life in Years
Outstanding at the beginning of the year		514,217
Expired		(291,717	)		-
Issued		200,000
Outstanding at the end of the year		422,500		$	0.26		2.98
Exercisable at the end of the year		422,500		$	0.26		2.98

F-25

NOTE 8 INCOME TAXES

For the year ended December 31, 2015, the Company had available for U.S federal income tax purposes net operating loss carryovers of approximately $5,000,000, which expire beginning in 2018. The net operating loss carryovers may be subject to limitations under Internal Revenue Code due to significant changes in the Company’s ownership. The Company has provided a full valuation allowance against the full amount of the net operating loss benefit, since, in the opinion of management, based upon the earnings history of the Company it is more likely than not that the benefits will not be realized.

For the year ended December 31, 2015, the Company had available for UK income tax purposes net operating loss carryovers of approximately $800,000, which can be carried forward indefinitely. The Company has provided a full valuation allowance against the amount of UK unused net operating loss benefit, since management believes that, based upon the earnings history of the Company, it is more likely than not that the benefits will not be realized.

Management does not believe that the Company has any material uncertain tax positions requiring recognition or measurement in accordance with the provisions of ASC 740. The Company’s policy is to record interest and penalties on uncertain tax positions, if any, as income tax expense.

All tax years for the Company remain subject to future examinations by the applicable taxing authorities.

NOTE 9 RELATED PARTY TRANSACTIONS

On December 23, 2015, all of the issued and outstanding preferred stock (100 Series A shares) was acquired by Rodz Holding Ltd., a U.K. corporation, which is controlled by Owen Dukes, CEO of the Company. Each one share of Series A Preferred has voting rights equal to (x) 0.019607 multiplied by the total issued and outstanding Common Stock eligible to vote at the time of the respective vote (the "Numerator"), divided by (y) 0.49, minus (z) the Numerator. As a result Rodz Holding Ltd. has a controlling interest in the Company.

NOTE 10 COMMITMENTS AND CONTINGENCIES

Reflective Solutions Ltd. leases office space for 4,400 GBP per quarter. The lease expires July 31, 2016.

Reflective Solutions Inc. leases office space for $750 per month. The lease expires December 31, 2017.

Reflective Solutions Bulgaria Ltd. leases office space for $1000 per month. The lease expires December 31, 2018.

Future minimum lease payments are as follows: Years ended December 31,

2016	$	34,000
2017	$	21,000
2018	$	12,000

NOTE 11 SUBSEQUENT EVENTS

Subsequent to September 30, 2016, the Company issued 112,694,690 shares of its common stock as repayment of debt in the amount of $11,824.

On the 4th November , 2016 The State of Delaware approved the amendment of the Amended and restated Certificate of Incorporation of the company that the total number of shares of all classes of stock that the company shall have the authority to issue is 2,000,000,000 of which 1,988,000,000 are shares of common stock, par value $0.0001.

 

F-26

PART III EXHIBITS

EXHIBIT INDEX

Exhibit Number	Description
1.1	Securities Purchase Agreement with Blackbridge Capital, LLC
2.1	Certificate of Amendment – Name Change to United Diagnostics, Inc.
2.2	Certificate of Amendment – Name Change to SPO Medical, Inc.
2.3	Certificate of Amendment – Name Change to SPO Global, Inc.
2.4	Bylaws
3.1	Certificate of Designation
6.1	Licensing Agreement Between SPO Global, Inc. and SPO Medical Equipment, Inc.
11.1	Consent of Eilers Law Group, P.A. (Included in 12.1)
12.1	Opinion of Eilers Law Group, P.A. regarding legality of the securities covered in this Offering

 

36

SIGNATURES

Pursuant to the requirements of Regulation A, the issuer certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form 1-A and has duly caused this amendment to Offering Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Woburn, state of Massachusetts on January 6, 2017.

 

SPO GLOBAL, INC.
By:	/s/ Owen Dukes
	Owen Dukes
	Chief Executive Officer

37

EX1A-1 UNDR AGMT

EXHIBIT 1.1

SECURITIES PURCHASE AGREEMENT

This SECURITIES PURCHASE AGREEMENT (the "Agreement"), dated as of June 23, 2016 by and between SPO Global Inc., a Delaware corporation, with headquarters located at 800 W Cummings Park, Suite 2000, Woburn, MA O1801 (the "Company"), and Blackbridge Capital Growth Fund, LLC, a Delaware limited liability company, with its address at 450 7th Ave, Suite 609, New York, NY 10123 (the 'Buyer").

WHEREAS:

A. Buyer desires to purchase and the Company desires to issue and sell, upon the terms and conditions set forth in this Agreement up to Five Hundred Thousand Dollars ($500,000.00) of the Company's common stock (the ''Securities" or "Shares"), $0.001 par value per share, of the Company (the "Common Stock"), upon the terms and subject to the limitations and conditions set forth in this Agreement.

B. The Buyer wishes to purchase, upon the terms and conditions stated in this Agreement, such principal amount of Securities as is set forth immediately below its name on the signature pages hereto; and

NOW THEREFORE, the Company and the Buyer severally (and not jointly) hereby agree as follows:

1. Purchase and Sale of Securities.

a. Purchase of Securities, Draw Down. During the term of this Agreement, the Company may sell the Buyer up to $500,000.00 worth of shares of common stock (a "Reg A Purchase"). In no event may any Reg A Purchase be in an amount that would result in the beneficial ownership of more than 9.99% of the outstanding stock of the Company by Buyer.

b. Maximum Reg A Purchase. The maximum Reg A Purchase allowed under this Agreement shall be equal to the lesser of $75,000.00 or 200% of the average daily trading volume for the ten (10) trading days immediately preceding the Reg A Purchase Notice Date, multiplied by the lowest trading price for the Company' s common stock over the ten (10) trading days immediately preceding the Reg A Purchase Date.

c. Form of Payment, Purchase Price. The Purchase Price for each Reg A Purchase Notice shall be equal to a price to be determined by the Buyer and the Company upon the effectiveness of the Regulation A Offering Circular.

d. Commitment Fee. Upon the execution of this Agreement, the Company shall issue to Buyer a Commitment Fee of a Convertible Promissory Note in the amount of $12,500.00 (the "Note Commitment"); and $12,500.00 (the " Share Commitment") worth of restricted shares of common stock (the "Commitment Shares"), calculated as follows, the "Initial Commitment Shares" means such number of shares of Common Stock (rounded up to the nearest whole share) equal to the sum of the quotient obtained by dividing (x) $12,500.00, representing the Share Commitment, by (y) 90% [representing a 10% discount] of the lowest trading price of the Common Stock in the ten days prior to execution of the Agreement.

1

In addition, Company will be required to issue to the Buyer the shares representing the difference, if there is any, of the quotient obtained in the True-Up Calculation and the number of shares Issued as the Initial Commitment Shares. "Additional Commitment Shares" shall mean a number of shares of duly authorized, validly issued, fully paid and non assessable shares of Common Stock determined by the True-Up Calculation (the "True-Up Calculation") as follows, (i) the quotient obtained by dividing (x) $12,500.00, representing the Share Commitment, by (y) 90% of the lowest trading price of the Common Stock in the ten days prior to the earlier of (i) the Effective Date or (ii) 180 days following the execution of this Agreement.

If, at any time during the term of this Agreement, and upon the Regulation A Offering being qualified by the Commission, the Buyer may exchange the Commitment Note as subscription payment toward purchase of those shares offered for resale per the Reg A Offering. In the event that Buyer elects to exchange the Commitment Note for purchase of shares from the Reg A Offering, said shares shall be issued free of restrictive legend and will be deemed qualified shares. For the avoidance of doubt, Commitment Note shall be fully earned as of the Closing Date, regardless of whether any Reg A Purchases are issued by the Company or settled hereunder.

In the event that the total Commitment Shares issued or to be issued to the Buyer represents more than 9.99% of the outstanding stock of the Company, the Buyer has the right to have the Commitment Shares delivered in multiple issuances. For the avoidance of doubt, all of the Commitment Shares and Commitment Note shall be fully earned as of the Closing Date, regardless of whether any Reg A Purchases are issued by the Company or settled hereunder.

e. Closing Date. The initial Closing Date shall be the date of execution of this Agreement, at which time the Commitment Fee shall become due and payable, regardless of whether any Reg A Purchases are issued by the Company or settled hereunder. All Reg A Purchases shall be considered subsequent Closing Dates.

f. Term. The Term of this Agreement shall expire Two Years from the date on which the Company's FORM 1-A Registration Statement becomes effective. The Company may terminate this Agreement prior to the expiration, but only if the Company must terminate this Agreement as a condition of an Up-Listing Transaction.

g. Registration of Securities. Buyer shall have registration rights with respect to all Securities underlying this Agreement, which are issuable upon the Buyer' s Reg A Purchase of the Company's Common Stock. The Company shall file a Form FORM 1-A Offering Circular within three (3) months of the execution of this Agreement, in order to register all Common Shares underlying this Agreement. If such FORM 1-A Offering Circular is not filed within three (3) months of the execution of this Agreement, Buyer, in its sole discretion, may terminate this Agreement. In addition, if the FORM 1-A Offering Circular does not become effective within six (6) months from its initial filing date, Buyer may, in its sole discretion, terminate this Agreement. There shall be no cost or expense on behalf of Buyer related to the registration of the shares underlying this Agreement. The Company must ensure that the Offering Circular, once effective, remains effective at all times, not subject to any actual or threatened stop order or suspension. If the effectiveness of the Offering Circular lapses for any reason at any time, Buyer, in its sole discretion, may terminate this Agreement. Irrespective of the Company filing a Form FORM 1-A, or such Form FORM 1-A becoming effective, or any other provisions in this Agreement, the Company is obligated to issue to Buyer the Commitment Fee pursuant to Section f. of this Agreement upon execution of this Agreement.

2

2. Buyer's Representations and Warranties. The Buyer represents and warrants to the Company that:

a. Investment Purpose. As of the date hereof, the Buyer is purchasing the Securities for its own account and not with a present view towards the public sale or distribution thereof, except pursuant to sales registered or exempted from registration under the 1933 Act; provided, however, that by making the representations herein, the Buyer does not agree to hold any of the Securities for any minimum or other specific term and reserves the right to dispose of the Securities at any time in accordance with or pursuant to a Offering Circular or an exemption under the 1933 Act.

b. Accredited Investor Status. The Buyer is an "accredited investor" as that term is defined in Rule 50l(a) of Regulation D (an ''Accredited Investor").

c. Reliance on Exemptions. The Buyer understands that the Securities are being offered and sold to it in reliance upon specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying upon the truth and accuracy of, and the Buyer's compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Buyer set forth herein in order to determine the availability of such exemptions and the eligibility of the Buyer to acquire the Securities.

d. Information. The Buyer and its advisors, if any, have been, and for so long as the Securities remain outstanding will continue to be, furnished with all materials relating to the business, finances and operations of the Company and materials relating to the offer and sale of the Securities which have been requested by the Buyer or its advisors. The Buyer and its advisors, if any, have been, and for so long as the Securities remain outstanding will continue to be, afforded the opportunity to ask questions of the Company. Notwithstanding the foregoing, the Company has not disclosed to the Buyer any material nonpublic information and will not disclose such information unless such information is disclosed to the public prior to or promptly following such disclosure to the Buyer. Neither such inquiries nor any other due diligence investigation conducted by Buyer or any of its advisors or representatives shall modify, amend or affect Buyer's right to rely on the Company's representations and warranties contained in Section 3 below. The Buyer understands that its investment in the Securities involves a significant degree of risk. The Buyer is not aware of any facts that may constitute a breach of any of the Company's representations and warranties made herein.

e. Governmental Review. The Buyer understands that no United States federal or state agency or any other government or governmental agency has passed upon or made any recommendation or endorsement of the Securities.

f. Transfer or Re-sale. The Buyer understands that (i) the sale or re- sale of the Securities has not been, at the time of execution of this Agreement, registered under the 1933 Act or any applicable state securities laws, and the Securities may not be transferred unless (a) the Securities are sold pursuant to an effective Offering Circular under the 1933 Act, (b) the Buyer shall have delivered to the Company, at the cost of the Buyer, an opinion of counsel that shall be in form, substance and scope customary for opinions of counsel in comparable transactions to the effect that the Securities to be sold or transferred may be sold or transferred pursuant to an exemption from such registration , which opinion shall be accepted by the Company, (c) the Securities are sold or transferred to an "affiliate" (as defined in Rule 144 promulgated under the 1933 Act (or a successor rule) ("Rule 144')) of the Buyer who agrees to sell or otherwise transfer the Securities only in accordance with this Section 2(f) and who is an Accredited Investor, (d) the Securities are sold pursuant to Rule 144, or (e)the Securities are sold pursuant to Regulation Sunder the 1933 Act (or a successor rule) ("Regulation S'), and the Buyer shall have delivered to the Company, at the cost of the Buyer, an opinion of counsel that shall be in form, substance and scope customary for opinions of counsel in corporate transactions, which opinion shall be accepted by the Company; (ii) any sale of such Securities made in reliance on Rule 144 may be made only in accordance with the terms of said Rule and further, if said Rule is not applicable, any re-sale of such Securities under circumstances in which the seller (or the person through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the 1933 Act) may require compliance with some other exemption under the 1933 Act or the rules and regulations of the SEC thereunder; and (iii) neither the Company nor any other person is under any obligation to register such Securities under the 1933 Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder (in each case). Notwithstanding the foregoing or anything else contained herein to the contrary, the Securities may be pledged as collateral in connection with a bona fide margin account or other lending arrangement.

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g. Legends. The Buyer understands that the Securities and, until such time as the Shares have been registered under the 1933 Act may be sold pursuant to Rule 144 or Regulation S without any restriction as to the number of securities as of a particular date that can then be immediately sold, the Shares may bear a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of the certificates for such Securities):

"NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES."

The legend set forth above shall be removed and the Company shall issue a certificate without such legend to the holder of any Security upon which it is stamped, if, unless otherwise required by applicable state securities laws, (a) such Security is registered for sale under an effective registration statement filed under the 1933 Act or otherwise may be sold pursuant to Rule 144 or Regulation S without any restriction as to the number of securities as of a particular date that can then be immediately sold, or (b) such holder provides the Company with an opinion of counsel, in form, substance and scope customary for opinions of counsel in comparable transactions, to the effect that a public sale or transfer of such Security may be made without registration under the 1933 Act, which opinion shall be accepted by the Company so that the sale or transfer is effected. The Buyer agrees to sell all Securities, including those represented by a certificate(s) from which the legend has been removed, in compliance with applicable prospectus delivery requirements, if any. In the event that the Company does not accept the opinion of counsel provided by the Buyer with respect to the transfer of Securities pursuant to an exemption from registration, such as Rule 144 or Regulation S, at the Deadline, it will be considered an Event of Default pursuant to Section 3.2 of the Securities.

h. Authorization; Enforcement. This Agreement has been duly and validly authorized. This Agreement has been duly executed and delivered on behalf of the Buyer, and this Agreement constitutes a valid and binding agreement of the Buyer enforceable in accordance with its terms.

i. Residency. The Buyer is a resident of the jurisdiction set forth immediately below the Buyer's name on the signature pages hereto.

3. Representations and Warranties of the Company. The Company represents and warrants to the Buyer that:

a. Organization and Qualification. The Company and each of its Subsidiaries (as defined below), if any, is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated, with full power and authority (corporate and other) to own, lease, use and operate its properties and to carry on its business as and where now owned, leased, used, operated and conducted. Schedule 3(a) sets forth a list of all of the Subsidiaries of the Company and the jurisdiction in which each is incorporated. The Company and each of its Subsidiaries is duly qualified as a foreign corporation to do business and is in good standing in every jurisdiction in which its ownership or use of property or the nature of the business conducted by it makes such qualification necessary except where the failure to be so qualified or in good standing would not have a Material Adverse Effect. 'Material Adverse Effect" means any material adverse effect on the business, operations, assets, financial condition or prospects of the Company or its Subsidiaries, if any, taken as a whole, or on the transactions contemplated hereby or by the agreements or instruments to be entered into in connection herewith. "Subsidiaries" means any corporation or other organization, whether incorporated or unincorporated , in which the Company owns, directly or indirectly, any equity or other ownership interest.

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b. Authorization: Enforcement. (i) The Company has all requisite corporate power and authority to enter into and perform this Agreement, the Securities and to consummate the transactions contemplated hereby and thereby and to issue the Securities, in accordance with the terms hereof and thereof, (ii) the execution and delivery of this Agreement, the Securities by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by the Company's Board of Directors and no further consent or authorization of the Company, its Board of Directors, or its shareholders is required, (iii) this Agreement has been duly executed and delivered by the Company by its authorized representative, and such authorized representative is the true and official representative with authority to sign this Agreement and the other documents executed in connection herewith and bind the Company accordingly, and (iv) this Agreement constitutes, and upon execution and delivery by the Company of the Securities, each of such instruments will constitute, a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms.

c. Capitalization. As of the date hereof, the authorized capital stock of the Company consists of: (i) 298,000,000 shares of Common Stock, $0.001 par value per share, of which ______ shares were issued and outstanding as of June 23, 2016. All of such outstanding shares of capital stock are, or upon issuance will be, duly authorized, validly issued, fully paid and non-assessable. No shares of capital stock of the Company are subject to preemptive rights or any other similar rights of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of the Company. As of the effective date of this Agreement, (i) there are no outstanding options, scrip, rights to subscribe for, puts, calls, rights of first refusal, agreements, understandings, claims or other commitments or rights of any character whatsoever relating to, or securities or rights convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue additional shares of capital stock of the Company or any of its Subsidiaries, (ii) there are no agreements or arrangements under which the Company or any of its Subsidiaries is obligated to register the sale of any of its or their securities under the 1933 Act and (iii) there are no anti- dilution or price adjustment provisions contained in any security issued by the Company (or in any agreement providing rights to security holders) that will be triggered by the issuance of the Securities. The Company has furnished to the Buyer true and correct copies of the Company 's Certificate of Incorporation as in effect on the date hereof (''Certificate of Incorporation"), the Company's By-laws, as in effect on the date hereof (the 'By-laws"), and the terms of all securities convertible into or exercisable for Common Stock of the Company and the material rights of the holders thereof in respect thereto. The Company shall provide the Buyer with a written update of this representation signed by the Company's Chief Executive on behalf of the Company as of the Closing Date.

d. Issuance of Shares. The Shares are duly authorized and reserved for issuance and, will be validly issued, fully paid and non-assessable, and free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights or other similar rights of shareholders of the Company and will not impose personal liability upon the holder thereof.

e. Acknowledgment of Dilution. The Company understands and acknowledges the potentially dilutive effect to the Common Stock upon the issuance of the Shares. The Company further acknowledges that its obligation to issue the Shares in accordance with this Agreement, and the issuance of such Shares is absolute and unconditional regardless of the dilutive effect that such issuance may have on the ownership interests of other shareholders of the Company.

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f. No Conflicts. The execution, delivery and performance of this Agreement, the Securities by the Company and the consummation by the Company of the transaction s contemplated hereby and thereby will not (i) conflict with or result in a violation of any provision of the Certificate of Incorporation or By-laws, or (ii) violate or conflict with, or result in a breach of any provision of, or constitute a default (or an event which with notice or lapse of time or both could become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture, patent, patent license or instrument to which the Company or any of its Subsidiaries is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations and regulations of any self-regulatory organizations to which the Company or its securities are subject) applicable to the Company or any of its Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries is bound or affected (except for such conflicts, defaults, terminations , amendments , accelerations, cancellations and violations as would not, individually or in the aggregate, have a Material Adverse Effect). Neither the Company nor any of its Subsidiaries is in violation of its Certificate of Incorporation, By-laws or other organizational documents and neither the Company nor any of its Subsidiaries is in default (and no event has occurred which with notice or lapse of time or both could put the Company or any of its Subsidiaries in default) under, and neither the Company nor any of its Subsidiaries has taken any action or failed to take any action that would give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company or any of its Subsidiaries is a party or by which any property or assets of the Company or any of its Subsidiaries is bound or affected, except for possible defaults as would not, individually or in the aggregate, have a Material Adverse Effect. The businesses of the Company and its Subsidiaries, if any, are not being conducted, and shall not be conducted so long as the Buyer owns any of the Securities, in violation of any law, ordinance or regulation of any governmental entity. Except as specifically contemplated by this Agreement and as required under the 1933 Act and any applicable state securities laws, the Company is not required to obtain any consent, authorization or order of, or make any filing or registration with, any court, governmental agency, regulatory agency, self regulatory organization or stock market or any third party in order for it to execute, deliver or perform any of its obligations under this Agreement , the Securities in accordance with the terms hereof or thereof or to issue and sell the Securities in accordance with the terms hereof and to issue the Shares. All consents, authorizations, orders, filings and registrations which the Company is required to obtain pursuant to the preceding sentence have been obtained or effected on or prior to the date hereof. The Company is not in violation of the listing requirements of the Over-the- Counter Bulletin Board (the ''OTCBB") and does not reasonably anticipate that the Common Stock wil1 be delisted by the OTCBB in the foreseeable future. The Company and its Subsidiaries are unaware of any facts or circumstances which might give rise to any of the foregoing. If any Material Adverse Event takes place during the term of this Agreement, no Reg A Purchase Notice may be delivered by Company to Buyer, and Buyer may, in its sole discretion, terminate this Agreement. In addition, if a Material Adverse Effect or Event occurs subsequent to a Reg A Purchase Price being paid by Buyer, but prior to the sale of the Reg A Purchase Shares, Buyer, in its sole discretion, may be entitled to receive the immediate return of the Purchase Price funds.

g. SEC Documents; Financial Statements. The Company has, or once it becomes a public entity will, timely file all reports, schedules, forms, statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the Securities Exchange Act of 1934, as amended (the "1934 Act") (all of the foregoing filed prior to the date hereof and all exhibits included therein and financial statements and schedules thereto and documents (other than exhibits to such documents) incorporated by reference therein , being hereinafter referred to herein as the "SEC Documents"). Upon written request the Company will deliver to the Buyer true and complete copies of the SEC Documents, except for such exhibits and incorporated documents. As of their respective dates, the SEC Documents complied in all material respects with the requirements of the 1934 Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents , at the time they were filed with the SEC, 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 light of the circumstances under which they were made, not misleading. None of the statements made in any such SEC Documents is, or has been, required to be amended or updated under applicable law (except for such statements as have been amended or updated in subsequent filings prior the date hereof). As of their respective dates, the financial statements of the Company included in the SEC Documents complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto. Such financial statements have been prepared in accordance with United States generally accepted accounting principles, consistently applied, during the periods involved and fairly present in all material respects the consolidated financial position of the Company and its consolidated Subsidiaries as of the dates thereof and the consolidated results of their operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year- end audit adjustments). Except as set forth in the financial statements of the Company included in the SEC Documents, the Company has no liabilities, contingent or otherwise, other than (i) liabilities incurred in the ordinary course of business subsequent to June 23, 2016, and (ii) obligations under contracts and commitments incurred in the ordinary course of business and not required under generally accepted accounting principles to be reflected in such financial statements, which, individually or in the aggregate, are not material to the financial condition or operating results of the Company. The Company is subject to the reporting requirements of the 1934 Act.

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h. Absence of Certain Changes. Since June 23, 2016, there have been no material adverse change and no material adverse development in the assets, liabilities, business, properties, operations, financial condition, results of operations, prospects or 1934 Act reporting status of the Company or any of its Subsidiaries.

i. Absence of Litigation. There is no action, suit, claim, 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 Company or any of its Subsidiaries, threatened against or affecting the Company or any of its Subsidiaries, or their officers or directors in their capacity as such, that could have a Material Adverse Effect. Schedule 3(i) contains a complete list and summary description of any pending or, to the knowledge of the Company, threatened proceeding against or affecting the Company or any of its Subsidiaries, without regard to whether it would have a Material Adverse Effect. The Company and its Subsidiaries are unaware of any facts or circumstances which might give rise to any of the foregoing.

j. Patents, Copyrights, etc. The Company and each of its Subsidiaries owns or possesses the requisite licenses or rights to use all patents, patent applications, patent rights, inventions, know-how, trade secrets, trademarks, trademark applications, service marks, service names, trade names and copyrights ("Intellectual Property") necessary to enable it to conduct its business as now operated (and, as presently contemplated to be operated in the future); there is no claim or action by any person pertaining to, or proceeding pending, or to the Company's knowledge threatened, which challenges the right of the Company or of a Subsidiary with respect to any Intellectual Property necessary to enable it to conduct its business as now operated (and, as presently contemplated to be operated in the future); to the best of the Company's knowledge , the Company's or its Subsidiaries' current and intended products , services and processes do not infringe on any Intellectual Property or other rights held by any person; and the Company is unaware of any facts or circumstances which might give rise to any of the foregoing. The Company and each of its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of their Intellectual Property.

k. No Materially Adverse Contracts, Etc. Neither the Company nor any of its Subsidiaries is subject to any charter, corporate or other legal restriction, or any judgment, decree, order, rule or regulation which in the judgment of the Company's officers has or is expected in the future to have a Material Adverse Effect. Neither the Company nor any of its Subsidiaries is a party to any contract or agreement which in the judgment of the Company's officers has or is expected to have a Material Adverse Effect.

1. Tax Status. The Company and each of its Subsidiaries has made or filed all federal, state and foreign income and all other tax returns, reports and declarations required by any jurisdiction to which it is subject (unless and only to the extent that the Company and each of its Subsidiaries has set aside on its books provisions reasonably adequate for the payment of all unpaid and unreported taxes) and 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, except those being contested in good faith and has set aside on its books provisions reasonably adequate for the payment of all 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 know of no basis for any such claim. The Company has not executed a waiver with respect to the statute of limitations relating to the assessment or collection of any foreign, federal, state or local tax. None of the Company's tax returns is presently being audited by any taxing authority.

m. Certain Transactions. None of the officers, directors, or employees of the Company is presently a party to any transaction with the Company or any of its Subsidiaries (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, or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any corporation, partnership, trust or other entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner. In addition , Company agrees that during the term of this Agreement, it shall not enter into a similar financing arrangement with any other individual or entity.

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n. Disclosure. All information relating to or concerning the Company or any of its Subsidiaries set forth in this Agreement and provided to the Buyer pursuant to Section 2(d) hereof and otherwise in connection with the transactions contemplated hereby is true and correct in all material respects and the Company has not omitted to state any material fact necessary in order to make the statements made herein or therein, in light of the circumstances under which they were made, not misleading. No event or circumstance has occurred or exists with respect to the Company or any of its Subsidiaries or its or their business, properties, prospects, operations or financial conditions, which, under applicable law, rule or regulation, requires public disclosure or announcement by the Company but which has not been so publicly announced or disclosed (assuming for this purpose that the Company's reports filed under the 1934 Act are being incorporated into an effective registration statement filed by the Company under the 1933 Act).

o. Acknowledgment Regarding Buyer's Purchase of Securities. The Company acknowledges and agrees that the Buyer is acting solely in the capacity of arm's length purchasers with respect to this Agreement and the transactions contemplated hereby . The Company further acknowledges that the Buyer is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement and the transactions contemplated hereby and any statement made by the Buyer or any of its respective representatives or agents in connection with this Agreement and the transactions contemplated hereby is not advice or a recommendation and is merely incidental to the Buyer' purchase of the Securities. The Company further represents to the Buyer that the Company's decision to enter into this Agreement has been based solely on the independent evaluation of the Company and its representatives.

p. No Integrated Offering. Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf , has directly or indirectly made any offers or sales in any security or solicited any offers to buy any security under circumstances that would require registration under the 1933 Act of the issuance of the Securities to the Buyer. The issuance of the Securities to the Buyer will not be integrated with any other issuance of the Company's securities (past, current or future) for purposes of any shareholder approval provisions applicable to the Company or its securities.

q. No Brokers. The Company has taken no action which would give rise to any claim by any person for brokerage commissions, transaction fees or similar payments relating to this Agreement or the transactions contemplated hereby.

r. Permits; Compliance. The Company and each of its Subsidiaries is in possession of all franchises, grants, authorizations, licenses, permits, easements, variances, exemptions, consents, certificates, approvals and orders necessary to own, lease and operate its properties and to carry on its business as it is now being conducted (collectively, the ''Company Permits"), and there is no action pending or, to the knowledge of the Company, threatened regarding suspension or cancellation of any of the Company Permits. Neither the Company nor any of its Subsidiaries is in conflict with, or in default or violation of, any of the Company Permits, except for any such conflicts, defaults or violations which, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect. Since September 30, 2013, neither the Company nor any of its Subsidiaries has received any notification with respect to possible conflicts, defaults or violations of applicable laws, except for notices relating to possible conflicts, defaults or violations, which conflicts, defaults or violations would not have a Material Adverse Effect.

s. Environmental Matters.

(i) There are, to the Company's knowledge, with respect to the Company or any of its Subsidiaries or any predecessor of the Company, no past or present violations of Environmental Laws (as defined below), releases of any material into the environment, actions, activities, circumstances, conditions, events, incidents, or contractual obligations which may give rise to any common law environmental liability or any liability under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 or similar federal, state, local or foreign laws and neither the Company nor any of its Subsidiaries has received any notice with respect to any of the foregoing, nor is any action pending or, to the Company's knowledge, threatened in connection with any of the foregoing. The term "Environmental Laws" means all federal, state, local or foreign laws relating to pollution or protection of human health or the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata), including, without limitation, 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.

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(ii) Other than those that are or were stored, used or disposed of in compliance with applicable law, no Hazardous Materials are contained on or about any real property currently owned, leased or used by the Company or any of its Subsidiaries, and no Hazardous Materials were released on or about any real property previously owned, leased or used by the Company or any of its Subsidiaries during the period the property was owned, leased or used by the Company or any of its Subsidiaries, except in the normal course of the Company's or any of its Subsidiaries' business.

(iii) There are no underground storage tanks on or under any real property owned, leased or used by the Company or any of its Subsidiaries that are not in compliance with applicable law.

t. Title to Property. The Company and its Subsidiaries have good and marketable title in fee simple to all real property and good and marketable title to all personal property owned by them which is material to the business of the Company and its Subsidiaries, in each case free and clear of all liens, encumbrances and defects except such as are described in Schedule 3(t) or such as would not have a Material Adverse Effect. Any real property and facilities held under lease by the Company and its Subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as would not have a Material Adverse Effect.

u. Insurance. The Company and each of its Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as management of the Company believes to be prudent and customary in the businesses in which the Company and its Subsidiaries are engaged. Neither the Company nor any such 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 at a cost that would not have a Material Adverse Effect. Upon written request the Company will provide to the Buyer true and correct copies of all policies relating to directors' and officers' liability coverage, errors and omissions coverage, and commercial general liability coverage.

v. Internal Accounting Controls. The Company and each of its Subsidiaries maintain a system of internal accounting controls sufficient, in the judgment of the Company's board of directors, 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 generally accepted accounting principles 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.

w. Foreign Corrupt Practices. Neither the Company, nor any of its Subsidiaries, nor any director, officer, agent, employee or other person acting on behalf of the Company or any Subsidiary has, in the course of his actions for, or on behalf of, the Company, used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expenses relating to political activity; made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended, or made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment to any foreign or domestic government official or employee.

x. Solvency. The Company (after giving effect to the transactions contemplated by this Agreement) is solvent (i.e., its assets have a fair market value in excess of the amount required to pay its probable liabilities on its existing debts as they become absolute and matured) and currently the Company has no information that would lead it to reasonably conclude that the Company would not, after giving effect to the transaction contemplated by this Agreement, have the ability to, nor does it intend to take any action that would impair its ability to, pay its debts from time to time incurred in connection therewith as such debts mature. The Company did not receive a qualified opinion from its auditors with respect to its most recent fiscal year end and, after giving effect to the transactions contemplated by this Agreement, does not anticipate or know of any basis upon which its auditors might issue a qualified opinion in respect of its current fiscal year.

y. No Investment Company. The Company is not, and upon the issuance and sale of the Securities as contemplated by this Agreement will not be an "investment company" required to be registered under the Investment Company Act of 1940 (an "Investment Company"). The Company is not controlled by an Investment Company.

z. Breach of Representations and Warranties by the Company. If the Company breaches any of the representations or warranties set forth in this Section 3, and in addition to any other remedies available to the Buyer pursuant to this Agreement, it will be considered an Event of default.

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4. Covenants.

a. Best Efforts. The parties shall use their best efforts to satisfy timely each of the conditions described in Section 6 and 7 of this Agreement.

b. Use of Proceeds. The Company shall use the proceeds for general working capital purposes.

c. Expenses. At each Closing, the Company shall reimburse Buyer for expenses incurred by them in connection with the negotiation, preparation, execution delivery and performance of this Agreement and the other agreements to be executed in connection herewith ("Documents"), including, without limitation, reasonable attorneys' and consultants' fees and expenses, transfer agent fees, fees for stock quotation services, fees relating to any amendments or modifications of the Documents or any consents or waivers of provisions in the Documents, fees for the preparation of opinions of counsel, escrow fees, and costs of restructuring the transactions contemplated by the Documents. When possible, the Company must pay these fees directly, otherwise the Company must make immediate payment for reimbursement to the Buyer for all fees and expenses immediately upon written notice by the Buyer or the submission of an invoice by the Buyer. In respect of this Transaction, the Company shall reimburse Buyer for Buyer's expenses at each Closing, which shall be listed in the disbursement authorization and shall be included in the total funding amount.

d. Financial Information. Upon written request the Company agrees to send or make available the following reports to the Buyer until the Buyer transfers, assigns, or sells all of the Securities: (i) within ten ( I 0) days after the filing with the OTC Markets, a copy of its Annual Report, its Quarterly Reports, and any Current Reports; (ii) within two (2) days after release, copies of all press releases issued by the Company or any of its Subsidiaries; and (iii) contemporaneously with the making available or giving to the shareholders of the Company, copies of any notices or other information the Company makes available or gives to such shareholders.

e. Listing. The Company shall promptly secure the listing of the Shares upon each national securities exchange or automated quotation system, if any, upon which shares of Common Stock are then listed (subject to official notice of issuance) and, so long as the Buyer owns any of the Securities, shall maintain, so long as any other shares of Common Stock shall be so listed, such listing of all Shares from time to time issuable upon future Closings. The Company will obtain and, so long as the Buyer owns any of the Securities, maintain the listing and trading of its Common Stock on the OTCBB or any equivalent replacement quotation service, the Nasdaq National Market ("Nasdaq"), the Nasdaq Small Cap Market ("Nasdaq Small Cap'), the New York Stock Exchange (''NYSE"), or the American Stock Exchange ("AMEX") and will comply in all respects with the Company's reporting, filing and other obligations under the bylaws or rules of the Financial Industry Regulatory Authority ("FINRA") and such exchanges, as applicable. The Company shall promptly provide to the Buyer copies of any notices it receives from the OTCBB and any other exchanges or quotation systems on which the Common Stock is then listed regarding the continued eligibility of the Common Stock for listing on such exchanges and quotation systems.

f. Corporate Existence. So long as the Buyer beneficially owns any Securities, the Company shall maintain its corporate existence and shall not sell all or substantially all of the Company's assets, except in the event of a merger or consolidation or sale of all or substantially all of the Company's assets, where the surviving or successor entity in such transaction (i) assumes the Company's obligations hereunder and under the agreements and instruments entered into in connection herewith and (ii) is a publicly traded corporation whose Common Stock is listed for trading on the OTCBB or any equivalent replacement quotation service, Nasdaq, Nasdaq Small Cap, NYSE or AMEX.

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g. No Integration. The Company shall not make any offers or sales of any security (other than the Securities) under circumstances that would require registration of the Securities being offered or sold hereunder under the 1933 Act or cause the offering of the Securities to be integrated with any other offering of securities by the Company for the purpose of any stockholder approval provision applicable to the Company or its securities.

h. Breach of Covenants. If the Company breaches any of the covenants set forth in this Section 4, and in addition to any other remedies available to the Buyer pursuant to this Agreement, it will be considered an event of default.

1. Failure to Comply with the 1934 Act. So long as the Buyer beneficially owns the Securities, the Company shall comply with the reporting requirements of the 1934 Act; and the Company shall continue to be subject to the reporting requirements of the 1934 Act.

j. Trading Activities. Neither the Buyer nor its affiliates has an open short position in the common stock of the Company and the Buyer agree that it shall not, and that it will cause its affiliates not to, engage in any short sales of or hedging transactions with respect to the common stock of the Company.

k. Transfer Agent Instructions. The Company shall issue irrevocable instructions to its transfer agent to issue certificates, registered in the name of the Buyer or its nominee, for the Shares in such amounts as specified from time to time by the Buyer to the Company (the "Irrevocable Transfer Agent Instructions"). In the event that the Borrower proposes to replace its transfer agent, the Borrower shall provide, prior to the effective date of such replacement, a fully executed Irrevocable Transfer Agent Instructions in a form as initially delivered pursuant to the Purchase Agreement (including but not limited to the provision to irrevocably reserve shares of Common Stock in the Reserved Amount) signed by the successor transfer agent to Borrower and the Borrower. The Company warrants that: (i) no instruction other than the Irrevocable Transfer Agent Instructions referred to in this Section 5, and stop transfer instructions to give effect to Section 2(f) hereof, will be given by the Company to its transfer agent and that the Securities shall otherwise be freely transferable on the books and records of the Company as and to the extent provided in this Agreement; (ii) it will not direct its transfer agent not to transfer or delay, impair, and/or hinder its transfer agent in transferring (or issuing)(electronically or in certificated form) any certificate for Shares to be issued to the Buyer pursuant to this Agreement; and (iii) it will not fail to remove (or directs its transfer agent not to remove or impairs, delays, and/or hinders its transfer agent from removing) any restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on any certificate for any Shares issued to the Buyer pursuant to this Agreement. Nothing in this Section shall affect in any way the Buyer's obligations and agreement set forth in Section 2(g) hereof to comply with all applicable prospectus delivery requirements, if any, upon re- sale of the Securities. If the Buyer provides the Company, at the cost of the Buyer, with (i) an opinion of counsel in form, substance and scope customary for opinions in comparable transactions, to the effect that a public sale or transfer of such Securities may be made without registration under the 1933 Act and such sale or transfer is effected or (ii) the Buyer provides reasonable assurances that the Securities can be sold pursuant to Rule 144, the Company shall permit the transfer, promptly instruct its transfer agent to issue one or more certificates, free from restrictive legend, in such name and in such denominations as specified by the Buyer. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Buyer, by vitiating the intent and purpose of the transactions contemplated hereby. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Section 5 may be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Section, that the Buyer shall be entitled, in addition to all other available remedies, to an injunction restraining any breach and requiring immediate transfer, without the necessity of showing economic loss and without any bond or other security being required.

1. Conditions to the Company's Obligation to Sell. The obligation of the Company hereunder to issue and sell the Shares to the Buyer at each Closing is subject to the satisfaction, at or before each Closing Date of each of the following conditions thereto, provided that these conditions are for the Company's sole benefit and may be waived by the Company at any time in its sole discretion:

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i. The Buyer shall have executed this Agreement and delivered the same to the Company.

ii. The representations and warranties of the Buyer shall be true and correct in all material respects as of the date when made and as of each Closing Date as though made at that time (except for representations and warranties that speak as of a specific date), and the Buyer shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Buyer at or prior to each Closing Date.

iii. No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this Agreement.

m. Conditions to The Buyer's Obligation to Purchase. The obligation of the Buyer hereunder to purchase the Securities at each Closing is subject to the satisfaction, at or before each Closing Date of each of the following conditions, provided that these conditions are for the Buyer's sole benefit and may be waived by the Buyer at any time in its sole discretion:

i. The Company shall have executed this Agreement and delivered same to the Buyer.

ii. The representations and warranties of the Company shall be true and correct in all material respects as of the date when made and as of the Closing Date as though made at such time (except for representations and warranties that speak as of a specific date) and the Company shall have performed, satisfied and comp1ied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Company at or prior to the Closing Date. The Buyer shall have received a certificate or certificates, executed by the chief executive officer of the Company, dated as of the Closing Date, to the foregoing effect and as to such other matters as may be reasonably requested by the Buyer including, but not limited to certificate s with respect to the Company 's Certificate of Incorporation, By-laws and Board of Directors' resolutions relating to the transactions contemplated hereby.

iii. No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this Agreement.

iv. No event shall have occurred which could reasonably be expected to have a Material Adverse Effect on the Company including but not limited to a change in the 1934 Act reporting status of the Company or the failure of the Company to be timely in its 1934 Act reporting obligations.

vi. The Shares shall have been authorized for quotation on the OTCBB (or any equivalent replacement quotation service) and trading in the Common Stock on the OTCBB shall not have been suspended by the SEC, FINRA, or OTC Markets.

vii. The Buyer shall have received an officer's certificate described in Section 3(c) above, dated as of the initial Closing Date.

vii. The volume weighted average price (VWAP) of the Issuer' s common stock does not fall below $0.0009 per share during the 5-day trading period prior to a Reg A Purchase.

viii. The Reg A Purchase Price must be less than sixty-percent of the lowest trading price per share during the 5-day trading period prior to a Reg A Purchase.

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5. Governing Law; Miscellaneous.

a. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated by this Agreement shall be brought only in the state courts of New York or in the federal courts located in the state of New York. The parties to this Agreement hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non convenience. The Company and Buyer waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorney's fees and costs. In the event that any provision of this Agreement or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement. Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this Agreement or any other Transaction Document by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.

b. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which shall constitute one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party.

c. Headings. The headings of this Agreement are for convenience of reference only and shall not form part of, or affect the interpretation of, this Agreement.

d. Severability. In the event that any provision of this Agreement is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any provision hereof which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision hereof.

e. Entire Agreement; Amendments. This Agreement and the instruments referenced herein contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company nor the Buyer makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement may be waived or amended other than by an instrument in writing signed by the majority in interest of the Buyer.

f. Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine , at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be:

If to the Company to:

SPO Global Inc.

800 W Cummings Park Suite 2000

Woburn, MA 01801

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If to the Buyer:

Blackbridge Capital Growth Fund, LLC 

____________________________ 

____________________________ 

____________________________

Each party shall provide notice to the other party of any change in address.

g. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and assigns. Neither the Company nor the Buyer shall assign this Agreement or any rights or obligations hereunder without the prior written consent of the other. Notwithstanding the foregoing, subject to Section 2(f), the Buyer may assign its rights hereunder to any person that purchases Securities in a private transaction from the Buyer or to any of its "affiliates," as that term is defined under the 1934 Act, without the consent of the Company.

h. Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other person.

i. Survival. The representations and warranties of the Company and the agreements and covenants set forth in this Agreement shall survive the closing hereunder notwithstanding any due diligence investigation conducted by or on behalf of the Buyer. The Company agrees to indemnify and hold harmless the Buyer and all their officers, directors, employees and agents for loss or damage arising as a result of or related to any breach or alleged breach by the Company of any of its representations, warranties and covenants set forth in this Agreement or any of its covenants and obligations under this Agreement, including advancement of expenses as they are incurred.

j. Publicity. The Company, and the Buyer shall have the right to review a reasonable period of time before issuance of any press releases, SEC, OTC Markets, or FINRA filings, or any other public statements with respect to the transactions contemplated hereby; provided, however, that the Company shall be entitled, without the prior approval of the Buyer, to make any press release or SEC, OTCBB (or other applicable trading market) or FINRA filings with respect to such transactions as is required by applicable law and regulations (although the Buyer shall be consulted by the Company in connection with any such press release prior to its release and shall be provided with a copy thereof and be given an opportunity to comment thereon).

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k. Further Assurances. Each party shall do and perform , or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

l. No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.

m. Remedies. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Buyer by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Agreement will be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Agreement, that the Buyer shall be entitled, in addition to all other available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach of this Agreement and to enforce specifically the terms and provisions hereof, without the necessity of showing economic loss and without any bond or other security being required.

IN WITNESS WHEREOF, the undersigned Buyer and the Company have caused this Agreement to be duly executed as of the date first above written.

SPO Global Inc.

____________________________

By: Owen Dukes

Title: CEO

Blackbridge Capital Growth Fund, LLC

Docu Signed by:

___________________________

By: Alexander Dillon

Title: Managing Partner

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CORPORATE RESOLUTION OF THE BOARD OF DIRECTORS OF SPO GLOBAL INC.

We, the undersigned, do hereby certify that at a meeting of the Board of Directors of SPO Global Inc., a Delaware corporation organized under the laws of the State of Delaware (the "Corporation"), duly held on June 23, 2016 at the offices of the Corporation, which said meeting no less than two directors were present and voting throughout, the following resolution, upon motions made, seconded and carried, was duly adopted and is now in full force and effect:

WHEREAS, the Board of Directors of the Corporation deem it in the best interests of the Corporation to enter into the Securities Purchase Agreement June 23, 2016 (the "Agreement"), in connection with the issuance of a convertible note of the Corporation, in the aggregate principal amount of $12,500.00 (the "Note"), convertible into shares of common stock, par value $0.001 per share, of the Company (the "Common Stock"), upon the terms and subject to the limitations and conditions set forth in such Note, along with an irrevocable letter agreement with Continental Stock Transfer, the Corporation' s transfer agent, with respect to the reserve of shares of common stock of the Corporation to be issued upon any conversion of the Note; the issuance of such shares of common stock in connection with a conversion of the Note; and the indemnification of Continental Stock Transfer for all loss, liability, or expense in carrying out the authority and direction contained in the irrevocable letter agreement (the "Letter Agreement");

NOW, THEREFORE, BE IT:

RESOLVED, that the Corporation is hereby authorized to enter into the Agreement, the Note and the Letter Agreement which provides in pertinent part: (i) reserve shares of common stock of the Corporation to be issued upon any conversion of the Note; (ii) issue such shares of common stock in connection with a conversion of the Note (issuance upon receipt of a notice of conversion of the holder of the Note) without any further action or confirmation by the Corporation; (iii) hereby authorizes the issuance of such number of shares as will be necessary to fully convert the note under its terms and any such shares shall be considered fully paid and non-assessable at the time of their issuance and (iv) the Corporation indemnifies Continental Stock Transfer for all loss, liability, or expense in carrying out the authority and direction contained in the Letter Agreement:

RESOLVED, that any executive officer of the Corporation be, and hereby is, authorized, empowered and directed, from time to time, to take such additional action and to execute, certify and deliver to the transfer agent of the Corporation, as any appropriate or proper to implement the provisions of the foregoing resolutions:

The undersigned, do hereby certify that we are members of the Board of Directors of the Corporation; that the attached is a true and correct copy of resolutions duly adopted and ratified at a meeting of the Board of Directors of the Corporation duly convened and held in accordance with its by- laws and the laws of the State of Delaware, as transcribed by us from the minutes; and that the same have not in any way been modified, repealed or rescinded and are in full force and effect.

IN WITNESS WHEREOF, We have hereunto set our hands as President/CEO and Members of the Board of Directors of the Corporation.

Dated: ____________________

Members of the Board:

Title:

Title:

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NEITHER THIS NOTE NOR THE SECURITIES INTO WHICH THIS NOTE IS CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR ANY STATE SECURITIES LAWS AND NEITHER THIS NOTE NOR ANY INTEREST THEREIN NOR THE SECURITIES INTO WHICH THIS NOTE IS CONVERTIBLE MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS.

CONVERTIBLE PROMISSORY NOTE

Principal Amount: $12,500.00   Issue Date: June 23, 2016  Maturity Date: August 23, 2017

For good and valuable consideration, SPO Global Inc. a Delaware corporation ("Maker"), hereby makes and delivers this Promissory Note (this " Note") in favor of Blackbridge Capital Growth Fund, LLC, or its assigns ("Holder"), and hereby agrees as follows:

ARTICLE I.

 PRINCIPAL AND INTEREST

Section 1.1. For value received, Maker promises to pay to Holder at such place as Holder or its assigns may designate in writing, in currently available funds of the United States, the principal sum of Two Hundred Thousand, Dollars. Maker's obligation under this Note shall accrue interest at the rate of Five percent (5.0%) per annum from the date hereof until paid in full. Interest shall be computed on the basis of a 365-day year or 366-day year, as applicable, and actual days lapsed. Accrual of interest shall commence on the first business day to occur after the Issue Date and continue until payment in full of the principal sum has been made or duly provided for.

Section 1.2.

a. All payments shall be applied first to interest, then to principal and shall be credited to the Maker's account on the date that such payment is physically received by the Holder.

b. All principal and accrued interest then outstanding shall be due and payable by the Maker to the Holder on or before August 23, 2017 (the "Maturity Date").

c. Maker shall have no right to prepay all or any part of the principal under this Note.

d. This Note is free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights or other similar rights of shareholders of the Maker and will not impose personal liability upon the holder thereof.

Section 1.3. This Note is issued as the Commitment Fee pursuant to Section 1 of Securities Purchase Agreement dated June 23, 2016, and attached below.

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ARTICLE II.

CONVERSION RIGHTS; CONVERSION PRICE

Section 2.1 Conversion. The Holder or its assigns shall have the right, from time to time, commencing on the Issuance Date of this Note, to convert any part of the outstanding interest or Principal Amount of this Note into fully paid and non-assessable shares of Common Stock of the Maker (the "Conversion Stock") at the Conversion Price determined as provided herein. Promptly after delivery to Maker of a Notice of Conversion of Convertible Note in the form attached hereto as Exhibit 1, properly completed and duly executed by the Holder or its assigns (a "Conversion Notice"), the Maker shall issue and deliver to or upon the order of the Holder that number of shares of Common Stock for the that portion of this Note to be converted as shall be determined in accordance herewith.

No fraction of a share or scrip representing a fraction of a share will be issued on conversion, but the number of shares issuable shall be rounded to the nearest whole share. The date on which Notice of Conversion is given (the "Conversion Date") shall be deemed to be the date on which the Holder faxes or emails the Notice of Conversion duly executed to the Maker. Certificates representing Common Stock upon conversion will be delivered to the Holder within two (2) trading days from the date the Notice of Conversion is delivered to the Maker. Delivery of shares upon conversion shall be made to the address specified by the Holder or its assigns in the Notice of Conversion.

Section 2.2. Conversion Price. Upon any conversion of this Note, the Conversion Price shall equal to Seventy-Five Percent (75%) [representing a 25% discount] of the lowest Trading Price (defined below) during the Valuation Period (defined below), and the Conversion Amount shall be the amount of principal or interest electively converted in the Conversion Notice. The total number of shares due under any conversion notice (''Notice Shares") will be equal to the Conversion Amount divided by the Conversion Price.

On the date that a Conversion Notice is delivered to Holder, the Company shall deliver an estimated number of shares ("Estimated Shares") to Holder's brokerage account equal to the Conversion Amount divided by the product of (i) Seventy-Five Percent (75%) [representing a 25% discount] and (ii) the lowest trading price in the twenty trading days prior to the day the Holder requests conversion.

The "Valuation Period" shall mean twenty (20) Trading Days, commencing on the first Trading Day following delivery and clearing of the Notice Shares in Holder's brokerage account, as reported by Holder ("Valuation Start Date"). If at any time, one or multiple times, during the Valuation Period the sum of Estimated Shares and Additional Shares already delivered to Holder is less than the Notice Shares, the company must immediately deliver enough shares equal to the difference ("Additional Shares"). A Conversion Amount will not be considered fully converted until the end of the Valuation Period for that Conversion Amount, as decreases in the Conversion Price would require the issuance of more Additional Shares, and thereby the issuance of more Notice Shares.

"Trading Price" means, for any security as of any date, any trading price on the OTC Bulletin Board, or other applicable trading market (the "OTCBB") as reported by a reliable reporting service ("Reporting Service") mutually acceptable to Maker and Holder (i.e. Bloomberg) or, if the OTCBB is not the principal trading market for such security, the price of such security on the principal securities exchange or trading market where such security is listed or traded. "Trading Day" shall mean any day on which the Common Stock is tradable for any period on the OTCBB, or on the principal securities exchange or other securities market on which the Common Stock is then being traded.

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Section 2.3. Reorganization, Reclassification, Merger, Consolidation or Disposition of Assets. In case the Maker shall reorganize its capital, reclassify its capital stock, consolidate or merge with or into another corporation (where the Maker is not the surviving corporation or where there is a change in or distribution with respect to the Common Stock of the Maker), or sell, transfer or otherwise dispose of all or substantially all its property, assets or business to another corporation and, pursuant to the terms of such reorganization, reclassification, merger, consolidation or disposition of assets, shares of common stock of the successor or acquiring corporation, or any cash, shares of stock or other securities or property of any nature whatsoever (including warrants or other subscription or purchase rights) in addition to or in lieu of common stock of the successor or acquiring corporation ("Other Property"), are to be received by or distributed to the holders of Common Stock of the Maker, then Holder shall have the right thereafter to receive, upon conversion of this Note, the number of shares of common stock of the successor or acquiring corporation or of the Maker, if it is the surviving corporation, and Other Property receivable upon or as a result of such reorganization, reclassification, merger, consolidation or disposition of assets by a holder of the number of shares of Common Stock into which this Note is convertible immediately prior to such event. In case of any such reorganization, reclassification, merger, consolidation or disposition of assets, the successor or acquiring corporation (if other than the Maker) shall expressly assume the due and punctual observance and performance of each and every covenant and condition of this Note to be performed and observed by the Maker and all the obligations and liabilities hereunder, subject to such modifications as may be deemed appropriate (as determined in good faith by resolution of the Board of Directors of the Maker) in order to provide for adjustments of the number of shares of common stock into which this Note is convertible which shall be as nearly equivalent as practicable to the adjustments provided for in this Section 2.3(a). For purposes of this Section 2.3(a), "common stock of the successor or acquiring corporation" shall include stock of such corporation of any class which is not preferred as to dividends or assets over any other class of stock of such corporation and which is not subject to redemption and shall also include any evidences of indebtedness, shares of stock or other securities which are convertible into or exchangeable for any such stock, either immediately or upon the arrival of a specified date or the happening of a specified event and any warrants or other rights to subscribe for or purchase any such stock. The foregoing provisions of this Section 2.3(a) shall similarly apply to successive reorganizations, reclassifications, mergers, consolidations or disposition of assets.

Section 2.4. Restrictions on Securities. This Note has been issued by the Maker pursuant to the exemption from registration under the Securities Act of 1933, as amended (the "Act"). None of this Note or the shares of Common Stock issuable upon conversion of this Note may be offered, sold or otherwise transferred unless (i) they first shall have been registered under the Act and applicable state securities laws or (ii) the Maker shall have been furnished with an opinion of legal counsel (in form, substance and scope reasonably acceptable to Maker) to the effect that such sale or transfer is exempt from the registration requirements of the Act. Each certificate for shares of Common Stock issuable upon conversion of this Note that have not been so registered and that have not been sold pursuant to an exemption that permits removal of the applicable legend, shall bear a legend substantially in the following form, as appropriate:

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT"). THE SECURITIES REPRESENTED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS THEY ARE REGISTERED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS, OR SUCH OFFERS, SALES AND TRANSFERS ARE MADE PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THOSE LAWS.

Upon the request of a holder of a certificate representing any shares of Common Stock issuable upon conversion of this Note, the Maker shall remove the foregoing legend from the certificate or issue to such Holder a new certificate free of any transfer legend, if (a) with such request, the Maker shall have received an opinion of counsel, reasonably satisfactory to the Maker in form, substance and scope, to the effect that any such legend may be removed from such certificate or (b) a registration statement under the Act covering such securities is in effect.

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Section 2.5. Reservation of Common Stock.

(a) The Maker covenants that during the period the Note is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of Common Stock of the Maker upon the Conversion of the Note. The Maker further covenants that its issuance of this Note shall constitute full authority to its officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for shares of Common Stock of the Maker issuable upon the conversion of this Note. The Maker will take all such reasonable action as may be necessary to assure that such shares of Common Stock may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the OTC Bulletin Board (or such other principal market upon which the Common Stock of the Maker may be listed or quoted).

(b) The Maker shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Note, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder against impairment. Without limiting the generality of the foregoing, the Maker will (a) not increase the par value of any shares of Common Stock issuable upon the conversion of this Note above the amount payable therefor upon such conversion immediately prior to such increase in par value, (b) take all such action as may be necessary or appropriate in order that the Maker may validly and legally issue fully paid and non-assessable shares of Common Stock upon the conversion of this Note, and (c) use its best efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof as may be necessary to enable the Maker to perform its obligations under this Note.

(c) Upon the request of Holder, the Maker will at any time during the period this Note is outstanding acknowledge in writing, in form reasonably satisfactory to Holder, the continuing validity of this Note and the obligations of the Maker hereunder.

(d) Before taking any action which would cause an adjustment reducing the current Conversion Price below the then par value, if any, of the shares of Common Stock issuable upon conversion of the Notes, the Maker shall take any corporate action which may be necessary in order that the Maker may validly and legally issue fully paid and non-assessable shares of such Common Stock at such adjusted Conversion Price.

(e) Before taking any action which would result in an adjustment in the number of shares of Common Stock into which this Note is convertible or in the Conversion Price, the Maker shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.

(f) If at any time the Maker does not have a sufficient number of authorized and available shares of Common Stock for issuance upon conversion of the Note, then the Maker shall call and hold a special meeting of its stockholders within forty-five (45) days of that time for the sole purpose of increasing the number of authorized shares of Common Stock.

Section 2.6. Maximum Conversion.

The Holder shall not be entitled to convert on a Conversion Date that amount of the Notes in connection with that number of shares of Common Stock which would be in excess of the sum of (i) the number of shares of Common Stock beneficially owned by the Holder and its affiliates on Conversation Date, and (ii) the number of shares of Common Stock issuable upon the conversion of the Notes with respect to which the determination of this provision is being made on a Conversion Date, which would result in beneficial ownership by the Holder and its Affiliates of more than 9.99% of the outstanding shares of Common Stock of the Company on such Conversion Date. For the purposes of the provision to the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended, and Regulation 13d-3 thereunder.

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Section 2.7. Exchange for Qualified Offering Shares.

If, at any time during the term of this Note, Borrower chooses to file an offering under Form 1-A with the Commission ("Reg A Offering") and such is qualified by the Commission, Holder may exchange the Note as subscription payment toward purchase of those shares offered for resale per the Reg A Offering. In the event that Holder elects to exchange the note for purchase of shares from the Reg A Offering, said shares shall be issued free of restrictive legend and will be deemed qualified shares.

ARTICLE III. 

REPRESENTATIONSAND WARRANTIES

Section 3.1. The Holder represents and warrants to the Maker:

(a) The Holder of this Note, by acceptance hereof, agrees that this Note is being acquired for investment and that such Holder will not offer, sell or otherwise dispose of this Note or the Common Stock issuable upon conversion hereof except under circumstances that will not result in a violation of the Act or any application state securities laws or similar laws relating to the sale of securities;

(b) That Holder understands that none of this Note or the Common Stock issuable upon conversion hereof have been registered under the Securities Act of 1933, as amended (the "Act"), in reliance upon the exemptions from the registration provisions of the Act and any continued reliance on such exemption is predicated on the representations of the Holder set forth herein;

(c) Holder (i) has adequate means of providing for his current needs and possible contingencies, (ii) has no need for liquidity in this investment, (iii) is able to bear the substantial economic risks of an investment in this Note for an indefinite period, (iv) at the present time, can afford a complete loss of such investment, and (v) does not have an overall commitment to investments which are not readily marketable that is disproportionate to Holder's net worth, and Holder's investment in this Note will not cause such overall commitment to become excessive;

(d) Holder is an "accredited investor" (as defined in Regulation D promulgated under the Act) and the Holder's total investment in this Note does not exceed 10% of the Holder's net worth; and

(e) Holder recognizes that an investment in the Maker involves significant risks and only investors who can afford the loss of their entire investment should consider investing in the Maker and this Note.

Section 3.2. The Maker represents and warrants to Holder:

Organization and Qualification. The Maker and each of its Subsidiaries (as defined below), if any, is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated, with full power and authority (corporate and other) to own, lease, use and operate its properties and to carry on its business as and where now owned, leased, used, operated and conducted. The Maker and each of its Subsidiaries is duly qualified as a foreign corporation to do business and is in good standing in every jurisdiction in which its ownership or use of property or the nature of the business conducted by it makes such qualification necessary except where the failure to be so qualified or in good standing would not have a Material Adverse Effect. "Material Adverse Effect" means any material adverse effect on the business, operations, assets, financial condition or prospects of the Maker or its Subsidiaries, if any, taken as a whole, or on the transactions contemplated hereby or by the agreements or instruments to be entered into in connection herewith. "Subsidiaries" means any corporation or other organization, whether incorporated or unincorporated, in which the Maker owns, directly or indirectly, any equity or other ownership interest.

21

Authorization; Enforcement. (i) The Maker has all requisite corporate power and authority to enter into and perform this Note and to consummate the transactions contemplated hereby and thereby and to issue the Common Stock, in accordance with the terms hereof, (ii) the execution and delivery of this Note by the Maker and the consummation by it of the transactions contemplated hereby and thereby (including without limitation, the issuance of the Note and the issuance and reservation for issuance of the Common Stock issuable upon conversion or exercise hereof) have been duly authorized by the Maker's Board of Directors and no further consent or authorization of the Maker, its Board of Directors, or its shareholders is required, (iii) this Note has been duly executed and delivered by the Maker by its authorized representative, and such authorized representative is the true and official representative with authority to sign this Note and the other documents executed in connection herewith and bind the Maker accordingly, and (iv) this Note constitutes, a legal, valid and binding obligation of the Maker enforceable against the Maker in accordance with its terms.

Issuance of Shares. The Conversion Shares are duly authorized and reserved for issuance and, upon conversion of the Note in accordance with its respective terms, will be validly issued, fully paid and non-assessable, and free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights or other similar rights of shareholders of the Maker and will not impose personal liability upon the holder thereof.

Acknowledgment of Dilution. The Maker understands and acknowledges the potentially dilutive effect to the Common Stock upon the issuance of the Conversion Shares upon conversion of this Note. The Maker further acknowledges that its obligation to issue Conversion Shares upon conversion of this Note is absolute and unconditional regardless of the dilutive effect that such issuance may have on the ownership interests of other shareholders of the Maker.

ARTICLE IV. 

EVENTS OF DEFAULT

Section 4.1. Default. The following events shall be defaults under this Note: ("Events of Default"):

(a) default in the due and punctual payment of all or any part of any payment of interest or the Principal Amount as and when such amount or such part thereof shall become due and payable hereunder; or

(b) failure on the part of the Maker duly to observe or perform in all material respects any of the covenants or agreements on the part of the Maker contained herein (other than those covered by clause (a) above) for a period of 5 business days after the date on which written notice specifying such failure, stating that such notice is a "Notice of Default" hereunder and demanding that the Maker remedy the same, shall have been given by the Holder by registered or certified mail, return receipt requested, to the Maker; or

(c) any representation, warranty or statement of fact made by the Maker herein when made or deemed to have been made, false or misleading in any material respect; provided, however, that such failure shall not result in an Event of Default to the extent it is corrected by the Maker within a period of 5 business days after the date on which written notice specifying such failure, stating that such notice is a "Notice of Default" hereunder and demanding that the Maker remedy same, shall have been given by the Holder by registered or certified mail, return receipt requested; or

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(d) any of the following actions by the Maker pursuant to or within the meaning title 11, U.S. Code or any similar federal or state law for the relief of debtors (collectively, the "Bankruptcy Law"): (A) commencement of a voluntary case or proceeding, (B) consent to the entry of an order for relief against it in an involuntary case or proceeding, (C) consents to the appointment of a receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law (each, a "Custodian"), of it or for all or substantially all of its property, (D) a general assignment for the benefit of its creditors, or (E) admission in writing its inability to pay its debts as the same become due; or

(e) entry by a court of competent jurisdiction of an order or decree under any Bankruptcy Law that: (A) is for relief against the Maker in an involuntary case, (B) appoints a Custodian of the Maker or for all or substantially all of the property of the Maker, or (C) orders the liquidation of the Maker, and such order or decree remains in stayed and in effect for 60 days.

Section 4.2. Remedies Upon Default. Upon the occurrence of an event of default by Maker under this Note or at any time before default when the Holder reasonably feels insecure, then, in addition to all other rights and remedies at law or in equity, Holder may exercise any one or more of the following rights and remedies:

a. Accelerate the time for payment of all amounts payable under this Note by written notice thereof to Maker, whereupon all such amounts shall be immediately due and payable.

b. Pursue any other rights or remedies available to Holder at law or in equity.

c. Receive Liquidated Damages of $500 per day per Event of Default the Maker is in Default pursuant to this Note.

Section 4.3. Payment of Costs. The Maker shall reimburse the Holder, on demand, for any and all reasonable costs and expenses, including reasonable attorneys' fees and disbursement and court costs, incurred by the Holder in collecting or otherwise enforcing this Note or in attempting to collect or enforce this Note.

Section 4.4. Powers and Remedies Cumulative; Delay or Omission Not Waiver of Default. No right or remedy herein conferred upon or reserved to the Holder is intended to be exclusive of any other right or remedy available to Holder under applicable law, and every such right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy. No delay or omission of the Holder to exercise any right or power accruing upon any Default occurring and continuing as aforesaid shall impair any such right or power or shall be construed to be a waiver of any such Default or an acquiescence therein; and every power and remedy given by this Note or by law may be exercised from time to time, and as often as shall be deemed expedient, by the Holder.

Section 4.5. Waiver of Past Defaults. The Holder may waive any past default or Event of Default hereunder and its consequences but no such waiver shall extend to any subsequent or other default or Event of Default or impair any right consequent thereon.

Section 4.6. Waiver of Presentment etc. The Maker hereby waives presentment, demand, notice, protest and all other demands and notices in connection with the delivery, acceptance, performance and enforcement of this Note, except as specifically provided herein.

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ARTICLE V.

MISCELLANEOUS

Section 5.1. Notices. Any notice herein required or permitted to be given shall be in writing and may be personally served or delivered by courier or sent by United States mail and shall be deemed to have been given upon receipt if personally served (which shall include telephone line facsimile transmission) or sent by courier or three (3) days after being deposited in the United States mail, certified, with postage pre-paid and properly addressed, if sent by mail. For the purposes hereof, the address of the Holder shall be 450 7th Ave. Suite 609, New York, NY 10123; and the address of the Maker shall be 800 W Cummings Park, Suite 200, Woburn, MA 01801. Both the Holder or its assigns and the Maker may change the address for service by delivery of written notice to the other as herein provided.

Section 5.2. Amendment. This Note and any provision hereof may be amended only by an instrument in writing signed by the Maker and the Holder.

Section 5.3. Assignability. This Note shall be binding upon the Maker and its successors and assigns and shall inure to be the benefit of the Holder and its successors and assigns; provided, however, that so long as no Event of Default has occurred, this Note shall only be transferable in whole subject to the restrictions contained in the restrictive legend on the first page of this Note.

Section 5.4. Governing Law. This Note shall be governed by the internal laws of the State of New York, without regard to conflicts of laws principles.

Section 5.5. Replacement of Note. The Maker covenants that upon receipt by the Maker of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Note, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which shall not include the posting of any bond), and upon surrender and cancellation of such Note, if mutilated, the Maker will make and deliver a new Note of like tenor.

Section 5.6. This Note shall not entitle the Holder to any of the rights of a stockholder of the Maker, including without limitation, the right to vote, to receive dividends and other distributions, or to receive any notice of, or to attend, meetings of stockholder or any other proceedings of the Maker, unless and to the extent converted into shares of Common Stock in accordance with the terms hereof.

Section 5.7. Severability. In case any provision of this Note is held by a court of competent jurisdiction to be excessive in scope or otherwise invalid or unenforceable, such provision shall be adjusted rather than voided, if possible, so that it is enforceable to the maximum extent possible, and the validity and enforceability of the remaining provisions of this Note will not in any way be affected or impaired thereby.

Section 5.8. Headings. The headings of the sections of this Note are inserted for convenience only and do not affect the meaning of such section.

Section 5.9. Counterparts. This Note may be executed in multiple counterparts, each of which shall be an original, but all of which shall be deemed to constitute one instrument.

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IN WITNESS WHEREOF, with the intent to be legally bound hereby, the Maker as executed this Note as of the date first written above.

SPO Global I

_________________________________

By: Owen Dukes

Its: CEO

Acknowledged and Agreed:

Blackbridge Capital Growth Fund, LLC.

Docu Signed by:

____________________

By: Alexander Dillon

Its: Managing Partner

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EXHIBIT 1

CONVERSION NOTICE

________________________________________________________

(To be executed by the Holder in order to Convert the Note)

TO:

The undersigned hereby irrevocably elects to convert US$________ of the Principal Amount of the above Note into Shares of Common Stock of SPO Global Inc., according to the conditions stated therein, as of the Conversion Date written below. If shares are to be issued in the name of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering herewith such certificates and opinions as reasonably requested by the Maker in accordance therewith. No fee will be charged to the Holder for any conversion, except for such transfer taxes, if any.

Conversion Date: ____________________________

Applicable Conversion Price: $ __________________

Signature: __________________________________

Name: _____________________________________

Address: __________________________________

Tax I.D. or Soc. Sec. No: _______________________

Principal Amount to be converted:

US$ ______________________

Amount of Note unconverted:

US$ _____________________

Number of shares of Common Stock to be issued: ______________________

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Attach Equity Purchase Agreement Here

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SPO Global Inc.

78 Reade St.

Suite 4FW

New York, NY, 10007

The undersigned, Owen Dukes, is the duly elected Chief Executive Officer of SPO Global Inc., a Delaware corporation (the "Company").

I hereby warrant and represent that I have undertaken a complete and thorough review of the Company's corporate and financial books and records including, but not limited to the Company's records relating to the following:

(A)	the certain convertible note ("Original Note") dated June 23, 2016 (the "Original Note Issuance Date") to Blackbridge Capital Growth Fund, LLC (the "Investor") by the Company in the original principal amount of Twelve Thousand Five Hundred ($12,500.00), and issued pursuant to the Securities Purchase Agreement dated June 23, 2016 is a valid debt and current outstanding obligation of the Company
(B)	the Company's Board of Directors duly approved the issuance of the Original Note to the Blackbridge Capital Growth Fund, LLC.
(C)	the Company's Board of Directors duly approved the terms of the Securities Purchase Agreement between SPO Global Inc. and Blackbridge Capital Growth Fund, LLC, dated June 23, 2016 and of the Original Note that is a fee of that agreement
(D)	The Company's officers and directors have not entered into or given any commitment contemplating the receipt or acceptance of any said consideration arising out of or relating to the issuance of the Original Note.
(E)	To my best knowledge and after completing the aforementioned review of the Company's shareholder and corporate records, I am able to certify that Blackbridge Capital Growth Fund, LLC and its partners and management are not officers, directors, or directly or indirectly, ten percent (10.00%) or more stockholders of the Company and none of said persons have had any such status in the one hundred fifty (150) days immediately preceding the date of this Certificate.
(F)	I understand the constraints imposed under Rule 144 on those persons who are or may be deemed to be "affiliates," as that term is defined in Rule 144(a)(l) of the 1933 Act.
(G)	I understand that all of the representations set forth in this Certificate will be relied upon by counsel to Blackbridge Capital Growth Fund, LLC in connection with the preparation of a legal opinion claiming the exemption provided by Rule 144 of the Securities Act of 1933, as amended.

I hereby affix my signature to this Notarized Certificate and hereby confirm the accuracy of statement.

Date: ____________________________

Signed: __________________________

Name: Owen Dukes

Title: CEO

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UNANIMOUS WRITIEN CONSENT OF DIRECTORS OF SPO GLOBAL INC.

THE UNDERSIGNED, being all the members of the Board of Directors of SPO Global Inc., a Delaware corporation (the "Corporation" ), in order to obviate the necessity of holding a meeting, hereby waive the calling and holding of a meeting of the Board of Directors of the Corporation and approve the following resolutions by unanimous vote of all the members of the Board of Directors of the Corporation, and direct that the same be filed with the records of the Corporation:

WHEREAS, the Corporation is and will be in the future in need of funds and it is in the best interests of this Corporation to allow the issuance of a certain Convertible Note as described herein;

NOW, THEREFORE, BE IT RESOLVED, that the Corporation is authorized to execute Securities Purchase Agreement dated June 23, 2016, authorizing the Regulation A Stock Purchase, as well as the $12,500.00 Convertible Note issued, which comes with registration rights and will be registered in the FORM 1-A Offering Circular as a fee for the Security Purchase Agreement between SPO Global Inc. and Blackbridge Capital LLC.

FURTHER RESOLVED, that the Officer of this Corporation be and hereby is authorized and directed to execute, and to issue a Convertible Promissory Note to Blackbridge Capital Growth Fund, LLC in the principal amount of $12,500.00 in such form, substance and content as may be necessary, said Officer's execution and delivery thereof on behalf of this Corporation to be conclusive evidence of said Officer' s approval; and

FURTHER RESOLVED, that the Officer is hereby authorized to do such further acts and things and execute any and all documents and instruments, both original and amendatory, of every kind and character on behalf of the Corporation as may be necessary or appropriate, in said Officer's judgment, to carry out the terms of the aforementioned Securities Purchase Agreement and Convertible Promissory Note, and carry out the purpose of these Resolutions; and

FURTHER RESOLVED, that any indebtedness heretofore contracted and any contracts, agreements or notes heretofore made with the Purchaser on behalf of this Corporation and all acts of the Officer or of other officers or agents of this Corporation in connection with such indebtedness or such contracts, agreements or notes are hereby ratified and confirmed; and

FURTHER RESOLVED, that the shares of common stock underlying the Note when issued upon conversion of the Note, shall be fully paid, validly issued and non-assessable.

This Unanimous Written Consent of Directors may be executed in any number of counterparts, and it shall not be necessary that the signatures of all Directors be contained on any one counterpart hereof, each counterpart shall be deemed an original, but all of which when taken together shall constitute one and the same instrument.

IN WITNESS WHEREOF, we have caused this instrument to be duly executed this 23rd day of June, 2016.

______________________________, Director

______________________________, Director

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EX1A-2A CHARTER

EXHIBIT 2.1

AMENDMENT 

OF

CERTIFICATE OF INCORPORATION

OF

NU-TECH BIO-MED, INC.

Nu-Tech Bio-Med, Inc., in order to amend its Amended and Restated Certificate of Incorporation (the "Restated Certificate"), hereby certifies as follows:

FIRST: The name of the corporation is NU-TECH BIO-MED, INC.

SECOND: The corporation hereby amends its Certificate of Incorporation as follows:

1. Article FIRST of the Corporation's Restated Certificate is amended to read in its entirety as follow:

"FIRST: The name of the corporation is United Diagnostic, Inc."

B. Article FOURTH of the Corporation's Restated Certificate is hereby amended to provide for deletion of existing Paragraph 2 and replacing it with a new paragraph 2, which provides for a 1-for-70 reverse split of the Corporation's Common Stock, par value $.01 per share, that will read in its entirety as follows:

"2. Reverse Stock Split. Upon the filing of this Amendment with the Secretary of State of Delaware, and effective as of 5:00 p.m. on the date of filing (referred to herein as the "Effective Time"), every 70 shares of Common Stock issued and outstanding as of the Effective Time shall automatically, and without any action on the part of the stockholders, be converted and combined into one share of validly issued, fully payable and non-assessable share of Common Stock, par value $.01 (the "Reverse Split"). In the case of a holder of shares not evenly divisible by 70, such holder shall receive, in lieu of any fraction of a share, a cash payment equal to the average of the last sale price of the Common Stock, as obtained by the Company from a national quotation service or such other source as the Company deems reasonable, on the five trading days ending on the day of the Effective Time multiplied by that number of shares of Common Stock that would otherwise have been converted into such fraction of a share. As of the Effective Time and thereafter, a certificate(s) representing shares of Common Stock prior to the Reverse Split shall be deemed to represent the number of new shares into which the old shares are convertible and the right to recover a cash payment in lieu of fractional shares."

THIRD: The amendments effected hereby were authorized by the written consent of the holders of a majority of all of the outstanding shares entitled to consent thereto pursuant to Sections 228 and 242 of the General Corporation Law of the State of Delaware.

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IN WITNESS WHEREOF, the undersigned hereby execute this document and affirm the facts set forth herein are true under penalties of perjury this _____ day of December 1998.

/s/ J. Marvin Feigenbaum

J. Marvin Feigenbaum

President

/s/ David Sterling

David Sterling,

Secretary

2

EX1A-2A CHARTER

EXHIBIT 2.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EX1A-2A CHARTER

EXHIBIT 2.3

 

 

 

EX1A-2B BYLAWS

EXHIBIT 2.4

BY-LAWS

of 

SPO Medical Inc. 

(a Delaware corporation)

Article I

Offices

1.1 The Board of Directors (the "Board") of the corporation shall fix the location of the principal executive office of the corporation at any place within or outside the State of Delaware.

1.2 The Board may at any time establish branch or subordinate offices at any place or places.

Article II

Meetings of Stockholders

2.1 All meetings of the stockholders for the election of directors shall be held at the principal office of the corporation , at such place as may be fixed from time to time by the Board or at such other place either within or without the State of Delaware as shall be designated from time to time by the Board and stated in the notice of the meeting. Meetings of stockholders for any other purpose may be held at such time and place, within or without the State of Delaware, as shall be stated in the notice of the meeting or in a duly executed waiver of notice thereof.

2.2 Annual Meeting. Annual meetings of stockholders shall be held at such other date and time as shall be designated from time to time by the Board and stated in the notice of the meeting, at which they shall elect by a Board, and transact such other business as may properly be brought before the meetings.

2.3  Special Meetings. Special meetings of the stockholders may be called for any purpose or purposes, unless otherwise prescribed by statute or by the Certificate of Incorporation, at the request of the Board, the Chairman of the Board, the President or the stockholders owning a majority in amount of the entire capital stock of the corporation issued and outstanding and entitled to vote. Such request shall state the purpose or purposes of the meeting.

2.4  Notice of Meetings. Written notice of stockholders' meetings, stating the place, date and time of the meeting and the purpose or purposes for which the meeting is called, shall be given to each stockholder entitled to vote at such meeting on not less than ten (10) nor more than sixty (60) days prior to the meeting.

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When a meeting is adjourned to another place, date or time, written notice need not be furnished of the adjourned meeting if the place, date and time thereof are announced at the meeting at which the adjournment is taken, provided, however, that if the date of any adjourned meeting is more than thirty (30) days after the date for which the meeting was originally noticed, or if a new record date is fixed for the adjourned meeting, written notice of the place, date and time of the adjourned meeting shall be furnished in conformity herewith. At any adjourned meeting, any business may be transacted which might have been transacted at the original meeting.

2.5 Business Matter of a Special Meeting. Business transacted at a special meeting of stockholders shall be limited to the purposes stated in the notice.

2.6 List of Stockholders. The officer who has charge of the stock ledger of the corporation shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place, if other than the place of the meeting, shall be specified in the notice of the meeting. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.

2.7 Organization and Conduct of Business. The Chairman of the Board, or in his or her absence, the President of the corporation or, in their absence, such person as the Board may have designated or, in the absence of such person, such person as may be chosen by the holders of a majority of the shares entitled to vote who are present, in person or by proxy, shall call to order any meeting of the stockholders and act as Chairman of the meeting. In the absence of the Secretary of the corporation, the Secretary of the meeting shall be such person as the Chairman appoints.

The chairman of any meeting of the stockholders shall determine the order of the business and the procedure at the meeting, including such regulation of the manner of voting and the conduct of the discussion as seems to him or her in order.

2.8 Quorum and Adjournments. Except where otherwise provided by law or by the Certificate of Incorporation or these By-Laws, the holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders. The stockholders present at a duly called or held meeting at which a quorum is present may continue to do business until adjournment, notwithstanding the withdrawal of enough stockholders to have less than a quorum if any action taken (other than adjournment) is approved by at least a majority of the shares required to constitute a quorum. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented.

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2.9 Voting Rights. Unless otherwise provided in the Certificate of Incorporation, each stockholder shall at every meeting of the stockholders be entitled to one vote in person or by proxy for each share of the capital stock having voting power held by such stockholder.

2.10 Majority Vote. When a quorum is present at any meeting, the vote of the holders of a majority of the stock having voting power present in person or represented by proxy shall decide any question brought before such meeting, unless the question is one upon which by express provision of the statutes or the Certificate of Incorporation or these By-Laws, a different vote is required in which case such express provision shall govern and control the decision of such question.

2.11 Record Date for Stockholder Notice and Meeting. For purposes of determining the stockholders entitled to notice of any meeting or to vote, or entitled to receive payment of any divided or other distribution, or entitled to exercise any right in respect of any change, conversion or exchange of stock for the purpose of any other lawful action, the Board may fix, in advance, a record date, which shall not be more than sixty (60) nor less than ten (10) days before any other action.

If the Board does not fix a record date, the record date of determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the business day next preceding the day on which notice is given or, if notice is waived, at the close of the business on the business day next preceding the day on which the meeting is held.

2.12 Proxies. Every person entitled to vote for directors or any other matter shall have the right to do so either in person or by one or more agents authorized by written proxy signed by the person and filed with the Secretary of the corporation. A proxy shall be deemed signed if the stockholder's name is placed on the proxy (whether by manual signature, typewriting, telecopier transmission or otherwise) by the stockholder or the stockholder's attorney-in-fact. A validly executed proxy which does not state that it is irrevocable shall continue in full force and effect unless (i) revoked by the person executing it before the vote pursuant to that proxy, by a writing delivered to the corporation stating that such proxy is revoked or by a subsequent proxy executed by, or attendance at the meeting and voting in person by, the person executing the proxy; or (ii) written notice of the death or incapacity of the maker of the proxy is received by the corporation before the vote pursuant to that proxy is counted; provided, however, that no proxy shall be valid after the expiration of eleven months from the date of the proxy, unless otherwise provided in the proxy.

2.13 Action Without a Meeting by Written Consent. Except for the removal of a director, all actions required to be taken at any annual or special meeting of stockholders of the corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take that action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the corporation by delivery to its registered office, its principal place of business, or an officer of the corporation having custody of the book in which proceedings of meetings of stockholders are recorded.

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Article III

Directors

3.1 Number; Qualification. The number of directors shall be determined from time to time by resolution of the Board and the initial Board shall consist of three (3) directors. All directors shall be elected et the annual meeting or any special meeting of the stockholders, except as provided in Section 3.2 of this Article, and each director so elected shall hold office until his successor is elected and qualified or until his earlier resignation or removal. Directors need not be stockholders.

3.2 Resignation and Vacancies. A vacancy or vacancies in the Board shall be deemed to exist in the case of the death, resignation or removal of any director, or if the authorized number of directors be increased. Vacancies may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director, unless otherwise provided in the Certificate of Incorporation. If the Board accepts the resignation of a director tendered to take effect at a future time, the Board shall have the power to elect a successor to take office when the resignation is to become effective. If there are no directors in office, then an election of the directors may be held in the manner provided by law.

3.3 Removal of Directors. Unless otherwise restricted by statute, the Certificate of Incorporation or these By-Laws, any director or the entire board of directors may be removed, with or without cause, by the holders of a majority of shares entitled to vote at an election of directors at the annual meeting or any special meeting of the stockholders. In addition, an employee-director whose employment with the Company is terminated for whatsoever reason shall, automatically and without any further action, cease to be a director.

3.4 Powers. The business of the corporation shall be managed by or under the direction of its board of directors which may exercise all such powers of the corporation and do all such lawful acts and things as are not by statute or by the Certificate of Incorporation or by these By-Laws directed or required to be exercised or done by the stockholders.

Without prejudice to these general powers, and subject to the same limitations, the directors shall have the power to

(a) Select and remove all officers, agents and employees of the corporation; prescribe any powers and duties for them that are consistent with law, with the Certificate of Incorporation and with these By-Laws; fix their compensation; and require from them security for faithful service;

(b) Confer upon any office the power to appoint, remove and suspend subordinate officers, employees and agents;     

 

4

 

(c ) Change the location of the principal executive office or the principal business office; cause the corporation to be qualified to do business in any state, territory, dependency or country and conduct business within or without the State of Delaware for the holding of any stockholder meetings, including annual meetings;

(d) Adopt, make and use a corporate seal; prescribe the forms of certificate of stock; and alter the form of the seal and certificate;

(e) Authorize the issuance of shares of stock of the corporation on any lawful terms, in consideration of money paid, labor done, service actually rendered, debt or securities canceled, tangible or intangible property actually received;

(f) Borrow money and incur indebtedness on behalf of the corporation, and cause to be executed and delivered for the corporation's purposes, in the corporate name, promissory notes, bonds, debentures, deeds of trust, mortgages, pledges, hypothecation and other evidences of debt and securities;

(g) Declare dividends from time to time in accordance with law;

(h) Adopt from time to time such stock option, stock purchase, bonus or other compensation plans for directors, officers, employees and agents of the corporation and its subsidiaries as it may determine; and

(i) Adopt from time to time regulations not inconsistent with these By-Laws for the management of the corporation's business and affairs.

3.5 Place of Meetings. The Board may hold meetings, both regular and special, either within or without the State of Delaware.

3.6 Annual Meetings. The annual meeting of the Board shall be held immediately following the annual meeting of the stockholders and no notice of such meeting shall be necessary to the Board, provided, a quorum shall be present. The annual meeting shall be the purposes of organization, and an election of officers and the transaction of other business.

3.7 Regular Meetings. Regular meetings of the Board may be held without notice at such time and at such place as shall from time to time be determined by the Board.

3.8 Special Meetings. Special meetings of the Board may be called by the Chairman of the Board, the President, a Vice-President or a majority of the Board upon one (1) day's notice to each director.

3.9 Quorum and Adjournments. At all meetings of the Board, a majority of the directors shall constitute a quorum for the transaction of business and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board, except as may be otherwise specifically provided by statute or by the Certificate of Incorporation. If a quorum is not present at any meeting of the Board, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present. A meeting at which a quorum is initially present may continue to transact business notwithstanding the withdrawal of directors, if any action is approved by at least a majority of the required quorum for that meeting.

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3.10 Action Without a Meeting. Unless otherwise restricted by the Certificate of incorporation or these By-Laws, any action required or permitted to be taken at any meeting of the Board or of any committee thereof may be taken without a meeting, if all members of the Board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the board or committee.

3.11 Telephone Meetings. Unless otherwise restricted by the Certificate of Incorporation or these by-laws, members of the Board, or any committee designated by the Board, may participate in a meeting of the Board, or any committee, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting.

3.12 Waiver of Notice. Notice of a meeting need not be given to any director who signs a waiver of notice or a consent to holding the meeting or an approval of the minutes thereof, whether before or after the meeting, or who attends the meeting without protesting, prior thereto or its commencement. Al such waivers, consents and approvals shall be filed with the corporate records or made a part of the minutes of the meeting.

3.13 Fees and Compensation of Directors. Unless otherwise restricted by the Certificate of Incorporation or these By-Laws, the Board shall have the authority to fix the compensation of directors. The directors may be paid their expenses, if any, of attendance at each meeting of the Board and may be paid a fixed for attendance at each meeting of the Board or a stated salary as director. No such payment shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed like compensation for attending committee meetings.

3.14 Rights of Inspection. Every director shall have the absolute right at any reasonable time to inspect and copy all books, records and documents of every kind and to inspect the physical properties of the corporation and also of its subsidiary corporations, domestic or foreign. Such inspection by a director may be made in person or by agent or attorney and includes the right to copy and obtain abstracts.

Article IV

Committees of Directors

4.1 Selection. The Board may, by resolution passed by a majority of the entire board, designate one or more committees, each committee to consist of one or more of the directors of the corporation. The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee.

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In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or she or they constitute a quorum, may unanimously appoint another member of the Board to act at the meeting in the place of any such absent or disqualified member.

4.2 Powers. Any such committee, to the extent provided in the resolution of the Board, shall have and may exercise all the powers and authority of the directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to amending the Certificate of Incorporation, (except that a committee may, to the extent authorized in the resolution or resolutions providing for the issuance of shares of stock adopted by the board of directors as provided in Section 151(a) of the General Corporation Law of Delaware, fix any of the preferences or rights of such shares relating to dividends, redemption, dissolution, any distribution of assets of the corporation or the conversion into, or the exchange of such shares for, shares of any other class or classes or any other series of the same or any other class or classes of stock of the corporation), adopting an agreement of merger or consolidation, recommending to the stockholders the sale, lease or exchange of all or substantially all of the corporation's property and assets, recommending to the stockholders a dissolution of the corporation or a revocation of a dissolution, or amending the By-Laws of the corporation; and, unless the resolution or the Certificate of Incorporation expressly so provide, no such committee shall have the power or authority to declare a dividend or to authorize the issuance of stock or to adopt a certificate of ownership and merger. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the Board.

4.3 Committee Minutes. Each committee shall keep regular minutes of its meetings and report the same to the Board when required.

Article V

Officers

5.1 Officers Designated. The officers of the corporation shall be chosen by the Board and shall be a President, a Chief Executive Officer, a Secretary and a Treasurer. The Board may also choose a Chairman of the Board, one or more vice-presidents, and one or more assistant Secretaries and Treasurers. Any number of offices may be held by the same person, unless the Certificate of Incorporation or these By-Laws otherwise provide.

5.2 Appointment of Officers. The Officers of the corporation, except such officers as may be appointed in accordance with the provisions of Section 5.3 or

5.5 of this Article, shall be appointed by the Board, and each shall serve at the pleasure of the Board, subject to the rights, if any, of an officer under any contract of employment.

5.3 Subordinate Officers. The Board may appoint, and may empower the President to appoint, such other officers and agents as the business of the corporation may require, each of whom shall hold for such period, have such authority and perform such duties as are provided in the By-Laws or as the Board may from time to time determine.

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5.4 Removal and Resignation of Officers. Subject to the rights, if any, of any officer under any contract or employment, any officer may be removed, either with or without cause, by an affirmative vote of the majority of the Board, at a special meeting of the Board, or, except in the case of an officer chosen by the Board, by any officer upon whom power of removal may be conferred by the Board.

Any officer may resign at any time by giving written notice to the corporation. Any resignation shall take effect at the date of the receipt of notice or at any later time specified in that notice; and, unless otherwise specified in that notice, the acceptance of the resignation shall not be necessary to make it effective. Any resignation is without prejudice to the rights, if any, of the corporation under any contract to which the officer is a party.

5.5 Vacancies in Office. A vacancy in any office because of death, resignation, removal, disqualification or any other cause shall be filled in the manner prescribed in these By-Laws for regular appointment to that office.

5.6 Compensation. The salaries of all officers of the corporation shall be fixed from time to time by the Board and no officer shall be prevented from receiving a salary because he or she is also a director of the corporation.

5.7 Chairman of the Board. The Chairman of the Board, if such an officer be elected, shall, if present, perform such other powers and duties as may be assigned to him from time to time by the Board.

5.8 The President. Subject to such supervisory powers, if any, as may be given to the Chairman of the Board, if there be such an officer, the President or the Chief Executive Officer of the corporation, as the Board shall decide, shall preside at all meetings of the stockholders and the Board, shall have general and active management of the business of the corporation and shall see that all orders and resolutions of the board of directors are carried into effect. The President shall execute bonds, mortgages and other contracts requiring a seal, under the seal of the corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the Board to some other officer or agent of the corporation.

5.9 The Vice President. The Vice-President (or in the event there be more than one vice-president, the vice-presidents in the order designated by the directors, or in the absence of any designation, then in the order of their election) shall, in the absence of the President or in the event of his disability or refusal to act, perform the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President. The vice-presidents shall perform such other duties and have such other powers as may from time to time be prescribed for them by the Board, the President, the Chairman of the Board or these By-Laws.

5.10 The Secretary. The Secretary shall attend all meetings of the Board and all meetings of the stockholders and record all the proceedings of the meetings of the corporation and of the Board in a book to be kept for that purpose and shall perform like duties for the standing committee when required. The Secretary shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the Board, and shall perform such other duties as may be prescribed by the Board, the Chairman of the Board or the President, under whose supervision he or she shall act. The Secretary shall have custody of the corporate seal of the corporation and he or she, or an assistant secretary, shall have authority to affix the same to any instrument requiring it, and when so affixed, the seal may be attested by his or her signature or by the signature of such assistant secretary. The Secretary shall keep, or cause to be kept, at the principal executive office or at the office of the corporation's transfer agent or registrar, as determined by a resolution of the Board, a share register, or a duplicate share register, showing the names of all the stockholders and their addresses, the number and classes of shares held by each, the number and date of the certificates issued for the same and the number and date of cancellation of every certificate surrendered for cancellation.

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5.11 The Assistant Secretary. The assistant Secretary, or if there be more than one, the assistant secretaries in the order determined by the Board (or if there be no such determination, then in the order of their election) shall, in the absence of the Secretary or in the event of his or her inability or refusal to act, perform the duties and exercise the powers of the Secretary and shall perform such other duties and have such other powers as the Board may from time to time prescribe.

5.12 The Treasurer. The Treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the corporation in such depositories as may be designated by the Board. The Secretary shall disburse the funds of the corporation as may be ordered by the Board, taking proper vouchers for such disbursements, and shall render to the President and the Board, at its regular meetings, or when the Board so requires, an account of all his or her transactions as Treasurer and of the financial condition of the corporation.

5.13 The Assistant Treasurer. The assistant Treasurer, or if there shall be more than one, the assistant Treasurers in the order determined by the Board (or if there be no such determination, then in the order of their election) shall, in the absence of the Treasurer or in the event of his or her inability or refusal to act, perform the duties and exercise the powers of the Treasurer and shall perform such other duties and have such other powers as the board of directors may from time to time prescribe.

Article VI

Certificates for Shares

6.1 Certificates for Shares. The shares of the corporation shall be represented by a certificate or shall be uncertificated. Certificates shall be signed by, or in the name of the corporation by, the Chairman of the board of directors, or the President or a Vice-President, and by the Treasurer or an assistant Treasure, or the Secretary or an assistant Secretary of the corporation.

Within a reasonable time after the issuance or transfer of uncertificated stock, the corporation shall send to the registered owner thereof a written notice containing the information required by the General Corporation Law of the State of Delaware or a statement that the corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights.

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6.2 Signature on Certificates. Any of or all the signatures on a certificate may be facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue.

6.3 Transfer of Stock. Upon surrender to the corporation or the transfer agent of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignation or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books. Upon receipt of proper transfer instructions from the registered owner of uncertificated shares such uncertificated shares shall be cancelled and issuance of new equivalent uncertificated shares or certificated shares shall be made to the person entitled thereto and the transaction shall be recorded upon the books of the corporation.

6.4 Registered Stockholders. The corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividend, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware.

6.5 Record Date. In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board may fix, in advance, a record date, which shall not be more than sixty (60) nor less than ten (10) days before the date of such meeting, nor more than sixty (60) days prior to any other action. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting: provided, however, that the Board may fix a new record date for the adjourned meeting.

6.6 Lost Certificates. The Board may direct a new certificate or certificates be issued to replace any certificate or certificates theretofore issued by the corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that face by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such isue of a new certificate or certificates or uncertificated shares, the Board may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates, or his legal representative, to advertise the same in such manner as it shall require and/or to give the corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificate alleged to have been lost, stolen or destroyed.

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Article VII

Notices

7.1 Notices. Whenever, under the provisions of the statutes or the Certificate of Incorporation or these By-Laws, notice is required to be given to any director or stockholder it shall be construed to mean personal notice, but such notice may be given in writing, by mail, addressed to such director or stockholder, at his or her address as it appears on the records of the corporation, with the postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail. Notice to directors may also be given by telegram, telephone or facsimile.

7.2 Waiver. Whenever any notice is required to be given under the provisions of the statutes or the Certificate of Incorporation or these By-Laws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto.

Article VIII

General Provision

8.1 Dividends. Dividends upon the capital stock of the corporation, subject to the provisions of the Certificate of Incorporation, if any, may be declared by the Board at any regular or special meeting, pursuant to law. Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the Certificate of Incorporation.

8.2 Dividend Reserve. Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or for such other purpose as the directors shall think conductive to the interests of the corporation, and the directors may modify or abolish any such reserve in the manner in which it was created.

8.3 Annual Statement. The Board shall present at each annual meeting, and at any special meeting of the stockholders when called for by vote of the stockholders, a full and clear statement of the business and condition of the corporation.

8.4 Checks. All checks or demands for money and notes of the corporation shall be signed by such officer or officers or such other person or persons as the Board may from time to time designate.

8.5 Corporate Seal. The Board shall provide a suitable corporate seal, containing the name of the corporation, which seal shall be in the care of the Secretary.

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8.6  Execution of Corporate Contracts and Instruments. The Board, except as otherwise provided in these By-Laws, may authorize any officer, or agent or agents, to enter into any contract or execute any instrument in the name of and on behalf of the corporation; such authority may be general or confined to specific instances. Unless so authorized or ratified by the Board or within the agency power of an officer, no officer or agent shall have any power or authority to bind the corporation by any contract or engagement or to pledge its credit or to render it liable for any purpose or for any amount.

Article IX

Indemnification of Directors, Officers and Employees

Except to the extent expressly prohibited by the Delaware Corporation Law, the corporation shall indemnify each person made or threatened to be made a party to any action or proceeding, whether civil or criminal, by reason of the fact that such person or such person's testator or intestate is or was a director, officer or employee of the corporation, or serves or served at the request of the corporation, any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise in any capacity, against judgment, fines, penalties, amounts paid in settlement and reasonable expenses, including attorneys' fees, incurred in connection with such action or proceeding, or any appeal therein, provided that no such indemnification shall be made if a judgment or other final adjudication adverse to such person establishes that his or her acts were committed in bad faith or were the result of active and deliberate dishonesty and were material to the cause of action so adjudicated, or that he or she personally gained in fact a financial profit or other advantage to which he or she was not legally entitled, and provided further that no such indemnification shall be required with respect to any settlement or other nonadjudicated disposition of any threatened or pending action or proceeding unless the corporation has given its prior consent to such settlement or other disposition

The corporation may advance or promptly reimburse upon request any person entitled to indemnification hereunder for all expenses, including attorneys' fees, reasonably incurred in defending any action or proceeding in advance of the final disposition thereof upon receipt of an undertaking by or on behalf of such person to repay such amount if such person is ultimately found not to be entitled to indemnification or, where indemnification is granted, to the extent the expenses so advanced or reimbursed exceed the amount to which such person is entitled, provided, however, that such person shall cooperate in good faith with any request by the corporation that common counsel be utilized by the parties to an action or proceeding who are similarly situated unless to do so would be inappropriate due to actual or potential differing interests between or among such parties.

Nothing herein shall limit or affect any right of any person otherwise than hereunder to indemnification or expenses, including attorneys' fees, under any statute, rule, regulation, certificate of incorporation, by-law, insurance policy, contract or otherwise.

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Anything in these by-laws to the contrary notwithstanding, no elimination of this by-law, and no amendment of this by-law adversely affecting the right of any person to indemnification or advancement of expenses hereunder shall be effective until the 60th day following notice to such person or such action, and no elimination of or amendment to this by-law shall deprive any person of his or her rights hereunder arising out of alleged or actual occurrences, acts or failures to act prior to such 60th day.

The corporation shall not, except by elimination or amendment of this by-law in a manner consistent with the preceding paragraph, take any corporate action or enter into any agreement which prohibits, or otherwise limits the rights of any person to, indemnification in accordance with the provisions of this by-law. The indemnification of any person provided by this by-law shall continue after such person has ceased to be a director, officer or employee of the corporation and shall inure to the benefit of such person's heirs, executors, administrators and legal representatives.

The corporation is authorized to enter into agreements with any of its directors, officers or employees extending rights to indemnification and advancement of expenses to such person to the fullest extent permitted by applicable law, but the failure to enter into any such agreement shall not affect or limit the rights of such person pursuant to this by-law, it being expressly recognized hereby that all directors, officers and employees of the corporation, by serving as such after the adoption hereof, are acting in reliance hereon and that the corporation is estopped to contend otherwise.

In case any provision in this by-law shall be determined at any time to be unenforceable in any respect, the other provisions shall not in any way be affected or impaired thereby, and the affected provision shall be given the fullest possible enforcement in the circumstances, it being the intention of the corporation to afford indemnification and advancement of expenses to its directors, officers and employees, acting in such capacities or in the other capacities mentioned herein, to the fullest extent permitted by law.

For purposes of this by-law, the corporation shall be deemed to have requested a person to serve an employee benefit plan where the performance by such person of his or her duties to the corporation also beneficiaries of the plan, and excise taxes assessed on a person with respect to an employee benefit plan pursuant to applicable law shall be considered indemnifiable expenses. For purposes of this by-law, the term "corporation" shall include any legal successor to the corporation, including any corporation which acquires all or substantially all of the assets of the corporation in one or more transactions.

Article X

Amendments

In addition to the right of the stockholders of the corporation to make, alter, amend, change, add to or repeal the By-Laws of the corporation, the Board shall have the power (without the assent or vote of the stockholders) to make, alter, amend, change add to or repeal the By-laws of the corporation.

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EX1A-3 HLDRS RTS

EXHIBIT 3.1

 

 

 

 

 

EX1A-6 MAT CTRCT

EXHIBIT 6.1

This MASTER LICENSE AGREEMENT is made as of December 22, 2015,

BETWEEN

SPO Global Inc., a Delaware company, and its wholly owned subsidiary SPO Medical Equipment Ltd., an Israeli company (jointly the “Licensor”);

‘and’

Michael Braunold (the “Licensee”).

WHEREAS

The Licensor is the exclusive legal owner of all rights, title and interest in the IP and SPO Technology as defined below, and;

The Licensor has agreed to grant to Licensee, an exclusive license in relation to the IP and SPO Technology on the terms and conditions set out in this Agreement.

IT IS AGREED as follows:

1. Interpretation

In this Agreement the following expressions shall have the following meanings: “Agreement” means this Master License Agreement including its Schedules.

“SPO Technology” means any and all currently existing software, hardware, technology, networks, systems, equipment, know-how, algorithms, information, data, procedures, techniques, solutions, and work-arounds contained or which form part of the Licensor’s product or in a technology, technique or process, owned by or licensed to Licensor or to an affiliate of Licensor - and all Derivatives thereof, which includes but is not limited to the products set forth in Schedule 1 hereof.

“Derivatives” - shall mean:

For copyrightable or copyrighted material, any translation, abridgement, revision or other form in which an existing work may be recast, transformed or adapted; For patentable or patented material, any improvement thereon; and For material which is protected by trade secret, any new material derived from such existing trade secret material, including new material which may be protected by copyright, patent and/or trade secret.

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“Effective Date” means the date of signing of this Agreement as indicated on the top of this page.

“Intellectual Property Rights” (IP) means all currently exisiting patents, (including without limitation all renewals and extensions thereof), registrations and applications for registration of patents (including without limitation continuations, continuations-in-part, reissues and extensions thereof), applications for patent (including without limitation divisions thereof), trade- marks, trade-names, copyrights, trade secrets and all other intellectual property rights, whether now existing or hereafter created, developed, arising or otherwise coming into being, that relate to or cover any part of SPO Technology, or part thereof, including without limitation any intellectual property rights that could be violated, infringed or misappropriated by any copying, manufacture, use, performance, distribution or other exploitation of the SPO Technology or part thereof. Without limiting the generality of the above, current patents and applications include but is not limited to those set forth in Schedule 1 hereof.

“Territory” means worldwide.

“Term” means the duration of this Agreement as specified in Section 6.

2. Grant of License

Subject to the terms and conditions of this Agreement, the Licensor hereby grants to the Licensee an exclusive, perpetual, assignable and royalty free license (for the avoidance of doubt the exclusivity also applies against the Licensor) for the Permitted Use (as defined below) of the SPO Technology and IP in the Territory during the Term, with the right to grant sub-licenses (the “License”).

Notwithstanding the above the License is non exclusive with respect to the trade names ‘SPO’ and “SPO Global’.

3. Permitted Use

3.1 The Licensee is entitled under the License, in the Territory during the Term, to use and exploit the IP and SPO Technology under this Agreement for any use and purpose whatsoever (the “Permitted Use”).

3.2 Licensee is permitted to improve, enhance, modify, adapt, or further develop the IP. Licensee shall become the sole owner of all IP in any such improvements, enhancements, modifications, adaptations or further developments of the IP (“New Works”).

3.3 The Licensee shall use the IP and SPO Technology in conformity with all applicable laws, regulations, industry requirements, and standards in force within the Territory.

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4. Consideration

In consideration of the grant of the License the License hereby waives all claims to monies currently owed to Licensee by the Licensor.

5. No Warranty & Limitation of Damages

5.1 DISCLAIMER. LICENSOR’S EXPRESSLY DISCLAIMS ALL WARRANTIES RELATING TO THE SPO TECHNOLOGY, WHETHER EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE, INCLUDING BUT NOT LIMITED TO ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

5.2 Neither Party will be liable for any indirect, punitive, special, incidental or consequential damages in connection with or arising out of this agreement, or any loss of business, revenue, profits, use, data or other economic advantage, however it arises, whether in contract or tort, even if that Party has been previously advised of the possibility of such damage.

6. Duration of Agreement

This Agreement commences on the Effective Date and continues indefinitely. The Licensee is entitled to terminate this Agreement upon notice to the Licensor.

7. Maintenance and protection of IP

7.1 Licensor shall have no duty or liability with respect to the IP, and Licensee hereby agrees that it shall be solely responsible for and that it fully assumes any and all obligations and costs, including with respect to taking all steps to maintain and renew registrations for the IP in the Territory.

7.2 Licensee has the right to take any and all steps, including legal court action, to ensure that the IP is protected throughout the Territory during the Term of this Agreement including (but not limited to ) where there is:

(a) any actual, suspected or threatened infringement of the IP;

(b) any allegation or complaint made by any third party that any of the IP is invalid or that use of the IP infringes any third party rights; and

(c) any other form of attack or claim to which any of the IP may be subject.

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7.4 Licensee may at its sole discretion claim against infringing third parties for its own loss of profit, damages, costs and legal fees.

7.5 Licensor hereby grants Licensee an irrevocable power of attorney to execute any act on behalf of Licensor in order for Licensee to exercise its rights herein, provided however, Licensee shall have no authority to take any action on behalf of Licensor which would, or could, result in Licensor being legally obligated for the payment of any sums or the taking of any actions with respect to the IP, and should any such liability be incurred, Licensee shall defend and indemnify Licensor to the fullest extent permitted by law.

8. Assignment

Licensee may assign any or all of its rights or obligations under this Agreement, or grant, declare, create or dispose of any right or interest in it, or sub-contract the performance of any of its obligations under this Agreement to a third party without the prior written approval of Licensor.

9. Notices

Any notice or other communication to be given by a party under this Agreement shall be in writing and shall be served by sending it by fax to the number set out below, or delivering it by hand or sending it by registered post or e-mail to the addresses set out below. The addresses and fax numbers of the parties for the purpose of this Section are as follows:

Licensor:

SPO Global, Inc.

Attn: President

with a copy to:

Kimberly L. Rudge, PA

4654 SR 64 E, #133

Bradenton, Fl. 34208

Licensee:

Gerald Brounstein

Email: GBrounstein@PearlCohen.com

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10. General

10.1 No failure or delay by either party in exercising any right or remedy provided by law under or pursuant to this Agreement shall impair such right or remedy or operate or be construed as a waiver or variation of it or preclude its exercise at any subsequent time and no single or partial exercise of any such right or remedy shall preclude any other or further exercise of it or the exercise of any other right or remedy.

10.2 No variation of this Agreement shall be valid unless it is in writing and signed by or on behalf of authorised representatives of all parties.

10.3 If and to the extent any provision of this Agreement is held to be illegal, void or unenforceable, such provision shall be given no effect and shall be deemed not to be included in this Agreement but without invalidating any of the remaining provisions of this Agreement.

10.4 This Agreement sets out the entire agreement and understanding between the parties in respect of the subject matter of this Agreement. The general terms and conditions of either party shall not form part of this Agreement and do not apply.

10.5 This Agreement may be executed in any number of counterparts and by the parties to it on separate counterparts, each of which is an original but all of which together constitute one and the same instrument.

10.6 This Agreement shall be exclusively governed by and construed in accordance with the law of the State of Delaware. Each party irrevocably agrees to submit to the exclusive jurisdiction of the courts of the State of Delaware.

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EXECUTED by: SPO Global Inc.
Name:	Sidney Braun
Position:	Director
SPO Medical Equipment Ltd.
Name:	Michael Braunold
Title:	CEO
Michael Braunold

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Schedule 1

Products & Patents

Products and trade names:

PulseOx 5500

PulseOx 6000

PulseOx 6100

PulseOx 7500 CheckMate

ReliOn (Private label) HoMedics (Private label) SPO

SPO Medical SPO Global SPO Baby SPO Security SPO Wellness

Patents and Applications list:

SPO File Number	Application Date	Application Num.	REGISTED Date	PATENT Number
PATENTS
SP2-2250-US	12-Dec-01	09/831,944	28-Feb-06	7,006,855
SP1-2584-US2	6-Dec-06	11/567,230	15-Sep-09	7,590,438
SP1-2585-US3	6-Dec-06	11/567,232	3-Nov-09	7,613,490
SP1-2586-US4	6-Dec-06	11/567,237	13-Oct-09	7,606,607
SP1-2589-US5	6-Dec-06	11/609,957	13-Oct-09	7,603,152
SP1-2590-US6	6-Dec-06	11/612,641	19-Jan-10	7,650,176
SP1-2244-CA	11-Jun-98	CA 2334964	24-Mar-09	2,334,964
SP2-2664-GB		EP 168694		1,139,865
SP1-2247-US	1-Feb-00	09/147,683	22-Apr-03	6,553,242
SP1-2248-US	18-Mar-03	10/390,169	30-Jan-07	7,171,251
SP2-2538-US1	8-Dec-05	11/296,389	15-Apr-08	7,359,741
SP-2246-IL	15-Jun-97	ISL 121079	24-Apr-05	121,079
APPLICATION
SP6-2814-US	17-Feb-11	13/029,420
SP5-2805-US	26-Jun-12	13/512,601

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EX1A-12 OPN CNSL

EXHIBIT 12.1

1000 Fifth Street	PO Box 5025
Suite 200 – P2	Asheville, NC 28813
Miami Beach, FL 33139	Phone: 786.273.9152 www.eilerslawgroup.com

January 6, 2017

Gentlemen:

We are acting as counsel to SPO Global, Inc. (the “Company”) in connection with the preparation and filing with the Securities and Exchange Commission, under the Securities Act of 1933, as amended, of the Company’s Offering Statement on Form 1-A. The Offering Statement covers $500,000 of the Company’s common stock at a price to be determined (the “Shares”).

In our capacity as such counsel, we have examined and relied upon the originals or copies certified or otherwise identified to our satisfaction, of the Offering Statement, the form of Subscription Agreement and such corporate records, documents, certificates and other agreements and instruments as we have deemed necessary or appropriate to enable us to render the opinions hereinafter expressed.

On the basis of such examination, we are of the opinion that:

1. The Shares have been duly authorized by all necessary corporate action of the Company.

2. When issued and sold by the Company against payment therefor pursuant to the terms of the Subscription Agreement, the Shares will be validly issued, fully paid and non-assessable.

We hereby consent to the use of our name in the Offering Statement and we also consent to the filing of this opinion as an exhibit thereto. In giving this consent, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act of 1933 or the rules and regula-tions of the Commission thereunder.

Very truly yours,

/s/ William R. Eilers                       

Eilers Law Group, P.A.

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