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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-variant: small-caps">United
States Securities And Exchange Commission<BR>
</FONT>Washington, DC 20549</P>

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<P STYLE="font: bold 18pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">FORM 8-K&nbsp;</P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">CURRENT REPORT<BR>
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934</P>

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    <TD STYLE="width: 100%">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Date of Report: June 7, 2012</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Date of earliest event reported: June 4,
        2012)</P></TD></TR>
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    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD></TR>
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    <TD>
        <P STYLE="font: 24pt Times New Roman, Times, Serif; margin: 0pt 0; font-variant: small-caps; text-align: center"><B><U>NB MANUFACTURING,
        INC.</U></B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Exact name of registrant as specified in
        its charter)</P></TD></TR>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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    <TD STYLE="width: 43%; font-size: 10pt; text-align: center"><B><U>Nevada<BR>
</U></B>(State or other jurisdiction <BR>
of incorporation)</TD>
    <TD STYLE="width: 27%; font-size: 10pt; text-align: center"><B><U>000-52678<BR>
</U></B>(Commission <BR>
File Number)</TD>
    <TD STYLE="width: 30%; font-size: 10pt; text-align: center"><B><U>20-0853320<BR>
</U></B>(IRS Employer <BR>
Identification No.)</TD></TR>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>80 E. Rio Salado Parkway, Suite 115,
Tempe, AZ 85281</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in">(Address of principal
executive offices) (Zip Code)</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>(602) 281-3554</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Registrant's telephone number)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>3410 W. Glendale, Suite D, Phoenix,
AZ 85051</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Former Address)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>ITEM 2.01 Completion of Acquisition
or Disposition of Assets</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On June 4, 2012, the
merger (the &quot;Merger&quot;) contemplated by the Merger Agreement dated as of April 25, 2012 by and among NB Manufacturing,
Inc., a Nevada corporation (&quot;NB&quot; or the &quot;Registrant&quot;), NB Manufacturing Subsidiary, LLC, a Nevada limited liability
company (the &quot;Merger Sub&quot;), Xhibit, LLC, a Nevada limited liability company (&quot;Xhibit&quot;) and a certain director
and officer of NB (the &quot;Merger Agreement&quot;), as amended as of May 23, 2012, was completed as of the filing of Articles
of Merger with the Secretary of State of the State of Nevada, merging the Merger Sub into Xhibit.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As a result of the
Merger and pursuant to the Merger Agreement, Xhibit has become a wholly-owned subsidiary of the Registrant, and the Registrant
is issuing shares of its common stock to holders of Units of Xhibit at a rate of 1.2641737582 shares of the Registrant's common
stock for each Xhibit Unit. <B> </B>Immediately prior to the Merger and following its recent 8:1 forward stock split (which was
completed effective March 1, 2012), the Registrant had approximately 11,200,224 shares of common stock outstanding.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Following the Merger,
the Registrant has 66,583,676 shares of common stock outstanding and no derivative securities outstanding. Following the Merger,
the former members of Xhibit own 83.2% of the Registrant's outstanding securities, and the Registrant's shareholders own 16.8%
of the Registrant's outstanding securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Among the conditions
to the closing of the Merger, the registrant has agreed to prepare and file a Form S-1 registration statement to register the resale
of all of its restricted shares, including those issued as part of the Merger, within one year of the closing of the Merger.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The foregoing description
of the Merger Agreement and related transactions does not purport to be complete and is qualified in its entirety by reference
to the full text of the Merger Agreement, a copy of which was filed as Exhibit 2.1 to <FONT STYLE="text-underline-style: none; color: windowtext">the
Company</FONT>'s Current Report on Form 8-K filed by <FONT STYLE="text-underline-style: none; color: windowtext">the Company</FONT>
with the SEC on April 18, 2012, and to the amendment filed as Exhibit 2.2 to this Current Report on Form 8-K, and is incorporated
into this Item 2.01 in its entirety by reference.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><FONT STYLE="font-variant: small-caps"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><FONT STYLE="font-variant: small-caps"><B>Business
of the Registrant and Its Subsidiary</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Cautionary Statement Regarding Forward-Looking
Information</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">All statements contained
in this Form 8-K and the documents annexed to or incorporated by reference into this Form 8-K, other than statements of historical
facts, that address future activities, events or developments are forward-looking statements, including, but not limited to, statements
containing the words &quot;believe,&quot; &quot;expect,&quot; &quot;anticipate,&quot; &quot;intends,&quot; &quot;estimate,&quot;
&quot;forecast,&quot; &quot;project,&quot; and similar expressions. All statements other than statements of historical fact are
statements that could be deemed forward-looking statements, including any statements of the plans, strategies and objectives of
management for future operations; any statements concerning proposed new products, services, developments or industry rankings;
any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions
underlying any of the foregoing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">These statements are
based on certain assumptions and analyses made by NB and Xhibit in light of their experience and their assessment of historical
trends, current conditions and expected future developments as well as other factors they believe are appropriate under the circumstances.
However, whether actual results will conform to the expectations and predictions of management is subject to a number of risks
and uncertainties described under &quot;<FONT STYLE="font-variant: small-caps">Risk Factors</FONT>&quot; below and in the &quot;<FONT STYLE="font-variant: small-caps">Risk
Factors</FONT>&quot; sections of the Company's Form 10-K and Form 10-Q filings with the SEC that may cause actual results to differ
materially.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The principal risks
and uncertainties include the fact that Xhibit has limited operating history and that NB may need to raise capital to expand its
scope of operations and other risks that are described in the section entitled &quot;<FONT STYLE="font-variant: small-caps">Risk
Factors</FONT>&quot; below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Consequently, all of
the forward-looking statements made in this Form 8-K and the documents annexed to or incorporated by reference into this Form 8-K
are qualified by these cautionary statements and there can be no assurance that the actual results anticipated by management will
be realized or, even if substantially realized, that they will have the expected consequences to or effects on our business operations.
Readers are cautioned not to place undue reliance on such forward-looking statements as they speak only of NB or Xhibit's views
as of the date the statement was made. NB and Xhibit undertake no obligation to publicly update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Explanatory Note</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Unless otherwise indicated
or the context otherwise requires, all references below in this report on Form 8-K to &quot;we,&quot; &quot;us&quot; and the &quot;Company&quot;
are to NB Manufacturing, Inc., a Nevada corporation, and its subsidiary, Xhibit LLC, a Nevada limited liability company. References
to the &quot;Registrant&quot; or &quot;NB&quot; are to solely NB Manufacturing, Inc., a Nevada corporation. References to &quot;Xhibit&quot;
are to Xhibit LLC, a Nevada limited liability company, and its subsidiaries. All references to tradenames and domain names contained
herein are the property of their respective owners.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Available Information</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company electronically
files its annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to these
reports and other information with the Securities and Exchange Commission (&quot;SEC&quot;). These reports can be obtained by accessing
the SEC's website at www.sec.gov. The public can also obtain copies by visiting the SEC's Public Reference Room at 100 F Street
NE, Washington, DC 20549 or by calling the SEC at 1-800-SEC-0330. In addition, the Company makes copies of its annual and quarterly
reports available to the public at its website at www.xhibitcorp.com. Information on this website is not a part of this Report.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Business of NB Manufacturing</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">NB Manufacturing, Inc.
was incorporated on September 19, 2001 in the State of Nevada pursuant to a U.S. Bankruptcy Court Chapter 11 Reorganization Plan
for New Bridge Products, Inc., confirmed on June 17, 2002 (CASE NO. 00-13546-ECF-RIN). It has been a shell corporation since inception.
Immediately prior to the completion of the Merger, the Registrant did not conduct any business operations and had minimal assets
and liabilities.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Business of Xhibit LLC</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Xhibit LLC (the &quot;Company&quot;
or &quot;Xhibit&quot;) was formed on July 18, 2011 for the purpose of acquiring and consolidating the operations of Stacked Digital,
LLC (&quot;Stacked&quot;), Hrizzo, LLC (&quot;Hrizzo&quot;), and SpyFire Interactive, LLC (&quot;SpyFire&quot;). While Hrizzo was
acquired by the Company, it was subsequently returned to its founder as management determined that the services offered by Hrizzo
were better kept separate from the Company. SpyFire was founded on October 27, 2005 and wholly owned by Chris Richarde while Stacked
was founded on April 11, 2010 and owned fifty percent by Chris Richarde and fifty percent by Jason Hrissikopoulos. SpyFire and
Stacked primarily serve the digital advertising ad agency and internet publisher business. Most of their revenue was historically
generated through developing online advertising and advertising campaigns in the education markets. On August
12, 2011, the Company merged SpyFire and Stacked into Xhibit, a company managed by Xhibit Management Corp., which is ultimately
controlled by Mr. Richarde.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On May 24, 2012, Xhibit
acquired Social Bounce, LLC (&quot;Bounce&quot;), a social media and online game development company founded on August 2, 2011
and majority owned by Mr. Richarde, as its third operating subsidiary. Bounce was acquired to obtain domain names and social media/online
gaming properties to consolidate with the operations of the other subsidiaries of Xhibit.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">While SpyFire, Stacked
and Bounce are all operating subsidiaries of Xhibit, the discussion contained herein will refer to Xhibit and its brand names known
in the industry as XI United and Lead Revolution. Shortly, management plans to reorganize and consolidate the Company to better
reflect its operating brands and when this consolidation is completed will no longer separate the Company into these three separate
subsidiaries which now have overlapping business purposes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-style: normal">Overview</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Regardless of the medium
used, a successful advertisement requires both placement in a widely viewed &ldquo;location&rdquo; (e.g. a Superbowl ad) and with
an attractive &ldquo;pitch&rdquo; so viewers remember the product (e.g. the Energizer Bunny for batteries or the GEICO lizard for
insurance). With online marketing and advertising most internet companies seek to convince their customers that they the best &ldquo;location&rdquo;
to reach their intended audiences. For example, Facebook touts its extensive number of users and encourages advertisers to access
its platform to reach this audience. Its strategy is to provide an attractive location for online advertising but it generally
does not get involved in assisting with the customization or targeting of the advertising message itself.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Today, there are a
wide array of companies devoted to designing and improving websites to attract online customers; preparing advertising slogans
and developing &ldquo;buzz words&rdquo; to attract the online surfer to those websites designed to sell products or services; providing
consulting to get a customer&rsquo;s name higher on the list provided by Google of similar product or service providers; developing
internet marketing campaigns which may include cutting edge graphics and video; offering brief single paragraph postings of products
or services.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The numerous companies
focused on assisting with the message content of the advertising as opposed to the location of that message or content generally
focus on their particular market niche instead of providing an integrated strategy combining quality website development with a
well targeted cutting edge ad campaign. These disparate market solutions force the consumer to &ldquo;quarterback&rdquo; the numerous
online marketing service providers; making it more difficult to develop a cohesive unified approach to online advertising.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Xhibit is well positioned
for the market shift from offline advertising to digital advertising and the benefits of streamlined cloud based solutions. (Xhibit
uses the term &ldquo;cloud based&rdquo; to refer to web and app based access to server side software delivered over a network of
servers and platforms, where users are not required to install Xhibit&rsquo;s software on their computer, phone, tablet or laptop
to access the software). It has positioned a talented group of employees which it believes are capable of releasing a broad spectrum
of tools and media to capitalize on this opportunity in ways management believes no other company has done.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Xhibit is a cloud based
technology development company with its primary historical focus on digital advertising, and a recently expanded focus on online
and mobile social media, games and CRM (customer relationship management) solutions. Xhibit's XI United and Lead Revolution brands
provide the synergies required for a full service ad agency and web and technology development company with digital advertising
and marketing across various channels of search engine, social media, display, email, and mobile markets. Both through their advertising
efforts and Lead Revolution's publisher network, this operation generates tens of millions of impressions (where someone views
an ad), over one million unique clicks (where someone clicks on an ad), over fifty thousand leads (where someone provides contact
information in response to an ad) and thirty five hundred sales per month, creating significant value for top tier advertisers.
With over thirteen years of digital media experience provided by its founders, Xhibit's divisions understand the needs of their
advertisers and provide cutting edge, integrated solutions as a full service ad agency. From branding products and campaigns start
to finish, app development, and website engineering, to generating impressions, clicks, or actual leads and sales for their customers,
XI United and Lead Revolution provide a single source for all their advertisers' needs. These internal advertiser and ad agency
relationships offer potential monetization capabilities for Xhibit's social media and games currently under development. Xhibit
does not need to outsource ad agency solutions for its internal proprietary intellectual property as Lead Revolution and XI United
already have proven advertising and marketing experience and relationships with top tier advertisers, such as Capitol Records,
The Beach Boys, American Laser Center, and esurance, and indirectly through other ad networks and agencies have carried out promotional
advertising for many other leading brands. Management believes the combination of an ad agency, advertising solutions, and a technology
development company creates a synergistic and unique platform to launch Xhibit's own intellectual property under development.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">XI United&rsquo;s and
Lead Revolution&rsquo;s customers are primarily businesses, brand advertisers and the advertising agencies that service these groups.
Lead Revolution and XI United also conduct performance-based advertising campaigns and programs where advertisers pay only for
advertising that generates a customer lead or product sale. They target campaigns to reach the online consumers most likely to
make purchases or request further information. The emphasis is on trending consumer products or services to maximize margins and
rate of success.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Lead Revolution generates
the audiences for its advertisers' campaigns through its internal member base, as well as through search engine, social media,
display, email, and mobile markets, its network of publishers (this term refers to individuals, businesses or large corporations that serve ads to an audience through
a variety of means - a publisher can serve ads through a website the publisher owns or a website it purchases ad space from, or
a publisher can be an individual who purchases ads from a company that owns a mobile app, or a company that has a newsletter it
sends out to clients and chooses to display or promote advertisements in it),
other online ad agencies and other forms of media. Lead Revolution licenses proprietary media platforms for online advertising
inventory aggregation, campaign targeting and optimization, delivery, measurement and reporting, and analytics. Xhibit is concurrently
developing a proprietary tracking platform to replace Lead Revolution's licensed software. Having Xhibit's team of technology developers
and XI United's experience gives Lead Revolution crucial access to additional resources and advantages over stand alone ad agencies.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">XI United and Lead
Revolution provide access to participate in large-scale advertiser and advertising agency campaigns that many publishers may not
have access to on their own, enhanced advertising results through campaign optimization, branding, licensed targeting and detailed
analytics. XI United often utilizes its ad agency and web development expertise to fine tune or enhance ad campaigns to optimize
results and generate the maximum return on advertisers' investment. Although network publishers compete for online consumers, XI
United and Lead Revolution plan to help many online publishers, not owned by the Company, to monetize their respective online audiences
or advertising inventories with additional tools and ad placement technology currently under development.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-style: normal">&nbsp;</FONT></P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-style: normal">Industry
</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 30.6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 30.6pt">Marketing has evolved
significantly in recent years, driven by changes in media consumption, real-time engagement through social media and pervasive
mobile connectivity through tablets and smart phones. For marketers today, delivering relevant, meaningful and timely communications
is more challenging than ever, as consumers are interacting with brands offline and online through interactive channels such as
email, mobile, Twitter, Facebook and websites. This new era of the hyper-connected and empowered consumer requires organizations
to develop a cross-channel view of their customers to drive real-time, relevant engagement and positive return on marketing investment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 30.6pt"><B><I>&nbsp;</I></B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 30.6pt"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 30.6pt"><B><I>Market Opportunity
for Interactive Marketing </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 30.6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 30.6pt">Consumers are increasingly
using email, mobile, social media and websites to access information and interact with brands. Media consumption is shifting from
offline channels to interactive channels, as evidenced by Forrester's finding that in 2010, 33% of weekly media consumption among
U.S. adults occurred through the Internet (Source: Forrester, <I>U.S. Interactive Marketing Forecast</I>, 2011 to 2016, August
24, 2011, as updated September 7, 2011). This is driving marketers to increase the percentage of advertising spending on interactive
marketing. According to Forrester's <I>U.S. Interactive Marketing Forecast, 2011 To 2016</I>, U.S. marketers plan to increase spending
on interactive channels (defined as display, search, email, mobile and social media) as a percentage of total advertising spending
from 16% in 2011 to 26% in 2016, creating a projected $77 billion market in the United States by 2016, of which email, mobile and
social media marketing is expected to grow from approximately $4.8 billion in 2011 to nearly $15.7 billion by 2016, representing
a compound annual growth rate of 27%. In addition to this large U.S. market opportunity, management believes the addressable market
outside the United States presents an even greater opportunity based on comparisons of population, Internet usage, mobile adoption
and e-commerce spending. Key opportunities by channel include:</P>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><B><I>Email. </I></B>Email remains the primary channel for interactive marketers given its compelling
return on investment and ubiquity of use. According to a 2011 Direct Marketing Association report, email marketing returned an
estimated $40.56 for every dollar spent on it in 2011, the highest return on investment among all marketing channels (Source: Direct
Marketing Association, <I>The Power of Direct Marketing</I>, 2011-2012 Edition, October 2011). Forrester projects the overall market
for U.S. email marketing will grow from $1.5 billion in 2011 to $2.5 billion in 2016, representing a compound annual growth rate
of 10% (Source: Forrester, <I>U.S. Interactive Marketing Forecast</I>, 2011 to 2016, August 24, 2011, as updated September 7, 2011).<SUP>
</SUP>Xhibit understands this opportunity and this is why management believes FlyReply is a key component in capturing a portion
of this market.</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><B><I>Mobile. </I></B>Mobile marketing provides compelling benefits, such as location-based data
as well as a channel for real-time engagement with customers. Given the mobile channel's ability to generate immediate response,
it can be an effective way to acquire new customers and obtain permission for communication through other marketing channels. According
to Forrester, U.S. mobile marketing spending is expected to grow from $1.7 billion in 2011 to $8.2 billion in 2016, representing
a compound annual growth rate of 38% (Source: Forrester, <I>U.S. Interactive Marketing Forecast</I>, 2011 to 2016, August 24, 2011,
as updated September 7, 2011).</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><B><I>Social. </I></B>The rapid emergence of social media has fundamentally changed the way consumers
interact with each other and with brands. Facebook has announced it has over 800 million active users, and Twitter has announced
it has over 175 million members. These leading social media networks enable marketers to interact and engage in real time with
consumers. According to Forrester, U.S. social media marketing spending is expected to grow from $1.6 billion in 2011 to $5.0 billion
in 2016, representing a compound annual growth rate of 26% (Source: Forrester, <I>U.S. Interactive Marketing Forecast</I>, 2011
to 2016, August 24, 2011, as updated September 7, 2011).<SUP> </SUP>According to a Nielson repost in August 2010, the time spent
playing online games in the United States surpassed the time spent on email.</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><B><I>Sites. </I></B>Email, mobile and social media drive website traffic, which is a critical
component of interactive marketing campaigns as it not only enables marketers to obtain permission for further communications,
but also provides the means by which conversion occurs to generate sales. Websites provide marketers with tools such as web forms
to collect customer information and online conversion tracking to create customer data-driven targeting rules to personalize landing
pages and microsites.<B><I> </I></B></TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><B><I>Emergence of the App Economy.&nbsp;</I></B>In order to provide users with a wider range of
engaging experiences, social networks and mobile operating systems have opened their platforms to developers, transforming the
creation, distribution and consumption of digital content. We refer to this as the &quot;App Economy.&quot; In the App Economy,
developers can create applications accessing unique features of the platforms, distribute applications digitally to a broad audience
and regularly update existing applications.&nbsp;Social networking sites and mobile application stores have become mass market
consumer destinations where content is easy to find, immediately accessible and always available.&nbsp;Growth in the number and
quality of applications has driven further increases in social network and mobile usage.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

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<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">o</FONT></TD><TD STYLE="text-align: justify"><I>Social graph and viral distribution.</I>&nbsp;At the core of social networks is the social graph,
a digital mapping of a social network user's real-world connections that can be used to promote social interaction and sharing
among the users. By leveraging the social graph, high quality social applications that deliver compelling value for social network
users and have mass appeal can achieve significant levels of adoption rapidly via viral growth.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

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<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">o</FONT></TD><TD STYLE="text-align: justify"><I>Proliferation of mobile</I>. There is significant demand for applications on mobile platforms
such as Apple iOS and Google Android. As smart phones, tablets and other increasingly powerful connected devices have proliferated
worldwide, application developers have leveraged the much greater distribution opportunity and emerging social connectivity of
mobile devices. Games are the most popular category of applications on smartphones, representing approximately half of the time
spent on smartphone applications in the United States, according to a May 2011 report by Flurry Analytics, a market data and analytics
firm.</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><B><I>Rapid Growth of Free-to-Play Games.&nbsp;</I></B>Most social games are free to play and generate
revenue through the in-game sale of virtual goods. According to In-Stat, a market intelligence firm, the worldwide market for the
sale of virtual goods was $7.3 billion in 2010 and is expected to more than double by 2014. Compared to pay-to-play business models,
the free-to-play approach tends to attract a wider audience of players, thereby increasing the number of players who have the potential
to become paying users. By attracting a larger audience, the free-to-play model also enables a higher degree of in-game social
interaction, which enhances the game experience for all players.</TD></TR></TABLE>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-style: normal">&nbsp;</FONT></P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-style: normal">Market
Challenges </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">Most organizations
understand that effective email marketing and cross-channel, interactive marketing can drive customer engagement, increase sales
and improve return on marketing investment. However, organizations often lack the technology, infrastructure and expertise needed
to plan, automate, deliver and optimize data-driven interactive marketing campaigns and real-time communications across interactive
channels. Marketers considering the adoption or expansion of email and cross-channel, interactive marketing programs face many
challenges, including the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><B><I>Difficulty in Integrating Data to Create a Single, Unified View of Each Consumer.</I></B>
With the proliferation of consumer data generated by social media, web analytics and e-commerce, it is difficult for organizations
to integrate these disparate data sources to create a single, unified view that reflects a collective knowledge of each consumer,
including previous interactions and preferences, in order to effectively target and deliver personalized and relevant communications.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><B><I>Complexity in Effectively Engaging Consumers Across Multiple Channels.</I></B> Engaging consumers
has become increasingly difficult in today's media-saturated environment, requiring marketers to provide increasingly personalized
and relevant communications. Organizations require data management and interaction technologies that enable them to leverage cross-channel
insights to drive relevant communications. Non-relevant content and poorly timed communications may result in interactions that
fail to produce positive return on investment, tarnish brand image or alienate consumers.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

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<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><B><I>Inability of Disparate Point Solutions to Address Marketers' Emerging Needs.</I></B> Many
solutions are designed to only address specific marketing channels or use cases. These siloed point solutions create significant
cost inefficiencies and limitations in integrating data in a timely manner among solutions and interactive marketing channels.
These solutions often lack the flexibility, cross-channel functionality and scalability to meet marketers' evolving needs as their
programs grow in scale and sophistication. This problem is exacerbated as organizations increase the number of channels they use
to communicate and interact with consumers.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in"><B><I>&nbsp;</I></B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><B><I>Complex Security and Infrastructure Requirements.</I></B> Given the critical nature of interactive
communications such as fraud alerts, e-statements and time-sensitive offers, organizations require 24/7 application availability,
high-volume transaction processing, sophisticated security controls and a significant amount of data storage. To meet these requirements
internally, organizations must make significant investments in technical expertise, complex infrastructure, advanced security measures
and data storage.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><B><I>Changing Deliverability and Regulatory Standards.</I></B> To ensure marketing communications
reach their intended recipients, marketers must understand and adhere to the complex and constantly-evolving permission and delivery
standards of leading ISPs and telecommunication providers. In addition, organizations must maintain compliance with state, federal
and international laws governing the delivery of mobile and email messages, including the U.S. CAN-SPAM Act and foreign governments'
privacy and permission laws and regulations.</TD></TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Business Strategy</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Xhibit is seeking to
become the first technology and development company to effectively monetize social media, online and mobile games, and cloud based
CRM solutions in a seamless package which more effectively combines advertising with these modern mediums of communication. The
Company believes that it can achieve this by providing a more captivating user experience with less intrusive ads than the competition
and more effectively monetizing all aspects of the digital delivery process. Management believes that other social networks currently
lose a significant amount of revenue from brokered advertising that is purchased by other ad agencies simply because many social
networks lack the ad agency experience and have chosen not to develop this business model. Many social networks provide limited
support to even their high-end clients.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Management believes
that that through its brands XI United and Lead Revolution it can capture advertising dollars through a combination of cutting
edge technology coupled with the development of successful ad campaigns. Instead of merely providing an agnostic conduit for an
advertisement developed by a client which may not produce its intended results, XI United provides the expertise to design or re-design
a client&rsquo;s advertisements or to develop an advertising campaign which is targeted at and appeals to the intended audience.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Many companies are
concerned about the actual value of social media and mobile advertising. Management believes that combining social media and online
games with result-driven advertising reduces that concern for advertisers and creates an ever-growing opportunity for companies.
Integrating social media with performance-based advertising helps change the paradigm from how much a company wants to spend on
advertising to how much they want to earn with a measurable return on investment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>The Opportunity</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Digital ad agencies
will continue to flourish as advertisers endeavor to expand their reach online. Xhibit will continue to grow within the online
advertising space by scaling its operations and rolling out new services to meet growing demand.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Xhibit intends to use
its existing advertising network and future social networks as a platform to market social games thereby creating synergies that
do not rely primarily on third-party social network providers such as Facebook. Key elements of this strategy include:</P>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><B><I>Cross Pollinization of Markets</I></B>. Xhibit's focus will seek to create synergies between
advertising companies and social media, allowing advertisers to expand market reach, and developing a subscriber base with grass
roots support for both social media and game apps and web based properties that are developed.</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><B><I>Win New Clients by Expanding Direct and Indirect Sales</I></B><I>.</I> Xhibit believes the
market for interactive advertising solutions is large and underserved, and the Company will continue making significant investments
to pursue this global market opportunity. To acquire new clients, Xhibit will continue to expand its distribution channels of advertising
and marketing service providers. Xhibit will continue to employ an opportunistic strategy tailored for each market and industry
as the Company expands.</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><B><I>Increase Revenue From Existing Clients.</I></B> With clients in many markets and industries,
Xhibit expects to have a significant opportunity to sell additional applications, development, and advertising to existing clients
and expand their use of emerging interactive channels such as mobile and social media.</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="background-color: white"><B><I>Launch New Social Networks, Apps and Games.</I></B>&nbsp;Xhibit
will continue to invest in building new social networks and games to expand the genres of media offered, further engaging with
existing users and attracting new ones. </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="background-color: white"><B><I>Increase Monetization of Games.</I></B>&nbsp;Xhibit
plans to offer increased selection, better merchandising and more payment options to increase the sales of virtual goods. Players
purchase these virtual goods to extend their play sessions, personalize their game environments, accelerate their progress or send
unique gifts to their friends. Xhibit also plans to continue to pursue additional revenue opportunities from advertising, including
branded virtual goods and sponsorships. </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="background-color: white"><B><I>Increase Monetization of Social Networks and Apps.</I></B>
Xhibit plans to offer items of interest to its social network members through more targeted ads within the site and through advertisements
in optional newsletters that individuals &quot;opt-in&quot; to. Xhibit also plans to provide multiple payment options for goods
purchased within the social networks. For example, if someone is using MovieSocial to purchase a movie ticket within the website
or app, the member may have the option to use &quot;MovieSocial&quot; points, PayPal, credit cards, or other forms of payment.
</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><B><I>Selectively Pursue Acquisitions.</I></B> Xhibit can expand its business through acquisitions,
primarily in terms of product. The Company will explore acquisition opportunities of companies and technologies to expand the functionality
of product solutions, provide access to new clients or markets or both.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Solutions to the dynamic digital ad agency environment </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The online advertising
landscape is highly fragmented. Advertisers, ad networks, e-mail service providers, data tracking companies, search engine marketing
(SEM) firms, media placement agencies, and publishers. Disconnect among participants creates significant inefficiency along the supply chain. This presents an
opportunity for a full-service ad agency to deliver a streamlined, integrated suite of online advertising and promotional services
to a wide range of advertisers and publishers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Xhibit recognizes that
to effectively address this opportunity, an ad agency must address the specific needs of advertisers, publishers, and consumers.
To that end, Xhibit has developed proprietary technologies that will enable the launch of a scalable, full-service digital ad agency
found in XI United, Lead Revolution, and AdBind.com.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Advertisers are seeking
digital ad agencies that can efficiently connect them to large, responsive audiences. Management believes that Lead Revolution
will fulfill this need by leveraging a vast network of advertising capabilities and publishers to connect advertisers to millions
of strategically targeted prospects. Management believes that the Company's advertising and publishing experience, relationships,
technologies, and strategies will ensure that Lead Revolution's, XI United's and AdBind's campaign click-through and conversion
ratios are among the highest in the industry. Lead Revolution's and AdBind's cost-per-action campaigns allow the Company to provide
advertising based on a specific action or result, virtually eliminating the advertisers' risk, as advertisers only pay when results
they specify are achieved.</P>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="background-color: white"><B><I>Reach &ndash; </I></B><FONT STYLE="color: black">XI
United&rsquo;s and Lead Revolution's advertising and advertising network of publisher partners currently generates tens of millions
of ad impressions, over one million unique clicks, over fifty thousand leads and thirty five hundred sales per month, impacting
consumers when they are most responsive. </FONT></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="background-color: white"><B><I>Target &ndash;</I></B> Xhibit's customer profile database
coupled with Xhibit's proprietary data enhancement technology will enable the Company to target audiences using psychographic,
demographic, location, and behavioral data.<B><I> </I></B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="background-color: white"><B><I>Optimize &ndash; </I></B>XI United's leading edge optimization
expertise will allow the Company to deliver optimal performance within any advertiser's budget. Xhibit's team will develop optimization
solutions that result in higher performance campaigns for its advertiser clients. </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="background-color: white"><B><I>Customer Service &ndash; </I></B>With nearly 100 years
of combined online marketing experience and access to best in breed tracking and reporting tools, Xhibit's expert staff will provide
unmatched customer service and value to advertisers. </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Publishers are demanding
lucrative opportunities to serve quality ads. Furthermore, publishers are demanding fair compensation for their efforts. Lead Revolution
will fulfill this need by offering publishers high-quality, fully optimized ad campaigns coupled with competitive payout packages.
Lead Revolution's and AdBind&rsquo;s proprietary tracking technologies under development will allow the Company to deploy, monitor,
and optimize each campaign internally before offering the campaign to publishers, greatly reducing publishers' optimization costs.
In addition, Lead Revolution's and AdBind&rsquo;s in-house tracking platform under development will provide publishers with transparent
and accurate performance data, ensuring fair publisher compensation.</P>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="background-color: white"><B><I>Revenue &ndash; </I></B></FONT>Lead Revolution's and
AdBind&rsquo;s <FONT STYLE="background-color: white">advanced technologies, including a robust internal tracking platform under
development, will streamline </FONT>Lead Revolution's <FONT STYLE="background-color: white">business model, eliminating costly
third-party firms and translating to higher payouts for publishers.<B><I> </I></B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="background-color: white"><B><I>Control and Transparency &ndash;</I></B> </FONT>Lead
Revolution's <FONT STYLE="background-color: white">tracking technologies under development, integrated with an intuitive user interface,
will provide publishers with the tools they need to monitor campaign performance as well as payouts. </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="background-color: white"><B><I>Quality Ads &ndash; </I></B></FONT>Lead Revolution,
AdBind and XI United <FONT STYLE="background-color: white">will work with reputable advertisers that offer quality products and
services in relevant markets, giving publishers access to ads for these quality products and services more likely to appeal to
consumers. Unlike most digital ad agencies, the Company is able to test campaigns prior to deployment. </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Consumers are demanding
convenience. Xhibit's brands fulfill this need by delivering conveniently targeted ads. The Company painstakingly assesses every
aspect of an ad campaign, ensuring that the consumer receives a relevant ad at a convenient time and location. To increase advertising
reach, Lead Revolution has developed an internal member base from its own websites. This member base is continually updated, monitored,
and refined. Subscribers with low activity levels are quickly removed from the database. As a result, Lead Revolution's subscribers
are interested and responsive.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="background-color: white"><B>Xhibit's
Overall Business Model </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Xhibit's business model
is to create multiple solutions for advertisers to connect to their consumers through various pathways by (a) cost effectively
building quality member and customer bases through Xhibit&rsquo;s captivating websites, social networks, games and apps, and giving
businesses the ability to target and reach a higher quality and more receptive customer; and (b) providing companies a better and
more robust ability to connect with their existing customer base through innovative cloud based solutions, such as FlyReply.com.
XI United, Lead Revolution, and AdBind.com. Xhibit will connect businesses with the ability to serve ads to these multiple member
bases, while at the same time providing scalable and attractive business to business solutions, advertising, ad agency and marketing
capabilities to its business customers. The Company will serve as a one-stop-shop, connecting advertisers to millions of prospective
users and members. Xhibit's business model is more efficient than those of traditional online ad agencies, social networks or game
developers, which rely on numerous outside partners. Xhibit can combine its internal resources to reduce costs and deliver quality
products to market quickly. For example, FlyReply.com 1.0 was developed from the ground up in under six months. Furthermore, Xhibit's
ability to immediately monetize any of its internal social networks, apps and games under development with its ad agency and advertiser
relationships provides the Company with a distinct competitive advantage.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Xhibit plans to obtain
members from its content-rich domains, interactive games, apps, and social network initiatives. The Company believes it has six
primary ways to enhance revenues and profit over time: (a) increase the number of Xhibit-owned interactive games, social networks,
and apps; (b) gain more FlyReply.com customers using its services; (c) increase the amount of ad agency customers and advertisers
it works with under XI United; (d) provide plug and play monetization vehicles, such as ads that can be pulled from a cloud based
environment, and easily integrated into third party mobile apps, games, social networks, high traffic websites, and other potential
clients in the digital space; (e) increase the number of high quality publishers in its ad agency; and (f) increase the value of
campaigns run through the ad agency by leveraging and scaling the amount of long-term relationships with advertisers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Xhibit derives revenue
from the business divisions described below. These business divisions are presented on a worldwide basis and include ad agency
services, advertising and media, as well as owned and operated businesses, which are described in more detail below. For information
regarding the operating performance of these divisions, see &quot;<B>Management's Discussion and Analysis of Financial Condition
and Results of Operations - Xhibit</B>.&quot;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Ad Agency</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>General Services</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Xhibit's ad agency
services, described below, are offered through its XI United and Lead Revolution brands. With the combination of a pay-for-performance
model built on licensed technology platforms, marketing expertise, and a large, quality advertising network, the companies provides
advertisers all of the consulting, strategy, and turn-key solutions needed to promote their companies or products in a digital
environment. Combining these resources with its web and technology development capabilities allows Xhibit to deliver a complete
spectrum of services to advertisers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, Lead Revolution
provides an open environment whereby advertisers can be connected to other online publishers (this term refers to those businesses
which prepare online &ldquo;newsletters&rdquo; tailored to specific industries) to further increase their overall advertising exposure
while growing more rapidly. These publishers can quickly view payments and conversion statistics to assess the effectiveness of
every advertiser relationship and advertisement, and advertisers can quickly gauge the quality and potential of each third-party
publisher relationship in the marketplace, allowing them to maximize the performance and scale of their online advertising campaigns.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Lead Revolution has
over one hundred online third-party publishers that advertisers can access in its advertising network. It also partners with third-party
website publishers and applies a licensed technology platform and industry expertise to deliver customers' display ad campaigns
to the appropriate pages of publisher partners' websites.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Advertisers can reach
targeted online users on a large scale, using a variety of online display ad units across this entire network of publishers, customized
content channels, or a select number of websites and portals where Lead Revolution is authorized to sell inventory on a single-site
basis. Audiences can be further targeted based on the demographic and behavioral tracking composition of sites within the network
and technical information such as geographic location, browser type, connection speed, ISP or top-level domain (.com, .edu, etc.).
In addition, the unique behavioral targeting capabilities available through Lead Revolution and provided by third-party companies
allow advertisers to retarget users who have recently visited their sites or to display highly relevant ads based on anonymous
profiles based on consumers' recent online behavior such as web browsing and interaction with ads across Lead Revolution's network.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Lead Revolution delivers
a variety of display ad units to the web pages of online display advertising from network publishers and tracks them to evaluate
success against the goals of the advertising programs. With traditional banner ads, interstitials, text links, and other online
ad units, this technology maximizes the impact of marketing campaigns by identifying the most effective placement for each type
of campaign.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">XI United also executes
a wide variety of rich media applications, including in-stream and in-banner video ads, providing even greater visual and auditory
impact for an advertisers' online display marketing campaigns.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">XI United and Lead
Revolution have launched multiple pricing models designed around maximizing the customers' return on investment. Display advertising
placements are offered on several pricing models including cost-per thousand-impression (&quot;CPM&quot;), whereby customers pay
based on the number of times the target audience is exposed to the advertisement, cost-per-click (&quot;CPC&quot;), whereby payment
is triggered only when an interested individual clicks on a customer's advertisement; and cost-per-action (&quot;CPA&quot;), whereby
payment is triggered only when a specific, pre-defined action is performed by an online consumer. Management believes that Lead
Revolution has been able to generate its highest returns from CPAs.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The benefits that Lead
Revolution's customers enjoy in display and other web advertising include, but are not limited to: flexible pricing models; the
ability to target and reach significant numbers of online consumers in a way that complements media buys on portals and other large
websites; and the ability to improve online advertising performance while the campaigns are still running by optimizing at site,
placement and creative levels, based on both response to ads and the resulting conversions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Publishers in Lead
Revolution's display advertising network enjoy efficient and effective monetization of their online advertising inventory, including:
participation in large-scale advertiser and advertising agency campaigns they may not be able to access on their own; enhanced
monetization through Lead Revolution's campaign optimization experience; and detailed analytics.<B> </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Key Customers</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our industry does not
have clients which enter into long term contracts and substantially all of our customers either have contracts which can be terminated
immediately or are not in writing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>AdCafe</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Xhibit's relationship
with AdCafe, LLC, its largest customer accounting for approximately 46% of 2011 revenue, is set forth in three contractual components:
a List Management Agreement, an Exclusivity Agreement and Insertion Orders issued pursuant to Standard Terms and Conditions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">AdCafe has granted
SpyFire (Xhibit's wholly owned subsidiary) the exclusive rights to market certain offers through the SpyFire Network. With certain
exceptions, these relate to sixfigurekit.com. This agreement requires SpyFire to reach
certain monthly minimum leads to maintain its exclusive rights. SpyFire's compensation is calculated based upon the number of leads
it provides. It renews on an automatic annual basis unless terminated by either party within thirty days of a current term. The
current term expires on June 24, 2013.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Pursuant to Standard
Terms and Conditions which apply to the current Insertion Order with AdCafe, SpyFire is functioning primarily as a broker to place
the ads through other networks with whom SpyFire is affiliated. Either party may terminate the contract, although all compensation
due to SpyFire through the end of the period must be paid by AdCafe, however the referral commission aspect of the agreement survives
termination. Management believes the current AdCafe Insertion Order will be phased out in the near future, and does not know whether
or not SpyFire will execute a new Insertion Order with AdCafe for other marketing campaigns. Failure to do so would result in a
significant decline in revenue from AdCafe.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Through the List Management
Agreement, SpyFire solicits AdCafe&rsquo;s leads or customers on AdCafe&rsquo;s behalf and sends them various email campaigns and
&ldquo;sent to&rdquo; email addresses AdCafe provides. SpyFire's commission is calculated as a net percentage of the net revenue
generated from the management of the lists provided by AdCafe, as well as its own. It renews on an automatic annual basis unless
terminated by either party within thirty days of a current term. The current term expires on August 9, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Spire Vision</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company serves
as an advertiser for the ad agency Spire Vision, LLC, its second largest customer in 2011. While there is no written contract for
these services, the parties operate pursuant to specified terms and conditions and related insertion orders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Other Customers</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Xhibit's portfolio
of brands generating top line revenue in the last six quarters is a strong validation of the Company's business model and competitive
advantage. Viet Le, President of XI United, Xhibit&rsquo;s web and ad agency division, has already worked directly for the Beach
Boys, Capitol Records, Ernst Benz, and indirectly for Fortune 500 companies including Pixar, Nintendo, General Motors, Mazda, and
CNN and many others through strategic relationships with other ad agencies.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Web and Technology Development</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>XI United</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">XI United is managed
by Viet Le who owned and operated a successful web and technology development business in the Detroit area which he shut down when
he was hired by the Company on January 1, 2012. This division has only comprised a small portion of the total revenue of the Company
but management believes with the combined efforts of Xhibit's CTO Dzenis Softic that it has the ability to grow in parity with
the other divisions and resources the Company offers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">XI United provides
a comprehensive suite of online marketing knowledge and technology development capabilities that help advertisers create and increase
awareness for their products and brands, attract visitors, and generate leads and sales through the Internet. Companies pay XI
United on a per project and hourly rate basis for these development services.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">XI United offers a
diverse foundation of custom high-powered digital design and development services with disciplined strategic planning and execution.
Utilizing mixed mediums of creative ideation, consumer interaction and technology, XI United brings expertise and influence to
the next generation of online media. From engaging social and motion driven websites to cross platform 3D game development, XI
United offers comprehensive full service solutions to clients as well as internal technological developments. Upon receiving a
request for proposal, XI United utilizes the user experience studies in project execution detailed below to determine optimal client
predictions on price points. XI United presents three pricing packages with itemized pricing specific to each client. These options
are intended to serve as a psychological upsell strategy in which the project lead will determine ideal margins and place them
within the more enticing package. As XI United bills on an hourly basis, the itemized pricing allows prospective clients to see
the hours of work allocation and better determine the value provided.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>&nbsp;</I></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Smarter Integration</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">According to a recent
International Data Corp. forecast and analysis, the 2012 Smartphone market share is expected to increase by 33.5% from 2011, with
a 33.5% growing trend of consumers requiring more than mobile access (Source: <FONT STYLE="text-underline-style: none; color: windowtext">http://www.idc.com/</FONT>
getdoc.jsp? containerId=233553). XI United leverages rich media infused websites, games and mobile applications delivered across
web, mobile and tablet platforms to provide seamless social experiences that result in the ultimate consumer reach. Utilizing web
and app technology together synchronously, it provides a cohesive experience no matter what device consumers are viewing content
on. XI United's core competencies include:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in; text-align: left">&bull;</TD><TD STYLE="text-align: justify">Digital branding</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in; text-align: left">&bull;</TD><TD STYLE="text-align: justify">Content strategy</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in; text-align: left">&bull;</TD><TD STYLE="text-align: justify">Optimal design for web and mobile technology</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in; text-align: left">&bull;</TD><TD STYLE="text-align: justify">Rich media design</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in; text-align: left">&bull;</TD><TD STYLE="text-align: justify">Game development</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><U>Delivery Vehicles</U>:
Websites, Custom Applications and Web Platforms, Video Games, Video Rich Content Media, Strategic Planning</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><U>Target Vehicles</U>:
Web, Mobile Devices and Tablet Devices and utilizing these delivery vehicles for an integrated consumer experience.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Capabilities and
Full Service Solutions (shown in the chart below)</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 95%; border-collapse: collapse; font-family: Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24%; border-bottom: windowtext 1pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Strategic</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Planning</P></TD>
    <TD STYLE="width: 2%; text-autospace: none; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 26%; border-bottom: windowtext 1pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Web</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Technology</P></TD>
    <TD STYLE="width: 2%; text-autospace: none; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 22%; border-bottom: windowtext 1pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Branding and</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Identity</P></TD>
    <TD STYLE="width: 2%; text-autospace: none; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 22%; border-bottom: windowtext 1pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Rich Media and</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Video</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">User Research</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Market Research</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Competitive Analysis</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Process Analysis</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Digital Strategy</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Product Planning</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Web Analytics</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Monetization Strategy</P></TD>
    <TD STYLE="text-autospace: none; font-size: 10pt">&nbsp;</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Client Side Dev</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(HTML, HTML5, CSS, XHTML, DHTML, AJAX)</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Server Side Dev</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(PHP, MYSQL, XML, JS)</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Mobile Design</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(iOS and Android games, websites)</P></TD>
    <TD STYLE="text-autospace: none; font-size: 10pt">&nbsp;</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Branding</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Identity Systems</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Logo Design</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Brand Book</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Style Guides</P></TD>
    <TD STYLE="text-autospace: none; font-size: 10pt">&nbsp;</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">CGI / 3D</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Motion Graphics</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Stylistic Animation</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Special Effects</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Script Writing</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Voiceover and Audio</P></TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Product Development
Process</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In developing products
for clients, XI United uses four distinct stages of development:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><U>Business Development.</U>
The stage prior to project inception with the goal of finding qualified leads and nurturing client relationships.</P>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="background-color: white">Sales <B><I>&ndash; </I></B>Generates proposals, helps clients
with request for proposals and qualifies leads for project acquisition; and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Account Management &ndash; Nurtures client interactions and upsells additional work and ideas.
Sends estimates and invoices.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><U>Plan</U>. The initial
stage of project inception in which the client and XI United team meet to discuss goal setting, expectations, potential risks,
and brainstorming.</P>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="background-color: white">Project Management &ndash; Organizes overall project timelines,
assets and allocates internal and external team resources that are dedicated for the life of the project; analyzes potential risks
and works with account manager to understand client needs;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="background-color: white">User Experience &ndash; In depth studies to analyze client
demographics and determine how to talk to the expected users. Also determines the most optimal workflow to predict user behaviors
by creating site maps and information architecture through wireframes or rapid prototypes; and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Branding and Content Strategy &ndash; Utilizes user experience studies to determine valuable content
and deliver the best message or products. Writes copy and sets tonal direction.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><U>Design</U>. The
first stage in which visual design is implemented. Utilizing the strategies outlined above, XI United generates visuals that optimize
each project.</P>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Creative Direction &ndash; Sets overall visual concept and oversees progress and development to
ensure optimal goals;</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Production Design &ndash; Graphic design that creates overall project look and feel; and</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Rich Media Design &ndash; Creates highly interactive content such as: motion graphics, video production,
animation, and 3D computer graphics.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><U>Develop</U>. The
final stage in which the products are developed.</P>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Client Side Development &ndash; Creates all front-end development utilizing HTML5, HTML, CSS, XHTML,
DHTML, and AJAX;</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Server Side Development &ndash; Creates all back-end development with complex database and server
administration utilizing PHP, MYSQL, JS and XML; and</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Rich Media Development &ndash; Develops the highly interactive concepts designed in the previous
phase utilizing 3D, motion and Flash.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><U>Marketing and Maintenance</U>.
Once completed the Company can generate fees through maintenance.</P>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Pay Per Click &ndash; Online ad management and pay per click media placements; and</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Maintenance &ndash; Monthly retainers that provide project updates and other various client requests.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><I>Employee Atmosphere</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">XI United offers its
employees a creative work environment that encourages them to take pride and ownership in their work, while learning valuable industry
knowledge. Each employee undergoes detailed training to learn multiple roles from XI United agency veterans, and also learns a
uniform style of working together on design and development projects. XI United pushes employees to encourage each other and has
implemented a peer review system that allows each member to be accountable to each other.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Sample Projects
Include</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><img src="pg16.jpg"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Of the clients referenced
above, XI United has worked directly with The Beach Boys, Capitol Records, and Ernst Benz, and indirectly with Pixar, Nintendo,
General Motors, Mazda, Carhartt, PNC, the UPS Store, CNN and many others through strategic relationships with other ad agencies.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Business Expansion
Plans</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><U>Direct Client Relationships</U>.
XI United has several ongoing direct relationships including providing services to The Beach Boys and Capitol Records and is seeking
additional direct clients as the bulk of its business presently comes through other ad agencies.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><U>Strategic Relationships</U>.
XI United is seeking to create more strategic relationships with ongoing agencies of record that need interactive, advertising
or other resources Xhibit can provide. XI United will provide the interactive development for these clients and help with new business
pitches; the intent is to sign exclusive agreements to award XI United all the interactive and advertising business of such agencies.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><U>Nurturing Existing
Clients</U>. XI United will continue upselling current return clients for additional interactive work, and setting existing monthly
retainers for dedicated hours.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><U>Further Development</U>.
Continue to develop more internal applications and properties.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><U>Monetize Intellectual
Property</U>. By integrating future AdBind tools and technology that is currently under development by Xhibit&rsquo;s team. Once
AdBind&rsquo;s tools are available, XI plans to provide monetization vehicles for its potential clients, such as plug and play
ads that can be pulled from a cloud based environment and easily integrated in mobile apps, games, social networks, high traffic
websites, and other potential clients in the digital space. This allows intellectual property owners to focus on what they do best
while XI United seeks the advertising relationships to help build their overall revenue from the project.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Cloud Based CRM Solutions</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">FlyReply.com is currently
in public beta testing. FlyReply&rsquo;s ESP (email service provider) platform features are available for companies to use in beta
testing. FlyReply&rsquo;s full CRM, social media integration, and rich media ad deployment, described below in further detail,
are still under development and Xhibit expects them to be live by the fourth quarter of 2012. FlyReply is a combination of proprietary
technology and licensed third party technology including Power MTA to ensure the highest level of delivery. It is designed to provide
more than a conventional ESP. At its core, it is a cloud based CRM application for promotional marketing to current customers with
advanced customer communication management and seamless integration of email and social marketing in one system.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Even though FlyReply
is a cloud based technology, the Company will encourage users to download an interface app for use on mobile and tablet devices
for improved functionality. Proponents claim that cloud computing allows enterprises to get their applications up and running faster,
with improved manageability, less maintenance downtime for updates, and enables information technology departments to more rapidly
adjust resources to meet fluctuating and unpredictable business demand. Xhibit&rsquo;s management believes that developing software,
sites and games for a &ldquo;cloud based&rdquo; environment will allow for faster distribution, better accessibility and easier
software updates when applicable. FlyReply was created to give companies and organizations a better connection to their customers
and clientele.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Management believes
social media and email are the most crucial forms of modern communication and that companies and organizations not benefiting from
the most robust platforms and tools for this correspondence lose substantial revenue and customer engagement. Management is developing
FlyReply with the goal of providing better communication to those customers while potentially increasing quality engagement with
video, voice, HTML and other forms of rich media. This allows a company using FlyReply to provide more complete customer service,
correspondence and product updates, and realize other monetization capabilities with its contacts.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><img src="pg18.jpg"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Small businesses use
ESPs to conveniently deliver professional email newsletters and advertising periodically to their customers. FlyReply&rsquo;s user-friendly
dashboard allows for robust tracking and analytics and engineered-to-measure engagement to further understand what correspondence
appeals to different groups of customers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">FlyReply has pre-designed
message templates tailored to various types of companies and organizations. FlyReply also allows for full HTML editing as well
as an enhanced automated HTML editor for users to custom build or change messages to their specifications. An example of this template
design system is shown below:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><img src="pg19.jpg"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">FlyReply helps reduce
expensive postal mail costs by increasing social and email communication with a company's customers in a simple and easy-to-use
interface. It allows businesses to learn more about their consumers through a proprietary and real-time tracking platform, based
on actions from customer engagement. The online interface can track user engagement on a newsletter and easily allows businesses
to create divisions based on engagement criteria such as, but not limited to, interest, gender, location, and age, in order to
better target and provide more specific services and products of interests to the businesses' customers. A sample tracking panel
is shown below:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><img src="pg20.jpg"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">FlyReply&rsquo;s customers
will pay monthly subscription fees as their mailing lists grow based on the number of messages they send per month. Revenue will
also come from customers interested in purchasing available premium services upgrades and ad agency solutions. XI United can also
benefit from FlyReply&rsquo;s customers seeking to generate more subscribers for their newsletters and purchase that result-based
advertising on a performance basis. Examples of successful ESP companies which are also competitors are icontact.com, constantcontact.com
and Exact Target. Management believes that the success of these rapidly growing businesses is indicative of FlyReply&rsquo;s growth
potential.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Many companies are
recognizing that in the fast-paced digital world, they need to connect with their customers through social media. FlyReply&rsquo;s
full version (under development) synergistically combining social media and email will help streamline a business's communication
needs with its customer base, as well as allow these businesses to further monetize that customer base. FlyReply hopes to attract
Fortune 500 companies by creating a best in class cloud based solution for their ESP and promotional CRM needs.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in"><B>Ad Products Under
Development</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">AdBind.com is a performance
based bidding advertising network and tool connecting advertisers to ad publishing vehicles across various media channels. It is
expected that AdBind.com's brand will eventually be combined with XI United's.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">AdBind's bidding channels
AdSearch, AdSocial, AdMail, AdWeb, and AdMobile bridge the gap and create a &quot;one-stop shop&quot; for companies and individuals
interested in marketing in the technology space. The concept uses advanced tracking technology, cloud based ad development and
distribution to create an innovative user environment. Management believes that AdBind will be the exclusive portal to purchase
advertising on Xhibit's content-rich social media under development.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Once AdBind's tools
are combined with XI United, AdBind will also focus on providing plug and play monetization vehicles, such as ads that can be pulled
from their cloud based environment, and easily integrated into third party mobile apps, games, social networks, high traffic websites,
and other potential clients in the digital space.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Initially, AdMail will
be offered to FlyReply customers. FlyReply users can choose to &quot;activate&quot; AdMail within FlyReply. Once activated, this
service will automatically insert third-party and non-competing ads into companies' and organizations' newsletters delivered from
FlyReply. When users click on those ads managed by AdBind, revenue will be shared with the sender of the newsletter, generating
additional monetization from those list members. A sophisticated artificial intelligence will automatically pair both the advertiser
and the company sending the newsletter with the most mutually beneficial ads that are generating the highest conversions for the
advertiser and highest engagement within the newsletter. AdMail is currently the first feature of AdBind and is fully operational
and just recently began seeking clients but has not secured one as of this filing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in; background-color: white"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in; background-color: white"><B>Social
Networks and Communities Under Development</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white"><FONT STYLE="background-color: white"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white"><FONT STYLE="background-color: white"><I>New
Product Philosophies</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Management of Xhibit
believes that content-rich domains, mobile and tablet apps, games and web 3.0 communities are the future of the digital space.
Xhibit's goals are to create not only web and technology development for third-party companies through its XI United division,
but also use those resources to build its own proprietary products in these areas. Xhibit aims to create captivating user experiences,
while at the same time properly monetizing its digital IP.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Many companies use
excessive ads that are intrusive to the user's experience. Xhibit plans to utilize its expertise in digital marketing and create
a less ad intrusive user environment and at the same time generate greater revenue with properly positioned and targeted advertising.
Facebook has proven that social media is an excellent source of quality customer information and data, but Xhibit understands that
targeting consumers more effectively can provide a less intrusive user experience. Xhibit plans to incentivize users to desire
to engage in the social media site and the related advertising, by providing less intrusive ads and the same &quot;free to use&quot;
web-based experience all people seek and enjoy.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Xhibit will continue
to develop and grow domains in strategic verticals. Xhibit's enhanced ability to monetize IP and data, coupled with direct advertiser
relationships, allows the Company to outbid competitors when vying for advertising, giving Xhibit a competitive advantage when
developing its online portfolio of products and services. Xhibit also plans to drive ad agency and publisher network traffic to
its domains, games, mobile and tablet apps, seeking a self-sustaining critical mass of participants for its online communities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><B>Movie/Celebrity
Focused Networks and Communities </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>The projects described
below are currently under development and there is no guarantee they will ever come to fruition.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Xhibit is developing
a celebrity following app that allows stars to personally record and distribute rich media content inside the app and simultaneously
through Facebook, Twitter, and other social media platforms, while growing their fan bases all in one place.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The MovieSocial project
is an interactive site and mobile app that allows users to explore the latest movie trailers, buy tickets, invite friends or find
a movie partner, and earn exclusive points. It allows users to discuss, blog, and vote on movies and earn rewards and badges for
that interaction. The MovieSocial platform is also designed to help production companies deliver movie trailer views to interested
people throughout the site and mobile app, as well as through email and mobile traffic across XI United's advertising channels
on a performance basis.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">These Xhibit built
and owned communities are designed to become a way for people to connect with others across the world based on shared areas of
interest. Management believes that growing social mobile and web communities allows for better targeted advertising and, with a
large community, can add substantially to XI United&rsquo;s, AdBind's, and Lead Revolution&rsquo;s advertising capabilities. User
engagement and understanding consumers are key to advertising. Owning proprietary mobile apps and websites, coupled with its ad
agency resources, is designed to give Xhibit the ability to maintain even higher quality and more targeted ad placements for its
clients.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Online and Mobile Games</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>The projects described
below are currently under development and there is no guarantee they will ever come to fruition.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Xhibit's management
believes that social games represent a new form of entertainment that will continue to capture an increasing proportion of consumer
leisure time. In addition, social games are the most popular applications on Facebook. The Company is basing its game development
model on the premise that games and gaming have been, and will continue to be, a key driver of engagement on social networks, and
increasingly on mobile platforms. Xhibit has several mobile and Facebook games under development. These games are a work in progress
and there is no guarantee when or if they will be available to the public or as a Company offering or product. Xhibit&rsquo;s web
versions of these games are planned to require client side Flash to run but data is stored on servers through a remote location,
whereas the mobile and tablet versions are planned to use a client side app to improve functionality.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As consumers gravitate
toward more social forms of online entertainment, Xhibit expects that social games will capture an increasing portion of the overall
$49 billion video game software market, as estimated for 2011 by International Data Corporation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Xhibit believes that
a player-centric approach is the key to success in social games. Games acquired and/or developed by Xhibit are designed to be:</P>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="background-color: white"><B><I>Accessible by Everyone, Anywhere, Any Time.&nbsp;</I></B></FONT>Xhibit
intends to design<FONT STYLE="background-color: white"><B><I> </I></B>games so that they are easy to learn, playable in short sessions
and accessible on multiple platforms. They will operate as live services that can be played anytime and anywhere.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="background-color: white"><B><I>Social.&nbsp;</I></B>Games are most engaging and fun
when they are social. Xhibit intends to provide a community of players with simple ways to find their friends online and connect,
play and share with them. In addition to leveraging the viral and social features provided by social networks, Xhibit designs and
innovates social mechanics into its games. </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="background-color: white"><B><I>Free.&nbsp;</I></B>Xhibit's free-to-play model attracts
a larger audience than a traditional pay-to-play approach. This enables a higher degree of social interaction and improves the
game experience for all players. Players can choose to purchase virtual goods to enhance their game experience.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="background-color: white"><B><I>Fun.</I></B>&nbsp;Xhibit intends for games to be fun
and engaging by regularly delivering new content, features, quests, challenges and virtual goods that enhance the experience for
players. As a result, the games are a perpetual source of play, evolving with a community of players over time. Players express
their personalities by designing and customizing the appearances of their characters and building and decorating their own virtual
presence and environments.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white"><FONT STYLE="background-color: white"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white"><FONT STYLE="background-color: white"><I>Xhibit
Social Games</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Xhibit designs social
games to provide players with shared experiences that surprise and delight them. Its social games will leverage the global connectivity
and distribution of the Company's proprietary social network on Facebook, other social networks and mobile platforms, such as Apple
iOS and Google Android. The games will be free to play, span a number of genres and attract a community of players that is demographically
and geographically diverse.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Xhibit intends to provide
games as live services and will update them with fresh content and new features to make them more social, enhance player engagement
and improve monetization. Xhibit can then analyze the data generated by players' game play and social interactions to guide the
creation of new content and features. This ongoing feedback loop to keeps games compelling and enhances the player experience.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Xhibit games will be
designed to inspire and enable players to express their personalities by customizing the appearances of their characters and building
and enhancing their environment. Players then invest time in the games in a variety of ways. Through activities, players advance
in the game, which the industry refers to as leveling up.&nbsp;Players can choose to advance in the game by investing additional
time, requesting help from their friends or purchasing virtual goods.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="background-color: white">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white"><FONT STYLE="background-color: white"><I>The
Social Experience</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The social design of
Xhibit's games are at the core of the way players experience the games. Xhibit's games will encourage players to quickly connect
to their friends when they start a game and to build and enhance these relationships throughout the game experience.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white"><FONT STYLE="background-color: white"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white"><FONT STYLE="background-color: white"><I>Virtual
Goods</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In most of Xhibit's
games, players will earn virtual goods through game play, receive them as gifts or purchase them. Virtual goods are digital representations
of real world goods. Through virtual goods players are able to extend their play sessions, enhance or personalize their game environments,
accelerate their progress in games and share and trade with friends. A player's acquisition, gifting and purchase of virtual goods
create social interaction that increases their engagement with games and with each other.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The primary revenue
source from Xhibit games will be the sale of virtual currency that players use to buy in-game virtual goods. Some forms of virtual
currency are earned through game play, while other forms can only be acquired for cash or, in some cases, by accepting promotional
offers from Xhibit's advertising partners.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following summary
provides examples of the benefits received by players from the purchase of virtual goods:</P>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><B><I>Invest and Express.&nbsp;</I></B>Many Xhibit games will offer players the opportunity to
purchase decorative and functional items to personalize their game environment and express their individual taste or style.</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><B><I>Gift.</I>&nbsp;</B>Xhibit games will offer players the opportunity to purchase gifts for
their friends.&nbsp;Other features will tie offline events to online social interactions and virtual goods purchases.</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><B><I>Contribute to Social Causes</I>.&nbsp;</B>Xhibit will enable players to contribute to charitable
causes that they believe in by purchasing specially created virtual goods in-game.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Xhibit Technology</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Xhibit architecture
is based on the standard F/OSS stack. Xhibit uses a PHP application, designed to run both on the standard Apache server, and also
uses PHP FPM. This enables Xhibit to pick between using a standard Apache server, or, when scalability dictates, move to a multi-tier
architecture using a faster web server, such as NginX. This will also enable Xhibit to divide its resources between front-end and
application parts, and enable full load-balancing and high-availability scaling. This is the same web front-end that runs the world's
heaviest use sites, with Facebook being a prime example.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The database is currently
a standard GA MySQL instance, but Xhibit is able to quickly move to a more scalable implementation, like Percona XTraDB, and from
there scale further either towards a multi-master MySQL deployment, or even towards a Gelera-enabled XtraDB Cluster if the need
should arise. However, management believes its existing database is sufficient for the foreseeable future since regular multi-master
multi-slave scalable MySQL has been proven in usage, and now without any problems powers websites such as Twitter.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Xhibit's security is
both perimeter based and also design based. Xhibit started with an industry-leading Cisco ASA firewall, but has also employed full
database built-in security, and combined them in a system designed to protect all its mission-critical and confidential data. Also,
for both database reasons, and for reasons regarding database stability, Xhibit does not deploy its database back-end in the cloud,
but instead insists on hosting it all only on physical, dedicated servers, to which Xhibit, and only Xhibit, has full access and
control. Finally, using the F/OSS software, management believes Xhibit is using the best tested and reviewed applications available.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In short, the entire
system is a combination of a well supported and widely deployed F/OSS stack, the same one running some of the biggest and the world's
most visited websites, carefully integrated into Xhibit's custom system, and then tied together using Xhibit's in-house software,
creating a hugely scalable, resilient and easy to expand architecture. Based on the best use-case scenarios used by the industry
leaders, and then customized and optimized to suit Xhibit's needs, management believes that this system gives Xhibit all available
advantages and puts Xhibit in a position to grow all the way to the top, while retaining control and also providing Xhibit with
the security and the ability to fully customize it as Xhibit sees fit.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">All Xhibit technologies
are built with the principles of speed, reliability and easy scalability in mind. These goals are often obtained by utilizing a
unique combination of custom-built software and reliable hardware with fail-safe mechanisms.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Historically, Xhibit
has outsourced its API calls (Application Programming Interface Calls) and database management architecture which was developed
and currently maintained by an independent contractor who works out of Serbia. Xhibit is in the process of forming a wholly owned
subsidiary and this independent contractor plans to relocate to Bosnia and work with Xhibit's other software developers who are
developing its social media and online gaming software as an employee of this Bosnia subsidiary. As of the filing of this Form
8-K, this process has not been completed. See &quot;<I>Risk Factors &ndash; We rely on our foreign employees and independent contractors</I>.&quot;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Xhibit multiplayer
gaming platforms have both client side and server side</I>.<B> </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Client side is a Flash/ActionScript3
based application based on ASISO engine with custom graphics and gameplay. All clients are communicating over TCP/IP with our complex
server side infrastructure, which is designed to support load balancing, fail-safe recovery and easy scalability of every component
in the system. This means that all components can effectively run on one server or hundreds of servers if the load requires it.
Some of the components are gameplay servers, image manipulation servers or central hubs.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>All of Xhibit gaming
projects use in-house 3D modelers and animators. </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">AdBind.com's tracking
platforms are designed to deliver ads through a cluster of web servers with a backend mechanism geared to optimizing the ad conversion
by connecting the right ad with the right visitor.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">FlyReply.com's delivery
platform is custom software, written in PHP/JavaScript and designed to manage hundreds of millions of emails with detailed reporting
and easy to use list management features. The technology ensures proper email delivery by using industry standard licensed PowerMTA
software.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Since all Xhibit social
networks are planned to attract high traffic, the Company is developing a system that will be able to handle high and sudden bursts
of traffic. This will be attained by designing native mobile and web applications that communicate to Xhibit's cloud servers through
a load balancer with fail-safe mechanisms, which then distributes the load to multiple web servers and creates new instances of
web servers on-the-fly to effectively and efficiently manage the bursts of traffic. When the traffic slows down, the extra web
server instances would be automatically shutdown in order to keep hosting costs at a minimum.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B>Other Information</B></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">Proprietary Rights</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Xhibit's business is
significantly based on the creation, acquisition, use and protection of intellectual property. Some of this intellectual property
is in the form of software code and trade secrets that the Company uses to develop its products and to enable them to run properly
on multiple platforms. Other intellectual property created by Xhibit includes audio-visual elements, including graphics, music,
story lines and interface design.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">While most of the intellectual
property utilized by Xhibit is created in house, the Company has acquired rights to certain proprietary intellectual property.
It has also obtained rights to use intellectual property through licenses and service agreements with third parties. These licenses
typically limit Xhibit's use of intellectual property to specific uses and for specific time periods.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Xhibit protects its
intellectual property rights by relying on federal, state and common law rights, as well as contractual restrictions. The Company
controls access to its proprietary technology by entering into confidentiality and invention assignment agreements with employees
and contractors, and confidentiality agreements with third parties. Xhibit also actively engages in monitoring and enforcement
activities with respect to infringing uses of its intellectual property by third parties.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition to these
contractual arrangements, Xhibit also relies on a combination of trade secret, copyright, trademark, trade dress, domain name and
patents to protect its products and other intellectual property. The Company typically owns the copyright to the software code
to its content, as well as the brand or title name trademark under which the products are marketed. Xhibit pursues the registration
of its domain names, trademarks, and service marks in the United States and in locations outside the United States. Its pending
and registered trademarks in the United States include &quot;AdBind&quot; and &quot;Fly Reply&trade;&quot;. It is in the process
of applying for registration of certain of its tradenames, including &quot;XI United,&quot; &quot;Lead Revolution,&quot; &quot;AdMail&quot;,
&ldquo;Yoosip&rdquo; and &quot;Mooke.&quot;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Circumstances outside
Xhibit's control could pose a threat to its intellectual property rights. For example, effective intellectual property protection
may not be available in the United States or other countries in which Xhibit's products are distributed. Also, the efforts Xhibit
has taken to protect its proprietary rights may not be sufficient or effective. Any significant impairment of Xhibit's intellectual
property rights could harm its business or its ability to compete. Also, protecting Xhibit intellectual property rights is costly
and time-consuming. Any unauthorized disclosure or use of the Company's intellectual property could make it more expensive to do
business, thereby harming operating results.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Companies in the Internet,
games, social media, technology and other industries may own large numbers of patents, copyrights and trademarks and may frequently
request license agreements, threaten litigation or file suit against the Company based on allegations of infringement or other
violations of intellectual property rights. From time to time Xhibit expects to face allegations by third parties, including competitors
that the Company has infringed on their trademarks, copyrights, patents and other intellectual property rights. As Xhibit faces
increasing competition and as the business grows, the Company will likely face more claims of infringement.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">Research And Development</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">During the three-year
period ended December 31, 2011, Xhibit and its predecessor companies incurred less than $100,000 in costs related to research and
development activities. The Company expects to continue increasing levels of ongoing research and development activities for the
foreseeable future as it pursues development of online games and social media.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">Government Regulation</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Xhibit is subject to
a number of foreign and domestic laws and regulations that affect companies conducting business on the Internet, many of which
are still evolving and could be interpreted in ways that could harm its business. In the United States and internationally, laws
relating to the liability of providers of online services for activities of their users and other third parties are currently being
tested by a number of claims, including actions based on invasion of privacy and other torts, unfair competition, copyright and
trademark infringement, and other theories based on the nature and content of the materials searched, the ads posted, or the content
provided by users. Any court ruling or other governmental action that imposes liability on providers of online services for the
activities of their users and other third parties could harm Xhibit's business. Xhibit is potentially subject to a number of foreign
and domestic laws and regulations that affect the offering of certain types of content, such as that which depicts violence, many
of which are ill defined, still evolving and could be interpreted in ways that could harm Xhibit's business or expose us to liability.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, rising
concern about the use of social networking technologies for illegal conduct, such as the unauthorized dissemination of national
security information, money laundering or supporting terrorist activities may in the future produce legislation or other governmental
action that could require changes to Xhibit's social properties, games, advertising and applications or restrict or impose additional
costs upon the conduct of Xhibit's business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Xhibit, through its
ad agency subsidiary, also sometimes offers customers various types of sweepstakes, giveaways and promotion opportunities. The
Company is subject to laws in a number of jurisdictions concerning the operation and offering of such activities and games, many
of which are still evolving and could be interpreted in ways that could harm Xhibit's business. Any court ruling or other governmental
action that imposes liability on providers of online services could result in criminal or civil liability and could harm Xhibit's
business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In the area of information
security and data protection, many states have passed laws requiring notification to users when there is a security breach for
personal data, such as the 2002 amendment to California's Information Practices Act, or requiring the adoption of minimum information
security standards that are often vaguely defined and difficult to implement. The costs of compliance with these laws may increase
in the future as a result of changes in interpretation. Furthermore, any failure on Xhibit's part to comply with these laws may
subject it to significant liabilities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Xhibit is also subject
to federal, state and foreign laws regarding privacy and protection of customer data. The Company posts its Privacy Policy and
Terms of Service online, which describes corporate practices concerning the use, transmission and disclosure of player data. Any
failure by the Company to comply with posted privacy policy or privacy related laws and regulations could result in proceedings
against Xhibit by governmental authorities or others, which could harm the Company's business. In addition, the interpretation
of data protection laws, and their application to the Internet is unclear and in a state of flux. There is a risk that these laws
may be interpreted and applied in conflicting ways from state to state, country to country, or region to region, and in a manner
that is not consistent with current corporate data protection practices. Complying with these varying international requirements
could cause the Company to incur additional costs and change our business practices. Further, any failure by the Company to adequately
protect customers' privacy and data could result in a loss of businesses&rsquo; or user&rsquo;s confidence in Xhibit's services
and ultimately in a loss of customers, which could adversely affect the Company's business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, because
Xhibit's services are accessible worldwide, certain foreign jurisdictions have claimed and others may claim that Xhibit is required
to comply with their laws, including in jurisdictions where Xhibit has no local entity, employees, or infrastructure. Domestically,
many states have enacted legislation to collect sales tax from online transactions. Congress currently has three separate bills
pending which address e-commerce. We expect to see increased legislation of online transactions, compliance with which will create
a greater burden on our operations and revenue.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Employees</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Immediately following
the closing of the Merger, Xhibit had 22 full-time employees and no part-time employees, and the Registrant had 2 full-time employees.
The Company's future success will depend, in part, on its ability to attract, retain, and motivate highly qualified sales, technical
and management personnel. From time to time, the Company may employ independent consultants or contractors to support its research
and development, marketing, sales, accounting and administrative organizations. None of the Company's employees are represented
by any collective bargaining unit.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Property</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Xhibit leases approximately
15,811 square feet of office space for its corporate headquarters in Tempe, Arizona under a lease from PKY Fund II Phoenix I, LLC
that expires on May 31, 2018.&nbsp;The Company's executive offices are located at 80 E. Rio Salado Parkway, Suite 115, Tempe, AZ
85281, (602) 281-3554. The Company is not affiliated with its lessor. This facility currently accommodates the Company's principal
executive, development, engineering, marketing, business development, human resources, finance, legal, information technology and
administrative activities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Management believes
that the Company's existing facilities are sufficient for its current needs. The Company intends to add new facilities and expand
its existing facilities as the Company adds employees and expand its markets, and management believes that suitable additional
or substitute space will be available as needed to accommodate any such expansion of the Company's operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Legal Proceedings</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company is not
involved in any material legal proceedings as of the date of this Report. From time to time, the Company may become a party to
litigation and subject to claims incident to the ordinary course of business. Although the results of litigation and claims cannot
be predicted with certainty, management currently believes that the final outcome of these matters will not have a material adverse
effect on the Company's business. Regardless of the outcome, litigation can have an adverse impact on the Company because of defense
and settlement costs, diversion of management resources and other factors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Competition</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The ad agency, ad network
and performance based marketing sectors are very competitive and continue to evolve on a regular basis. The Company faces significant
competition in all aspects of these divisions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Competitors in the
ad network, ad agency and performance based marketing arena include but are not limited to: Omnicom Group, WPP Group, Interpublic
Group of Companies, Publicis Groupe, Dentsu, Havas Suresnes, Aegis Group, Hakuhodo DY Holdings, Asatsu-DK, MDC Partners, Sapient,
Digitas, aQuantive, Aspen Marketing Services, Cheil Communications, Monster Worldwide, WB Doner &amp; Company, Cossette Communication
Group, Richards Group, Bartle Bogle Hegarty, M&amp;C Saatchi, Chime Communications, Merkle Lanham, Wieden+Kennedy, RPA, Cramer-Krasselt,
ChoicePoint Precision Marketing, XL Marketing, AdConian Direct, and ValueClick Media.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The technology and
development space is also highly competitive. Some of Xhibit's top competitors include: IBM, Hewlett Packard, and Microsoft, as
well as many smaller private companies.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The ESP and CRM industry
is very competitive. Some of Xhibit's competitors include but are not limited to: SalesForce.com, Microsoft CRM, SAP AG, AmDocs,
Oracle, constant contact, iContact, bronto mail, silverpop, ExactTarget, Aweber, mailchimp, resultsmail, getresponse, and bluehornett.
Xhibit competes in this market with respect to product functionality, performance and reliability, integrated solutions, delivery
rates, customer support, cost and ease of use. Xhibit competes in this area primarily on the results it gets for its clients in
terms of new customers generated by ad campaigns.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The social media sector
is intensely competitive and is rapidly evolving. Xhibit faces significant competition in all aspects of its business. Specifically,
Xhibit competes for the leisure time, attention and discretionary spending of its users with other social media companies and game
developers on the basis of a number of factors, including quality of user experience, ease of use, brand awareness and reputation
and access to distribution channels.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Xhibit believes it
competes favorably on these factors. However, its industry is evolving rapidly and is becoming increasingly competitive. Other
developers of social media and games could develop more compelling content that competes with Xhibit's social media and games and
adversely affects its ability to attract and retain users, players and increase their average user engagement time. These competitors,
including companies of which management may not be currently aware, may take advantage of social networks, and other advertising
methods to access to a large user base and their network effects to grow rapidly and virally.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">Xhibit's social media
competitors include:</P>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="background-color: white"><B><I>Social Media and Game Developers for Facebook, and
Other Social Networks</I></B><I>:&nbsp;</I>Xhibit faces competition from a number of competitors who develop social media and games
for use on Facebook, and other social networks. These competitors, some of which have significant financial, technical and other
resources, greater name recognition and have longer operating histories, may create similar sites and games to reach Xhibit's players.
Some of these competitors include Google, Pinterest, Twitter, Microsoft, Facebook, Zynga, Inc., Crowdstar, Inc., Electronic Arts
Inc., The Walt Disney Company, Vostu, Ltd. and wooga GmbH. Because Xhibit's sites and games are free to use and play, Xhibit competes
primarily on the basis of player experience rather than price. Xhibit could face additional competition if large companies with
significant online presences, such as Amazon.com, Inc., Facebook, Inc., Google Inc., Microsoft Corporation, Tencent Holdings Limited
and Yahoo! Inc., choose to enter or expand more in the social media and games space or develop competing social properties and
games.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="background-color: white"><B><I>Social Media and Game Developers for Mobile and Tablet
Devices</I></B><I>:&nbsp;</I>The mobile social and game sector is characterized by frequent product introductions, rapidly emerging
mobile platforms, new technologies and new mobile application storefronts. Some of Xhibit's competitors in the mobile market include
Google, Pinterest, Twitter, Microsoft, Facebook, Zynga, Inc., Electronic Arts, DeNA Co. Ltd., Gameloft, Glu Mobile, Rovio Mobile
Ltd and Storm8, Inc. and many others. Xhibit expects new mobile and game app competitors to enter the market and existing competitors
to allocate more resources to develop and market competing games and applications.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="background-color: white"><B><I>Other Social Media and Game Developers</I></B><I>:&nbsp;</I>Xhibit's
users also play other games on PC and consoles, some of which include social features that compete with its social games and have
community functions where game developers can engage with their players. Some of these competitors include Google, Pinterest, Twitter,
Microsoft, Facebook, Zynga, Inc., Activision Blizzard, Inc., Big Fish Games, Inc., Electronic Arts, SEGA of America, Inc., THQ
Inc. and The Walt Disney Company.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in; background-color: white">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="background-color: white"><B><I>Other Forms of Media and Entertainment</I></B><I>:</I>&nbsp;Xhibit
competes more broadly for the leisure time and attention of its users and players with providers of other forms of Internet and
mobile entertainment, including social networking, online casual entertainment and music. To the extent existing or potential players
choose to read, watch or listen to online content or streaming video or radio, or play interactive video games at home or on their
computer or mobile devices rather than play social games, these content services pose a competitive threat.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Management's Discussion and Analysis
of Financial Condition and Results of Operations &ndash; Xhibit</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>The following discussion
should be read in conjunction with Xhibit's audited and unaudited financial statements and associated notes filed with this Form
8-K.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Overview </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Xhibit, LLC (referred
to in this Management's Discussion and Analysis section as &ldquo;Xhibit&rdquo; or the &quot;Company&rdquo;) was organized on July
18, 2011 as a Nevada limited liability company. On August 9, 2011 Xhibit entered into a Unit Exchange Agreement whereby the members
of SpyFire Interactive, LLC (&ldquo;SpyFire&rdquo;) and Stacked Digital, LLC (&ldquo;Stacked&rdquo;) exchanged 100% of their membership
units for 18,292,319 of the Company&rsquo;s units. Concurrent with this transaction, SpyFire and Stacked became wholly-owned subsidiaries
of the Company. There is common ownership and management among all three companies. The Company, through its subsidiaries, is an
online marketing and advertising company providing targeted and measurable online advertising campaigns and programs for a broad
base of advertisers and advertising agency customers. The Company enables marketers to advertise and sell their products and services
through major online marketing channels including display advertising and affiliate marketing networks.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Application of Critical Accounting Policies</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have identified
the policies below as critical to our business operations and the understanding of our results of operations. The impact and any
associated risks related to these policies on our business operations are discussed throughout this &quot;Management's Discussion
and Analysis of Financial Condition and Results of Operations&quot; section when such policies affect our reported or expected
financial results.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In the ordinary course
of business, we have made a number of estimates and assumptions relating to the reporting of results of operations and financial
condition in the preparation of our financial statements in conformity with accounting principles generally accepted in the United
States. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the
circumstances. The results form the basis for making judgments about the carrying values of assets and liabilities that are not
readily apparent from other sources. Actual results could differ significantly from those estimates under different assumptions
and conditions. We believe that the following discussion addresses our most critical accounting policies, which are those that
are most important to the portrayal of our financial condition and results of operations and require our most difficult, subjective,
and complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Concentrations and
Credit Risk</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Financial instruments
that potentially subject the Company to significant concentration of credit risk consist primarily of cash and accounts receivable.
All cash balances are maintained in a single bank and may from time to time exceed Federal Deposit Insurance Corporation (&ldquo;FDIC&rdquo;)
insurance limits. Regarding trade accounts receivable, the Company minimizes its credit risk by performing credit evaluations of
its customers and or limiting the amount of credit extended. Accounts receivable balances are carried net of any allowances for
doubtful accounts.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Financial Instruments</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The carrying value
of the Company&rsquo;s financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, accrued
expenses and note payable approximate fair value because of the short maturities of those instruments.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Accounts Receivable
and Allowance for Doubtful Accounts</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company carries
its accounts receivable at costs, less an allowance for doubtful accounts. On a period basis, management evaluates accounts receivable
balances and establishes an allowance for doubtful accounts based on history of past write-offs, collections and current credit
considerations. Interest is not accrued on overdue receivables nor is collateral obtained on any amounts due.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Revenue Recognition</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company recognizes
revenue when the following criteria have been met: persuasive evidence of an arrangement exists, no significant Company obligations
remain, collection of the related receivable is reasonably assured, and the fees are fixed or determinable. The Company recognizes
revenue at the time services are performed and sales are generated on behalf of their customers. Revenue is presented net of discounts
and allowances.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Advertising</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Advertising costs are
expensed as incurred.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Income Taxes</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company is a limited
liability company, and therefore is not subject to income tax, as any income or loss is allocated to and included in the personal
income tax return of its members. Accordingly, no provision is made for income taxes in the financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Segment Reporting</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company operates
in one segment, internet marketing. All revenues and operations are within the United States.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>Results of Operations </U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Financial Presentation</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following sets
forth a discussion and analysis of the Company's financial condition and results of operations for the year ended December 31,
2011 and the combined operations of Spyfire and Stacked for the year ended December 31, 2010 and for the quarters ended March 31,
2012 (the Company consolidated) and March 31, 2011 (Spyfire and Stacked combined). This discussion and analysis should be read
in conjunction with our consolidated financial statements appearing elsewhere in this Form 8-K. The following discussion contains
forward-looking statements. Our actual results may differ significantly from the results discussed in such forward-looking statements.
Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the &quot;Risk Factors,&quot;
beginning on page 33 of this Form 8-K.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Year Ended December 31, 2011 Compared
to Year Ended December 31, 2010</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Revenues</B>. The
Company generated revenue of $6,351,384 for the year ended December 31, 2011 compared to revenue of $2,367,720 for the year ended
December 31, 2010, an increase of $3,983,664 or approximately 168%. Of this increase, approximately $2.9 million was attributable
to a contract entered into with a single large customer, AdCafe, in June 2011and the insertion order for a specific ad campaign
for this customer. While this contract provides substantial revenue, it results in only nominal margins as it is intended to drive
revenues to the Company's affiliate network for the purpose of creating network scale and volume. The contract with this customer
had an initial term of one year and has been renewed by management for an additional one year period, or into June 2013. While
the agreement has been renewed, management does not believe this contract will continue in 2012 to produce the revenue historically
experienced unless a new insertion order is generated for a new ad campaign, which is not expected to occur.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The remaining approximate
$1.1 million increase in revenue came primarily from digital ad campaigns developed for new customers and increased volumes with
existing customers. During 2011, the Company had a high concentration of revenue and credit risk as its 5 largest customers accounted
for approximately 64% of its total revenues.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Cost of Revenues</B>.
Cost of revenues was $3,760,553 for the year ended December 31, 2011 compared to $788,898 for the year ended December 31, 2010,
an increase of $2,971,655 or 377%.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Cost of revenues consists
primarily of amounts the Company pays to website publishers on its Lead Revolution network and revenue share payments made to various
list owners from whom the Company has agreements to utilize their consumer contact information. Also included in cost of revenues
are payments made to email service providers and payroll costs associated with our network and email delivery services. The substantial
increase in cost of revenues was driven by increased sales volume and in particular the cost of sales to support the AdCafe revenues.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Gross Profit</B>.
Gross profit was $2,590,831 for the year ended December 31, 2011 compared to $1,578,822 for the year ended December 31, 2010. While
overall gross profit increased $1,012,009 or 64%, as a result of additional sales to new customers and expanded sales to existing
customers, gross profit margin percentage decreased to 41% for the year ended December 31, 2011 from 67% for the year ended December
31, 2010. This decrease in gross margin percentage was due to a single new large customer signed in the second half of 2011 whose
contract yields nominal gross margins. The Company intends to use this customer to create scale and volume to enhance the attractiveness
of its affiliate network.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Sales and marketing
expenses. </B>Sales and marketing expenses were $388,589 for the year ended December 31, 2011 compared to $193,725 for the year
ended December 31, 2010, which represents an increase of $194,864 or 101%. The increase was in accord with the increase in revenues
and was due primarily to additional payroll cost incurred as the Company increased personnel to support its future growth plans.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>General and administrative
expenses</B>. General and administrative expenses for the year ended December 31, 2011 were $2,481,846 compared to $230,745 for
the year ended December 31, 2010.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">This increase of $2,251,101
was the result of increased payroll costs as the Company began increasing the number of employees during the third and fourth quarter
of 2011 by hiring a full time CFO and other senior officers in anticipation of becoming a public company and to support its aggressive
growth strategies. Many of the employees who were hired either previously served as independent contractors for the Company or
had their own companies they operated as sole proprietorships. To entice these people from operating businesses in which they were
successful, the Company not only needed to offer competitive salaries at or above market rates but also had to offer equity incentives.
Of the total $2,251,101 increase in general and administrative expenses, $1,456,568 was attributable to non-cash stock-based compensation
expense for membership units issued to certain key employees. Also contributing to the increase were legal fees and accounting
costs related to merging the subsidiaries into the Company and preparing for filings with the SEC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Research and development
expenses</B>. Research and development expenses for the year ended December 31, 2011 were $49,820 as compared to zero for the year
ended December 31, 2010. <B> </B>In 2011, the Company began incurring research and development costs for the first time as it began
to develop new products and services in support of its future growth plans.<B> </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Operating loss</B>.
In the year ended December 31, 2011, the Company had an operating loss of $329,424 compared to operating income of $1,154,352 for
the year ended December 31, 2010, a decrease in profitability of $1,483,776 or 129%.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">This decrease from
profitability was the result of a $1,456,568 non-cash stock-based compensation expense recorded in general and administrative expense
for membership units issued to certain key employees as inducement to attract these highly qualified individuals. Additionally,
in order to rapidly expand and increase its market share management needed to hire a talented team of creative entrepreneurs who
demanded high salaries and develop the infrastructure necessary to become a public company. Although the Company has high margins,
it is deploying all available capital into expanding the business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Three Months Ended March 31, 2012 Compared
to Three Months Ended March 31, 2011</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Revenues. </B>The
substantial increase in revenue to $2,162,334 during the quarter ended March 31, 2012 from $870,315 during the quarter ended March
31, 2011, an increase of $1,292,019 or 148%, evidences the ongoing additional revenue generated by a single new large customer
contract which was not in place during the quarter ended March 31, 2011. The balance of the increase is primarily from new customers
that were not doing business with the Company in the prior year first quarter. <B> </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Cost of revenues.
</B>Cost of revenues was $1,427,340 in the quarter ended March 31, 2012 as compared to $274,398 in the quarter ended March 31,
2011, an increase of $1,152,942 or 420%. Cost of revenues increased at a much higher rate than the increase in revenue itself as
the Company's contract with a single new large customer that took effect in June 2011 and had ongoing impact into the first quarter
of 2012 has much lower margins than its other customer contracts.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Gross Profit. </B>
Gross profit for the quarter ended March 31, 2012 was $734,994 and was $595,917 for the quarter ended March 31, 2011. While overall
gross profit increased $139,077 or 23%, as a result of new business generated over the previous year quarter, gross profit margin
percentage decreased to 34% for the quarter ended March 31, 2012 versus 69% for the quarter ended March 31, 2011. This decrease
in gross profit percentage is due to the impact of a single large customer that yields nominal gross margins. The Company intends
to use this customer to create scale and volume to enhance the attractiveness of its affiliate network.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Sales and marketing
expenses. </B>Sales and marketing expenses increased to $165,983 in the three months ended March 31, 2012 compared to $31,988 in
the three months ended March 31, 2011, an increase of $133,995 or 419%, primarily as a result of higher payroll costs incurred
as the Company expanded its sales and marketing efforts to support future growth plans and new product offerings.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>General and administrative
expenses. </B>General and administrative expenses were $670,662 for the three months ended March 31, 2012 compared to $98,715 for
the three months ended March 31, 2011. The $571,947 or 580% increase is primarily a result of increased payroll costs incurred
while the Company builds out its infrastructure to support its future growth plans. Additionally, the Company has incurred increased
legal expenses and accounting costs related to preparing the Company for its mergers and planned public company status.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Research and development.
</B>Research and development expense increased to $87,326 for the quarter ended March 31, 2012 from $9,000 for the quarter ended
March 31, 2011, an increase of $78,326 or 870%. This increase reflects the Company's focus on developing new web and mobile based
products, services and technologies in support of its growth strategies. These expenditures consist primarily of programming and
software development related services.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Operating loss</B>.
The Company had an operating loss of $188,977 for the quarter ended March 31, 2012 as compared to operating income of $456,214
for the quarter ended March 31, 2011, a decrease in profitability of $645,191 or 141%. The current quarter loss was primarily a
result of the significant increase in payroll costs associated with the hiring of additional employees, legal fees, and increased
sales and marketing expenses as the Company sought to develop the infrastructure to support its aggressive growth plans and expand
its market share and product offerings.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Liquidity and capital
resources</B>. The Company has historically financed its operations through working capital generated from operations. During fiscal
year 2011, the Company used working capital generated from operations, existing cash reserves and cash received through sales of
equity to fund its operations and capital expenditures. The Company raised $875,000 through the sale of units in the Fall of 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Net cash provided by
operating activities totaled $898,268 for the year ended December 31, 2011. Net cash used in investing activities for the year
ended December 31, 2011 of $31,949 was for the purchase of computers and office furniture. Net cash used in financing activities
for the year ended December 31, 2011 was $721,875. Included in financing activities was $875,000 the Company received for the sale
of 1,050,000 of its units made in a private placement during 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Current Liquidity and Capital Resources</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">At December 31, 2011,
cash and cash equivalents amounted to $241,077 compared to $96,633 of cash and cash equivalents at December 31, 2010. The Company
had approximately $569,563 of cash on hand as of March 31, 2012 as compared to $298,767 as of March 31, 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On April 10, 2012,
the Company repaid Mr. Richarde in full plus accrued interest for an outstanding loan he made to the Company in the remaining amount
of $225,665 on August 9, 2011. The note was originally in the amount of $333,516 and due December 31, 2011 but had been extended
to June 30, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of May 25, 2012,
management believes that the Company's monthly required fixed cash operating expenditures are approximately $285,000. Management
estimates it will spend approximately $900,000 on capital expenditures during fiscal year 2012 to complete the build-out and furnish
its corporate offices in Tempe, Arizona and acquire the necessary computers and related IT infrastructure to support its growth
plans.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company has a note
payable to two of its members, one in the amount of $500,000 and the second in the amount of $200,000, each of which earns simple
interest at 10% and both of which are due and payable in September 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Management intends
to raise between $4 and $6 million on or before September 30, 2012 to support its need to rapidly expand its operations and provide
the working capital necessary to do so and to fund development of its online social media and games. The Board of Directors of
the Company is also reviewing several strategic acquisitions and will need funding for these. Finally, as a public company, it
will need capital to pay its ongoing legal and accounting expenses required to meet its reporting obligations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Management believes
this capital will be raised through the private placement of common stock of the post-Merger company. This private placement will
most likely be at a discount to the market price and dilutive to shareholders. Of course, funding may not be available or on acceptable
terms or at all. If the Company is not able to raise additional funds, it will have to curtail operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Based on the foregoing
assumptions, management believes cash and cash equivalents on hand at May 25, 2012 will not be sufficient to meet our anticipated
cash requirements for operations, funding our growth plans and repayment of debt obligations through the end of 2012. As a result,
the Company will need to raise additional capital, either through the issuance of additional notes payable or the sale of its shares
to fund its working capital requirements and planned investment activities for 2012. No assurances can be made that these funds
will be available on a timely basis or in terms acceptable to the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Other Commitments and Contingencies
</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On November 9, 2011
the Company entered into a lease agreement for corporate office space in Tempe, Arizona. The Company has occupied temporary premises
since November 2011 in the same building as its corporate office suite while construction is underway to prepare it for use. Under
the terms of the agreement, the Company made a payment of $250,000 in 2011 for prepaid rent to be applied to the first (9) nine
months' rent beginning with the commencement date of June 1, 2012. Future minimum lease payments as of December 31, 2011 for the
next five years and thereafter are as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 90%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">Year ending December 31,</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; text-align: center">Amount</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 85%; text-align: left">2012</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">125,022</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">2013</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">347,183</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">2014</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">368,923</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">2015</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">400,545</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">2016</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">432,167</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-bottom: 1pt; text-align: left">Thereafter</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">668,015</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-bottom: 2.5pt; text-align: left">Total</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">2,341,855</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company has no
off-balance sheet arrangements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>Inflation</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Management does not
believe that the current levels of inflation in the United Stated have had a significant impact on the operations of the Company.
If current levels of inflations hold steady, management does not believe future operations will be negatively impacted.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><B>Risk Factors</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-variant: small-caps"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-variant: small-caps"><B>Risks
Related To Our Overall Business</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Our growth depends in part on the success
of our strategic relationships with third parties.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We anticipate that
we will continue to depend on relationships with various third parties, including technology and content providers, to grow our
business. Identifying, negotiating and documenting relationships with third parties require significant time and resources, as
does integrating third-party content and technology. Our agreements with technology and content providers and similar third parties
are typically non-exclusive and do not prohibit them from working with our competitors or from offering competing services. Our
competitors may be effective in providing incentives to these parties to favor their solutions or may prevent us from developing
strategic relationships with these parties. In addition, these third parties may not perform as expected under our agreements with
them, and we have had, and may in the future have, disagreements or disputes with these parties, which could negatively affect
our brand and reputation. It is possible that these third parties may not be able to devote the resources we expect to the relationship.
If we are unsuccessful in establishing or maintaining our relationships with these third parties, our ability to compete in the
marketplace or to grow our revenue could be impaired, and our operating results would suffer. Even if we are successful, these
relationships may not result in improved operating results.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>We rely on our foreign employees and
independent contractors.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We rely primarily on
a programmer located in Serbia to manage our application programming interface calls and database management architecture and intend
to rely on programmers in Bosnia to continue to develop our ESP, CRM solutions, social media and online gaming software. The programmers
in Bosnia have sole access to our source code. Overseas operations are inherently more difficult to manage and oversee, and while
management believes that outsourcing the Company's programming work to Serbia and Bosnia is ultimately the most cost-effective
way to develop high-quality products, there is no assurance that we will not experience difficulties with our overseas programmers.
In the event that our programmers fail to deliver high-quality code within the time frames and other parameters needed by the Company,
it may be costly and take significant amounts of time to either resolve the issue with the existing programmers or locate alternate
programmers for the Company. The Company could also lose access to its source code, which could prevent us from continuing our
operations. Any political instability in Serbia or Bosnia may increase this risk.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>We are subject to concentration of revenue/credit
risks.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We rely on two customers
for approximately 60% of our revenues. Our major customer AdCafe accounts for almost half of our revenues. The loss of either of
these accounts will result in a substantial decrease in revenue, but the contract with AdCafe accounts for almost no gross profit
and is used as a &quot;loss leader&quot; to obtain market share in the digital advertising space. However, the loss of our other
major account will have a material impact on profitability.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>We must repay debt in the near future.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We owe $700,000 plus
interest to two shareholders. If we fail to raise additional capital we may not be able to repay this indebtedness when due in
September 2012. This may result in curtailing operations until we are able to repay this amount.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>It may be difficult to predict our financial
performance because our quarterly operating results may fluctuate.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our revenue and operating
results may vary significantly from quarter to quarter due to a variety of factors, many of which are beyond our control. You should
not rely on period-to-period comparisons of our results of operations should not be relied upon as an indication of our future
performance. Our results of operations have fallen below our own forecasts in the past and may also do so in some future periods.
If this happens, the future market price of our common stock may fall significantly. The factors that may affect our quarterly
operating results include, but are not limited to, the following:</P>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: -9pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 9pt"><FONT STYLE="font-family: Symbol">&uml;</FONT></TD><TD STYLE="text-align: justify">our commitment to putting our customers first even if it means forgoing short-term revenue opportunities;</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: -9pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 9pt"><FONT STYLE="font-family: Symbol">&uml;</FONT></TD><TD STYLE="text-align: justify">the cost of investing in our technology infrastructure may be greater than we anticipate;</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: -9pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 9pt"><FONT STYLE="font-family: Symbol">&uml;</FONT></TD><TD STYLE="text-align: justify">our ability to increase our customer base and customer engagement;</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: -9pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 9pt"><FONT STYLE="font-family: Symbol">&uml;</FONT></TD><TD STYLE="text-align: justify">disruptions or outages in our website availability, actual or perceived breaches of privacy, and
compromises of our customer data;</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: -9pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 9pt"><FONT STYLE="font-family: Symbol">&uml;</FONT></TD><TD STYLE="text-align: justify">fluctuations in demand for our advertising solutions or changes in customer contracts;</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: -9pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 9pt"><FONT STYLE="font-family: Symbol">&uml;</FONT></TD><TD STYLE="text-align: justify">changes in our pricing and publisher compensation policies, the pricing and publisher compensation
policies of our competitors, the pricing and publisher compensation policies of our advertiser customers, or the pricing policies
for advertising on the Internet generally;</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: -9pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 9pt"><FONT STYLE="font-family: Symbol">&uml;</FONT></TD><TD STYLE="text-align: justify">our ability to increase sales of our products and solutions to new customers and expand sales of
additional products and solutions to our existing customers;</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: -9pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 9pt"><FONT STYLE="font-family: Symbol">&uml;</FONT></TD><TD STYLE="text-align: justify">fluctuations in sales of different types of advertising, for example, the amount of advertising
sold at higher rates rather than lower rates;</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: -9pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 9pt"><FONT STYLE="font-family: Symbol">&uml;</FONT></TD><TD STYLE="text-align: justify">the size and seasonal variability of our customers' spending;</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: -9pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 9pt"><FONT STYLE="font-family: Symbol">&uml;</FONT></TD><TD STYLE="text-align: justify">the timing and amount of sales and marketing expenses incurred to attract new advertisers;</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: -9pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 9pt"><FONT STYLE="font-family: Symbol">&uml;</FONT></TD><TD STYLE="text-align: justify">the extent to which existing customers renew their agreements with us and the timing and terms
of those renewals;</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: -9pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 9pt"><FONT STYLE="font-family: Symbol">&uml;</FONT></TD><TD STYLE="text-align: justify">the loss of, or a significant reduction in business from, large customers resulting from, among
other factors, the exercise of a cancellation clause within a contract, the non-renewal of a contract or an advertising insertion
order or shifting business to a competitor when the lack of an exclusivity clause exists;</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: -9pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 9pt"><FONT STYLE="font-family: Symbol">&uml;</FONT></TD><TD STYLE="text-align: justify">fluctuations in click, lead, action, impression, and conversion rates;</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: -9pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 9pt"><FONT STYLE="font-family: Symbol">&uml;</FONT></TD><TD STYLE="text-align: justify">fluctuations in the amount of available advertising space, or views, on our networks;</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: -9pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 9pt"><FONT STYLE="font-family: Symbol">&uml;</FONT></TD><TD STYLE="text-align: justify">fluctuations in the cost of online and mobile advertising;</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: -9pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 9pt"><FONT STYLE="font-family: Symbol">&uml;</FONT></TD><TD STYLE="text-align: justify">the timing and costs of expanding our field sales organization and delays or inability in achieving
expected productivity;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: -9pt">&nbsp;</P>

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<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: -9pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 9pt"><FONT STYLE="font-family: Symbol">&uml;</FONT></TD><TD STYLE="text-align: justify">the entrance of new competitors in our market whether by established companies or the entrance
of new companies;</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: -9pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 9pt"><FONT STYLE="font-family: Symbol">&uml;</FONT></TD><TD STYLE="text-align: justify">costs related to acquisitions of technologies or businesses;</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: -9pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 9pt"><FONT STYLE="font-family: Symbol">&uml;</FONT></TD><TD STYLE="text-align: justify">possible impairments of the recorded amounts of goodwill, intangible assets, note receivable or
other long-lived assets;</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: -9pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 9pt"><FONT STYLE="font-family: Symbol">&uml;</FONT></TD><TD STYLE="text-align: justify">the timing and amount of expenses associated with litigation, regulatory investigations or restructuring
activities, including settlement costs and regulatory penalties assessed related to government enforcement actions;</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: -9pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 9pt"><FONT STYLE="font-family: Symbol">&uml;</FONT></TD><TD STYLE="text-align: justify">the adoption of new accounting pronouncements, or new interpretations of existing accounting pronouncements,
that impact the manner in which we account for, measure or disclose our results of operations, financial position or other financial
measures;</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: -9pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 9pt"><FONT STYLE="font-family: Symbol">&uml;</FONT></TD><TD STYLE="text-align: justify">fluctuations in levels of professional services fees or the incurrence of non-recurring costs;</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: -9pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 9pt"><FONT STYLE="font-family: Symbol">&uml;</FONT></TD><TD STYLE="text-align: justify">deterioration in the credit quality of our accounts receivable and an increase in the related provision;</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: -9pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 9pt"><FONT STYLE="font-family: Symbol">&uml;</FONT></TD><TD STYLE="text-align: justify">changes in tax laws or our interpretation of tax laws, changes in our effective income tax rate
or the settlement of certain tax positions with tax authorities as a result of a tax audit;</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: -9pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 9pt"><FONT STYLE="font-family: Symbol">&uml;</FONT></TD><TD STYLE="text-align: justify">macroeconomic conditions in the United States, Europe and Asia; and</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: -9pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 9pt"><FONT STYLE="font-family: Symbol">&uml;</FONT></TD><TD STYLE="text-align: justify">general industry conditions.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Given our short operating
history and the rapidly evolving market of online social media products, our historical operating results may not be useful in
predicting our future operating results. We believe our rapid growth has masked the cyclicality and seasonality of our business.
As our revenue growth rate slows, we expect that the cyclicality and seasonality in our business may become more pronounced and
may in the future cause our operating results to fluctuate. In particular, we expect sales of our marketing solutions to be weaker
in the third quarter of the year as Internet usage during the summer months generally slows.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Expenditures by advertisers
also tend to be cyclical, reflecting overall economic conditions as well as budgeting and buying patterns. Any decline in the economic
prospects of advertisers or the economy generally may alter advertisers' current or prospective spending priorities, or may increase
the time it takes us to close sales with advertisers, and could materially and adversely affect our business, results of operations,
cash flows, and financial condition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>If we fail to effectively manage our
growth, our business and operating results could be harmed. </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We continue to experience
rapid growth in our headcount and operations, which will continue to place significant demands on our management and our operational
and financial infrastructure. As of June 1, 2012, substantially all of our employees had been with us for less than one year. As
we continue to grow, we must effectively integrate, develop and motivate a large number of new employees, and we must maintain
the beneficial aspects of our corporate culture. In particular, we intend to continue to make substantial investments to develop
our games and increase our Internet marketing and advertising revenues. To attract top talent, we have had to offer, and believe
we will need to continue to offer, highly competitive compensation packages before we can validate the productivity of those employees.
The risks of over-hiring or over-compensating and the challenges of integrating a rapidly growing employee base into our corporate
culture are exacerbated by our rapid expansion. Additionally, we may not be able to hire new employees quickly enough to meet our
needs. If we fail to effectively manage our hiring needs and successfully integrate our new hires, our efficiency and ability to
meet our forecasts and our employee morale, productivity and retention could suffer, and our business and operating results could
be adversely affected.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Additionally, if we
do not effectively manage the growth of our business and operations, the quality of our solutions could suffer, which could negatively
affect our brand, operating results and overall business. Further, we have made changes in the past, and will in the future make
changes, to our features, products and services that our customers may not like, find useful or agree with. We may also decide
to discontinue certain features, products or services, or charge for certain features, products or services that are currently
free or increase fees for any of our features, products or services. If customers are unhappy with these changes, they may reduce
or stop using our features, products or services. They may, in addition, choose to take other types of action against us such as
organizing petitions or boycotts focused on our company, our website or any of our services, filing claims with the government
or other regulatory bodies, or filing lawsuits against us. Any of these actions could negatively impact our customer growth and
engagement and our brand, which would harm our business. To effectively manage this growth, we will need to continue to improve
our operational, financial and management controls, and our reporting systems and procedures by, among other things:</P>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: -9pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 9pt"><FONT STYLE="font-family: Symbol">&uml;</FONT></TD><TD STYLE="text-align: justify">improving our information technology infrastructure to maintain the effectiveness of our solutions;</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: -9pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 9pt"><FONT STYLE="font-family: Symbol">&uml;</FONT></TD><TD STYLE="text-align: justify">enhancing information and communication systems to ensure that our employees and offices around
the world are well-coordinated and can effectively communicate with each other and our growing base of customers, enterprises and
professional organizations;</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: -9pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 9pt"><FONT STYLE="font-family: Symbol">&uml;</FONT></TD><TD STYLE="text-align: justify">enhancing our internal controls to ensure timely and accurate reporting of all of our operations;
and</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: -9pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 9pt"><FONT STYLE="font-family: Symbol">&uml;</FONT></TD><TD STYLE="text-align: justify">appropriately documenting our information technology systems and our business processes.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">These systems enhancements
and improvements will require significant capital expenditures and allocation of valuable management and employee resources. If
we fail to implement these improvements effectively, our ability to manage our expected growth and comply with the rules and regulations
that are applicable to publicly reporting companies will be impaired.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Failures of the third-party hardware,
software and infrastructure on which we rely, including third-party data center hosting facilities, could impair the delivery of
our solutions and adversely affect our business. </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We rely on computer
hardware purchased and software licensed from third parties in order to offer our products. This hardware and software may not
continue to be available on commercially reasonable terms, or at all. If we lose the right to use any of this hardware or software
or such hardware or software malfunctions, our customers could experience delays or be unable to access our services until we can
obtain and integrate equivalent technology or repair the cause of the malfunctioning hardware or software. Any delays or failures
associated with our services could upset our customers and harm our business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We rely on bandwidth
providers, ISPs, mobile providers and social networks to deliver messages to consumers on behalf of our clients. Any errors or
defects in third-party hardware, software or infrastructure could result in errors, interruptions or a failure of our solutions.
Furthermore, this hardware, software and infrastructure may not continue to be available on commercially reasonable terms, or at
all. The loss of the right to use any of this hardware, software or infrastructure could limit access to our solutions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We currently serve
our clients from 6 third-party data center hosting facilities located primarily on the East Coast and Midwest. Although our network
infrastructure is generally redundant in each of our data centers, our data storage and operational capabilities are not fully
redundant across data centers. The owners and operators of these facilities do not guarantee that our clients' access to our solutions
will be uninterrupted, error-free or secure. We do not control the operation of these facilities, and such facilities are vulnerable
to damage or interruption from a tornado, earthquake, fire, cyber-attack, terrorist attack, power loss, telecommunications failure
or similar catastrophic events. They also could be subject to break-ins, computer viruses, sabotage, intentional acts of vandalism
and other misconduct. The occurrence of a natural disaster or an act of terrorism, a decision to close the facilities without adequate
notice or other unanticipated problems could result in lengthy interruptions in the delivery of our solutions. If for any reason
our arrangement with one or more of the third-party data centers we use is terminated, we could incur additional expense in arranging
for new facilities and support. In addition, the failure of the data centers to meet our capacity requirements could result in
interruptions in the availability of our solutions or impair the functionality of our solutions, which could adversely affect our
business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Errors, defects, disruptions
or other performance problems with the delivery of our suite of cross-channel, interactive marketing solutions may reduce our revenue,
harm our reputation and brand and adversely affect our contract renewals and our ability to attract new clients. In addition, some
of our client agreements require us to issue credits for downtime in excess of certain thresholds, and in some instances give our
clients the ability to terminate the agreements in the event of significant amounts of downtime. Our business, growth prospects
and operating results will also be harmed if our clients and potential clients are not confident that our solutions are reliable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As we add data centers
and increase capacity in data centers to accommodate increased demand, our costs and expenses associated with these efforts may
adversely affect our operating results, liquidity and financial condition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Programming errors or flaws in our products
could harm our reputation or decrease market acceptance of our products, which would harm our operating results.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our products (particularly
our apps and games) may contain errors, bugs, flaws or corrupted data, and these defects may only become apparent after their launch,
particularly as we launch new products and rapidly release new features to existing products under tight time constraints. We believe
that if our customers and users have a negative experience with our products, they may be less inclined to continue or resume using
our products or recommend our products to other potential customers and users. Undetected programming errors, product defects and
data corruption can disrupt our operations, adversely affect the experience of our users, harm our reputation, cause our customers
to stop using our products, divert our resources and delay market acceptance of our products, any of which could result in legal
liability to us or harm our operating results.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Many individuals are using devices other
than personal computers to access the Internet. If users of these devices do not widely adopt solutions we develop for these devices,
our business could be adversely affected. </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The number of people
who access the Internet through devices other than personal computers, including mobile telephones, personal digital assistants,
smart phones and handheld tablets or computers, has increased dramatically in the past few years and is projected to continue to
increase. If we are unable to develop mobile solutions to meet the needs of our users, our business could suffer. Additionally,
as new devices and new platforms are continually being released, it is difficult to predict the problems we may encounter in developing
versions of our solutions for use on these alternative devices, and we may need to devote significant resources to the creation,
support, and maintenance of such devices.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Enterprises or professional organizations,
including governmental agencies, may restrict access to our website, which could lead to the loss or slowing of growth in our customer
or user base, or the level of user engagement.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our solutions depend
on the ability of our users and customers to access the Internet and our websites. Enterprises or professional organizations, including
governmental agencies, could block access to our websites or the Internet generally for a number of reasons such as security or
confidentiality concerns or regulatory reasons, or block or limit access to our websites, the value of our network could be negatively
impacted, which would adversely affect our ability to offer subscriptions to our users, enterprises, professional organizations
and customers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>If we lose the services of any members
of our senior management team, we may not be able to execute our business strategy. </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our success depends
in a large part upon the continued service of our senior management team. In particular, our co-founder and Chief Executive Officer,
Chris Richarde, is critical to our vision, strategic direction, culture, products and technology. Our Chief Technical Officer,
Dzenis Softic, is critical to the development of all our intellectual property. Mirco Pasqulaini, Xhibit's Digital Creative Architect,
is also critically important as he assists Dzenis Softic and the team of Bosnian programmers that develop all of the Company's
products. We do not maintain key-man insurance for Mr. Richarde, Mr. Pasqulaini, Mr. Softic, or any other member of our senior
management team. All three of these members of Xhibit's management team have at-will employment agreements with NB, Xhibit, or
one of its subsidiaries, and can leave at any time. The loss of Mr. Richarde, Mr. Softic, or Mr. Pasqulaini, even temporarily,
or any other member of senior management would harm our business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>We depend on world class talent to grow
and operate our business, and if we are unable to hire, retain and motivate our personnel, we may not be able to grow effectively.
</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our future success
will depend upon our continued ability to identify, hire, develop, motivate and retain world class talent. Our ability to execute
efficiently is dependent upon contributions from all of our employees, in particular our senior management team. Key institutional
knowledge remains with a small group of employees whom we may not be able to retain. We may not be able to retain the services
of any of our key employees or members of senior management in the future. We only have at-will employment agreements with our
key employees, and we do not maintain key person life insurance for any employee. In addition, from time to time, there may be
changes in our senior management team that may be disruptive to our business. If our senior management team, including any new
hires that we may make, fails to work together effectively and to execute our plans and strategies on a timely basis, our business
could be harmed.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our growth strategy
also depends on our ability to expand and retain our organization with world class talent. Identifying, recruiting, training and
integrating qualified individuals will require significant time, expense and attention. In addition to hiring new employees, we
must continue to focus on retaining our best talent. Competition for highly skilled technical and marketing personnel is extremely
intense, and we continue to face difficulty identifying and hiring qualified personnel in many areas of our business. We may not
be able to hire and retain such personnel at compensation levels consistent with our existing compensation and salary structure.
Many of the companies with which we compete for experienced employees have greater resources than we have and may be able to offer
more attractive terms of employment. In particular, candidates making employment decisions, particularly in high-technology industries,
often consider the value of any equity they may receive in connection with their employment. Any significant volatility in the
price of our equity may adversely affect our ability to attract or retain highly skilled technical and marketing personnel. If
we are not able to effectively increase and retain our talent, our ability to achieve our strategic objectives will be adversely
impacted, and our business will be harmed.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Our business will suffer if we are unable
to successfully integrate acquired companies into our business or otherwise manage the growth associated with multiple acquisitions.
</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have acquired businesses,
personnel and technologies in the past and we intend to continue to pursue acquisitions that are complementary to our existing
business and expand our employee base and the breadth of our offerings. Our ability to grow through future acquisitions will depend
on the availability of suitable acquisition and investment candidates at an acceptable cost, our ability to compete effectively
to attract these candidates and the availability of financing to complete larger acquisitions. Since we expect our industry to
consolidate in the future, we may face significant competition in executing our growth strategy. Future acquisitions or investments
could result in potential dilutive issuances of equity securities, use of significant cash balances or incurrence of debt, contingent
liabilities or amortization expenses related to goodwill and other intangible assets, any of which could adversely affect our financial
condition and results of operations. The benefits of an acquisition or investment may also take considerable time to develop, and
we cannot be certain that any particular acquisition or investment will produce the intended benefits.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-variant: small-caps"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-variant: small-caps"><B>Risks
Related To Our Advertising Business</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>The market for cross-channel, interactive
marketing solutions is relatively new and emerging. If the market develops more slowly or differently than we expect, our business,
growth prospects and financial condition would be adversely affected. </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The market for cross-channel,
interactive marketing solutions, such as ours, is relatively new and may not achieve or sustain high levels of demand and market
acceptance. While email has been used successfully for interactive marketing for several years, marketing via new interactive marketing
channels such as mobile and social media is not as well established, and revenue from email represents a substantial majority of
our total revenue. The future growth of our business depends both on the acceptance and expansion of emerging interactive marketing
channels, as well as the continued use and growth of existing interactive marketing channels, including email. Even if interactive
marketing through these channels becomes widely adopted, our suite of cross-channel, interactive marketing solutions may not continue
to be utilized by our existing clients or we may not acquire new clients. Organizations may not make significant investments in
cross-channel, interactive marketing solutions and may not purchase solutions to address their interactive marketing needs. If
cross-channel, interactive marketing solutions are not widely adopted, or the market for such solutions does not develop as we
expect, our business, growth prospects and financial condition would be adversely affected.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>We may not be able to scale our infrastructure
quickly enough to meet our clients' growing needs and, even if we can, our operations may be disrupted or our operating results
could be harmed. </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As usage of our suite
of cross-channel, interactive marketing solutions grows and as clients use our solutions for more advanced interactive marketing
programs, we will need to devote additional resources to improving our application architecture and our infrastructure to maintain
our solutions' performance. Any failure of or delays in our systems could cause service interruptions or impaired system performance.
If sustained or repeated, these performance issues could reduce the attractiveness of our solutions to clients, result in decreased
sales to new clients and lower renewal rates by existing clients, which could hurt our revenue growth and our reputation. We also
may need to expand our hosting operations at a more rapid pace than we have in the past. This would involve spending substantial
amounts to purchase or lease data center capacity and equipment, upgrade our technology and infrastructure and introduce new solutions.
Similarly, our international expansion efforts could require us to use data centers located outside the United States. We may not
be able to scale our existing systems in a manner that is satisfactory to our existing or prospective clients. In addition, any
such expansion will require management time and support, could be expensive and complex, could result in inefficiencies, unsuccessful
data transfers or operational failures, could reduce our margins and could adversely impact our financial results. Moreover, there
are inherent risks associated with upgrading, improving and expanding our information technology systems. We cannot be sure that
the improvements to our infrastructure and systems will be fully or effectively implemented on a timely basis, if at all.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>



<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Our revenue could decline if we fail
to effectively manage our existing advertising space, and our growth could be impeded if we fail to acquire new advertising space.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our success depends
in part on our ability to effectively manage our existing advertising space as well as successfully access advertising space available
on ad exchanges and through ad network optimization service providers. The Web publishers and mobile application developers that
list their unsold advertising space with us are not bound by long-term contracts that ensure us a consistent supply of advertising
space, which we refer to as inventory. All of our contracts can either be terminated immediately or upon thirty (30) days notice.
In addition, Web publishers and mobile application developers can change the amount of inventory they make available to us at any
time. If a Web publisher or mobile application developer decides not to make advertising space from its websites available to us,
we may not be able to replace this advertising space with advertising space from other sources that have comparable traffic patterns
and user demographics quickly enough to fulfill our advertisers' requests. This would result in lost revenue.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>If we do not continue to attract new
customers, or if existing customers do not renew their subscriptions, renew on less favorable terms, or fail to purchase additional
solutions, we may not achieve our revenue projections, and our operating results would be harmed. </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In order to grow our
business, we must continually attract new customers, sell additional solutions to existing customers and reduce the level of non-renewals
in our business. Our ability to do so depends in large part on the success of our sales and marketing efforts. We do not typically
enter into long-term contracts with our customers, and even when we do, they can generally terminate their relationship with us.
We have limited historical data with respect to rates of customer renewals, upgrades and expansions, so we may not accurately predict
future trends for any of these metrics. Furthermore, unlike traditional software companies, the nature of our products and solutions
is such that customers may decide to terminate or not renew their agreements with us without causing significant disruptions to
their own businesses.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We must demonstrate
that our marketing solutions provide our advertising and email marketing with access to an audience of one of the most influential
audiences on the Internet.&nbsp;However, potential customers may not be familiar with our solutions or may prefer other more traditional
products and services for their advertising and marketing needs.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The rate at which we
expand our customer base or increase our customers' renewal rates may decline or fluctuate because of several factors, including
the prices of our solutions, the prices of products and services offered by our competitors, or reductions in their marketing spending
levels due to macroeconomic or other factors and the efficacy and cost-effectiveness of our solutions. If we do not attract new
customers or if our customers do not renew their agreements for our solutions, renew on less favorable terms, or do not purchase
additional functionality or offerings, our revenue may grow more slowly than expected or decline.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Ultimately, attracting
new customers and retaining existing customers requires that we continue to provide high quality solutions that our customers value.
In particular, customers of our marketing solutions will not continue to do business with us if their advertisements do not reach
their intended audiences. Therefore we must continue to demonstrate to our customers that using our marketing solutions is the
most effective and cost-efficient way to maximize their results. Even if our marketing solutions are providing value to our customers,
advertisers are sensitive to general economic downturns and reductions in consumer spending, among other events and trends, which
generally results in reduced advertising expenditures and could adversely affect sales of our marketing solutions. If we fail to
provide high quality solutions and convince customers of our value proposition, we may not be able to retain existing customers
or attract new customers, which would harm our business and operating results.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Our business is partially dependent
on the market for email marketing services. </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We derive, and expect
to continue to derive, a significant portion of our revenue from our email marketing product. As a result, widespread acceptance
of email marketing among our target organizations is critical to our future growth and success. The overall market for email marketing
and related services is relatively new and still evolving, and smaller organizations have generally been slower than larger organizations
to adopt email marketing as part of their marketing mix. There is no certainty regarding how or whether this market will develop,
or whether it will experience any significant contractions. Our ability to attract and retain customers will depend in part on
our ability to make email marketing convenient, effective and affordable. If smaller organizations determine that email marketing
does not sufficiently benefit them, existing customers may cancel their accounts and new customers may decide not to adopt email
marketing. In addition, many smaller organizations lack the technical expertise to effectively send email marketing campaigns.
As technology advances, however, smaller organizations may establish the capability to manage their own email marketing and therefore
have no need for our email marketing product. If the market for email marketing services fails to grow or grows more slowly than
we currently anticipate, demand for our services may decline and our revenue would suffer.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>If the delivery of our customers' emails
is limited or blocked, the fees we may be able to charge for our email marketing product may not be accepted by the market and
customers may cancel their accounts. </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">ISPs can block emails
from reaching their users. Recent releases of ISP software and the implementation of stringent new policies by ISPs make it more
difficult to deliver our customers' marketing emails. We continually improve our own technology and work closely with ISPs to maintain
our deliverability rates. If ISPs materially limit or halt the delivery of our customers' emails, or if we fail to deliver our
customers' emails in a manner compatible with ISPs' email handling or authentication technologies, then the fees we charge for
our email marketing product may not be accepted by the market, and customers may cancel their accounts.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Various private spam blacklists have
in the past interfered with, and may in the future interfere with, the effectiveness of our products and our ability to conduct
business. </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We depend on email
to market to and communicate with our email marketing customers, and our email marketing customers rely on email to communicate
with their constituents. Various private entities attempt to regulate the use of email for commercial solicitation. These entities
often advocate standards of conduct or practice that significantly exceed current legal requirements and classify certain email
solicitations that comply with current legal requirements as spam. Some of these entities maintain &quot;blacklists&quot; of companies
and individuals, and the websites, ISPs and Internet protocol addresses associated with those companies or individuals, that do
not adhere to those standards of conduct or practices for commercial email solicitations that the blacklisting entity believes
are appropriate. If a company's Internet protocol addresses are listed by a blacklisting entity, emails sent from those addresses
may be blocked if they are sent to any Internet domain or Internet address that subscribes to the blacklisting entity's service
or purchases its blacklist.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Some of our Internet
protocol addresses currently are listed with one or more blacklisting entities and, in the future, our Internet protocol addresses
may also be listed with these and other blacklisting entities. There can be no guarantee that we will not continue to be blacklisted
or that we will be able to successfully remove ourselves from those lists. Blacklisting of this type could interfere with our ability
to market our products and services and communicate with our customers and could undermine the effectiveness of our customers'
email marketing campaigns, all of which could have a material negative impact on our business and results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>If we fail to compete effectively against
other Internet advertising companies, we could lose customers or advertising inventory and our revenue and results of operations
could decline.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Internet advertising
markets are characterized by rapidly changing technologies, evolving industry standards, frequent new product and service introductions,
and changing customer demands. The introduction of new products and services embodying new technologies and the emergence of new
industry standards and practices could render our existing products and services obsolete and unmarketable or require unanticipated
technology or other investments. Our failure to adapt successfully to these changes could harm our business, results of operations
and financial condition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The market for Internet
advertising and related products and services is highly competitive. We expect this competition to continue to increase, in part
because there are no significant barriers to entry to our industry. Increased competition may result in price reductions for advertising
space, reduced margins and loss of market share. Competitors in the ad network, ad agency and performance-based marketing arena
include but are not limited to: Omnicom Group, WPP Group, Interpublic Group of Companies, Publicis Groupe, Dentsu, Havas Suresnes,
Aegis Group, Hakuhodo DY Holdings, Asatsu-DK, MDC Partners, Sapient, Digitas, aQuantive, Aspen Marketing Services, Cheil Communications,
Monster Worldwide, WB Doner &amp; Company, Cossette Communication Group. Richards Group, Bartle Bogle Hegarty, M&amp;C Saatchi,
Chime Communications, Merkle Lanham, Wieden+Kennedy, RPA, Cramer-Krasselt, ChoicePoint Precision Marketing, XL Marketing, AdConian
Direct, and ValueClick Media.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our principal competitors
include other companies that provide advertisers with performance-based Internet advertising solutions and companies that offer
pay-per-click search services. We compete in the performance-based marketing division with CPL and CPA performance-based companies,
and with other large Internet display advertising networks. In addition, we compete in the online comparison shopping market with
focused comparison shopping websites, and with search engines and portals such as Yahoo!, Google and MSN, and with online retailers
such as Amazon.com and eBay. Large websites with brand recognition, such as Yahoo!, Google, Facebook, AOL and MSN, have substantial
proprietary online advertising inventory that may provide competitive advantages compared to our networks and other inventory sources,
and they have the ability to significantly influence pricing for online advertising overall. These companies have longer operating
histories, greater name recognition and have greater financial, technical, sales, and marketing resources than we have.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Competition for advertising
placements among current and future suppliers of Internet navigational and informational services, high-traffic websites and Internet
service providers (&quot;ISPs&quot;), as well as competition with other media for advertising placements, could result in significant
price competition, declining margins and reductions in advertising revenue. In addition, as we continue our efforts to expand the
scope of our Web services, we may compete with a greater number of Web publishers and other media companies across an increasing
range of different Web services, including in vertical markets where competitors may have advantages in expertise, brand recognition
and other areas. If existing or future competitors develop or offer products or services that provide significant performance,
price, creative, or other advantages over those offered by us, our business, results of operations and financial condition could
be negatively affected. We also compete with traditional advertising media, such as direct mail, television, radio, cable, and
print, for a share of advertisers' total advertising budgets. Many current and potential competitors enjoy competitive advantages
over us, such as longer operating histories, greater name recognition, larger customer bases, greater access to advertising space
on high-traffic websites, and significantly greater financial, technical, sales, and marketing resources. As a result, we may not
be able to compete successfully. If we fail to compete successfully, we could lose customers or advertising inventory and our revenue
and results of operations could decline.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-variant: small-caps"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-variant: small-caps"><B>Risks
Related To Our Social Media And Gaming Business</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Integrating Social Bounce LLC and its
social media applications with the Company's other operations may pose challenges to the Company.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Xhibit recently acquired
Social Bounce LLC, a company that is developing a social media platform of games as well as a social media platform that connects
users with celebrities. While our management overlaps with the management of Bounce, there is no assurance that we will be successful
in making Bounce part of our Company. We need to integrate Bounce's current and proposed operations with our historical focus on
Internet marketing and advertising through our other operating subsidiaries. Any diversion of management's time and attention to
these new products, which is expected to occur, may cause revenues from our Internet marketing and advertising divisions to decline.
If new revenue from Social Bounce does not offset such a decline, then the Company's overall revenue may decline.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>With respect to our social media operations,
we have a short operating history in a new and unproven market, which makes it difficult to evaluate our future prospects and may
increase the risk that we will not be successful. </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have a short operating
history in a new and unproven market that may not develop as expected, if at all.&nbsp;This short operating history makes it difficult
to effectively assess our future prospects.&nbsp;Our business and prospects should be considered in light of the risks and difficulties
we encounter in this rapidly evolving market.&nbsp;These risks and difficulties include our ability to, among other things:</P>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: -9pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 12pt"><FONT STYLE="font-family: Symbol">&uml;</FONT></TD><TD STYLE="text-align: justify">increase our number of customers and customer engagement;</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: -9pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 12pt"><FONT STYLE="font-family: Symbol">&uml;</FONT></TD><TD STYLE="text-align: justify">avoid interruptions or disruptions in our service or slower than expected website load times;</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: -9pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 12pt"><FONT STYLE="font-family: Symbol">&uml;</FONT></TD><TD STYLE="text-align: justify">develop a scalable, high-performance technology infrastructure that can efficiently and reliably
handle increased customer usage globally, as well as the deployment of new features and products;</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: -9pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 12pt"><FONT STYLE="font-family: Symbol">&uml;</FONT></TD><TD STYLE="text-align: justify">responsibly use the data that our customers share with us to provide solutions that meet the needs
of our customers;</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: -9pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 12pt"><FONT STYLE="font-family: Symbol">&uml;</FONT></TD><TD STYLE="text-align: justify">increase revenue from the solutions we provide;</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: -9pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 12pt"><FONT STYLE="font-family: Symbol">&uml;</FONT></TD><TD STYLE="text-align: justify">continue to earn and preserve our customers' trust with respect to their information;</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: -9pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 12pt"><FONT STYLE="font-family: Symbol">&uml;</FONT></TD><TD STYLE="text-align: justify">process, store and use personal data in compliance with governmental regulation and other legal
obligations related to privacy;</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: -9pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 12pt"><FONT STYLE="font-family: Symbol">&uml;</FONT></TD><TD STYLE="text-align: justify">successfully compete with other companies that are currently in, or may in the future enter, the
online marketing and social media spaces;</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: -9pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 12pt"><FONT STYLE="font-family: Symbol">&uml;</FONT></TD><TD STYLE="text-align: justify">hire, integrate and retain world class talent; and</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: -9pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 12pt"><FONT STYLE="font-family: Symbol">&uml;</FONT></TD><TD STYLE="text-align: justify">successfully expand our business, especially internationally.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If the market for the
Company's new focus of online social media does not develop as we expect, or if we fail to address the needs of this market, our
business will be harmed.&nbsp;We may not be able to successfully address these risks and difficulties or others, including those
described elsewhere in these risk factors.&nbsp;Failure to adequately address these risks and difficulties could harm our business
and cause our operating results to suffer.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>We may not timely and effectively scale
and adapt our existing technology and network infrastructure to ensure that our social media websites are accessible within an
acceptable load time. </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">A key element to our
continued growth is the ability of our users (whom we define as anyone who visits our websites, regardless of whether or not they
are a paying customer) in all geographies to access our websites within acceptable load times. We call this website performance.
We have experienced, and may in the future experience, website disruptions, outages and other performance problems due to a variety
of factors, including infrastructure changes, human or software errors, capacity constraints due to an overwhelming number of users
accessing our websites simultaneously, and denial of service or fraud or security attacks. In some instances, we may not be able
to identify the cause or causes of these website performance problems within an acceptable period of time. It may become increasingly
difficult to maintain and improve our website performance, especially during peak usage times and as our solutions become more
complex and our user traffic increases. If our websites are unavailable when users attempt to access them or do not load as quickly
as they expect, users may seek other websites to obtain the information for which they are looking, and may not return to our websites
as often in the future, or at all. This would negatively impact our ability to attract users and increase engagement on our website.
We expect to continue to make significant investments to maintain and improve website performance and to enable rapid releases
of new features and products. 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 harmed.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>We expect the number of our registered
social media users to be higher than the number of actual users, and the majority of our page views to be generated by a minority
of our users. </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The number of registered
users in our social media network is likely to be higher than the number of actual users because some users may have multiple registrations,
other users have died or become incapacitated, and others may have registered under fictitious names. Given the challenges inherent
in identifying these accounts, we will not have a reliable system to accurately identify the number of actual users, and thus we
rely on the number of registered users as our measure of the size of our network. Further, a substantial amount of our users may
not visit our website on a monthly basis, and a substantial majority of our page views are likely to be generated by a minority
of our users. If the number of our actual users does not meet our expectations or we are unable to increase the breadth and frequency
of our visiting users, then our business may not grow as fast as we expect, which will harm our operating and financial results.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Changes in how we generate online consumer
traffic for our social media websites could negatively impact our ability to maintain or grow the revenue and profitability levels
of this division.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We generate online
consumer traffic for our destination websites using various methods, including: search engine marketing (SEM); search engine optimization
(SEO); organic traffic; email campaigns; and distribution agreements with other website publishers. The revenue of this division
of our operations are dependent upon our continued ability to use a combination of these methods to generate online consumer traffic
to our websites in a cost-efficient manner. Our SEM and SEO techniques have been developed to work with the existing search algorithms
utilized by the major search engines. The major search engines frequently modify their search algorithms. Future changes in these
search algorithms could change the mix of the methods we use to generate online consumer traffic for our destination websites and
could negatively impact our ability to generate such traffic in a cost-efficient manner, which could result in a significant reduction
to the revenue of this division. If search engine companies modify their search algorithms in ways that are detrimental to our
new user growth or in ways that make it harder for our users to use our websites, or if our competitors' SEO efforts are more successful
than ours, overall growth in our users base could slow, user engagement could decrease, and we could lose existing users. These
modifications may be prompted by search engine companies entering the online social media market or aligning with competitors.
There can be no assurances that we will be able to maintain the current mix of online consumer traffic sources for our destination
websites or that we will be able to modify our SEM and SEO techniques to address any future search algorithm changes made by the
major search engines.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>If we are unable to maintain a good
relationship with Facebook, our business will suffer. </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Facebook is planned
to be the primary distribution, marketing, promotion and payment platform for our games under development to users beyond the contacts
we have from our advertising division. We expect to generate a substantial portion of our game revenue and players through the
Facebook platform and expect to continue to do so for the foreseeable future. Any deterioration in our relationship with Facebook
would harm our business and adversely affect the value of our equity.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We are subject to Facebook's
standard terms and conditions for application developers, which govern the promotion, distribution and operation of games and other
applications on the Facebook platform.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our business would
be harmed if:</P>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: -9pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 12pt"><FONT STYLE="font-family: Symbol">&uml;</FONT></TD><TD STYLE="text-align: justify">Facebook discontinues or limits access to its platform by us and other game developers;</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: -9pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 12pt"><FONT STYLE="font-family: Symbol">&uml;</FONT></TD><TD STYLE="text-align: justify">Facebook modifies its terms of service or other policies, including fees charged to, or other restrictions
on, us or other application developers, or Facebook changes how the personal information of its users is made available to application
developers on the Facebook platform or shared by users;</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: -9pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 12pt"><FONT STYLE="font-family: Symbol">&uml;</FONT></TD><TD STYLE="text-align: justify">Facebook establishes more favorable relationships with one or more of our competitors; or</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: -9pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 12pt"><FONT STYLE="font-family: Symbol">&uml;</FONT></TD><TD STYLE="text-align: justify">Facebook develops its own competitive offerings.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We expect to benefit
from Facebook's strong brand recognition and large user base. If Facebook loses its market position or otherwise falls out of favor
with Internet users, we would need to identify alternative channels for marketing, promoting and distributing our games, which
would consume substantial resources and may not be effective. In addition, Facebook has broad discretion to change its terms of
service and other policies with respect to us and other developers, and those changes may be unfavorable to us. For example, in
2010 Facebook adopted a policy requiring applications on Facebook accept only its virtual currency, Facebook Credits, as payment
from users. As a result of this change, Facebook will receive a greater share of payments made by our players than it would when
other payment options were allowed. Facebook may also change its fee structure, add fees associated with access to and use of the
Facebook platform, change how the personal information of its users is made available to application developers on the Facebook
platform or restrict how Facebook users can share information with friends on their platform. Beginning in early 2010, Facebook
changed its policies for application developers regarding use of its communication channels. These changes limited the level of
communication among users about applications on the Facebook platform. As a result, the number of other game developers' players
on Facebook declined. Any such changes in the future could significantly alter how players experience our games or interact within
our games, which may harm our business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We intend to take steps
to reduce our reliance on Facebook in the future, but there can be no assurance that we will be successful in doing so.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>If our security measures are compromised,
or if our website is subject to attacks that degrade or deny the ability of customers to access our solutions, customers may curtail
or stop use of our solutions.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our solutions involve
the storage and transmission of customers' information, some of which may be private, and security breaches could expose us to
a risk of loss of this information, which could result in potential liability and litigation. Like all websites, our websites are
vulnerable to computer viruses, break-ins, phishing attacks, attempts to overload our servers with denial-of-service or other attacks
and similar disruptions from unauthorized use of our computer systems, any of which could lead to interruptions, delays, or website
shutdowns, causing loss of critical data or the unauthorized disclosure or use of personally identifiable or other confidential
information. If we experience compromises to our security that result in website performance or availability problems, the complete
shutdown of our websites, or the loss or unauthorized disclosure of confidential information, our customers may lose trust and
confidence in us, and decrease the use of our websites or stop using our websites in their entirety. Further, outside parties may
attempt to fraudulently induce employees or customers to disclose sensitive information in order to gain access to our information
or our customers' information. Because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage
systems change frequently, often are not recognized until launched against a target and may originate from less regulated and remote
areas around the world, we may be unable to proactively address these techniques or to implement adequate preventative measures.
Any or all of these issues could negatively impact our ability to attract new users and increase engagement by existing users,
cause existing users to close their accounts or existing customers to cancel their contracts, subject us to third-party lawsuits,
regulatory fines or other action or liability, thereby harming our operating results.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>The proliferation of &quot;cheating&quot;
programs and scam offers that seek to exploit online games and players affects the game-playing experience and may lead players
to stop playing our games.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Unrelated third parties
have developed, and may continue to develop, &quot;cheating&quot; programs that enable players to exploit online and mobile games,
play them in an automated way or obtain unfair advantages over other players who do play fairly. These programs harm the experience
of players who play fairly and may disrupt the virtual economy of our games. In addition, unrelated third parties may attempt to
scam our players with fake offers for virtual goods. We plan to devote resources to discover and disable these programs and activities,
but if we are unable to do so quickly our operations may be disrupted, our reputation damaged and players may stop playing our
games. This may lead to lost revenue from paying players, increased cost of developing technological measures to combat these programs
and activities, legal claims relating to the diminution in value of our virtual currency and goods, and increased customer service
costs needed to respond to dissatisfied players.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>We must launch and enhance games that
attract and retain a significant number of players in order to grow our revenue. </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our future growth in
the online social gaming division depends on our ability to consistently launch new games that achieve significant popularity.
Each of our games will require significant engineering, marketing and other resources to develop, launch and sustain via regular
upgrades and expansions. Our ability to successfully launch, sustain and expand games and attract and retain players largely depends
on our ability to:</P>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: -9pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 12pt"><FONT STYLE="font-family: Symbol">&uml;</FONT></TD><TD STYLE="text-align: justify">anticipate and effectively respond to changing game player interests and preferences;</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: -9pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 12pt"><FONT STYLE="font-family: Symbol">&uml;</FONT></TD><TD STYLE="text-align: justify">anticipate or respond to changes in the competitive landscape;</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: -9pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 12pt"><FONT STYLE="font-family: Symbol">&uml;</FONT></TD><TD STYLE="text-align: justify">attract, retain and motivate talented game designers, product managers and engineers;</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: -9pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 12pt"><FONT STYLE="font-family: Symbol">&uml;</FONT></TD><TD STYLE="text-align: justify">develop, sustain and expand games that are fun, interesting and compelling to play;</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: -9pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 12pt"><FONT STYLE="font-family: Symbol">&uml;</FONT></TD><TD STYLE="text-align: justify">effectively market new games and enhancements to our existing players and new players;</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: -9pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 12pt"><FONT STYLE="font-family: Symbol">&uml;</FONT></TD><TD STYLE="text-align: justify">minimize launch delays and cost overruns on new games and game expansions;</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: -9pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 12pt"><FONT STYLE="font-family: Symbol">&uml;</FONT></TD><TD STYLE="text-align: justify">minimize downtime and other technical difficulties; and</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: -9pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 12pt"><FONT STYLE="font-family: Symbol">&uml;</FONT></TD><TD STYLE="text-align: justify">acquire high quality assets, personnel and companies.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">It is difficult to
consistently anticipate player demand on a large scale, particularly as we develop new games in new genres or new markets, including
international markets and mobile platforms. If we do not successfully launch games that attract and retain a significant number
of players and extend the life of our existing games, our market share, reputation and financial results will be harmed.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>If our top games do not maintain their
popularity, our results of operations could be harmed. </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition to creating
new games that are attractive to a significant number of players, we must extend the life of our games, in particular our most
successful games. For a game to remain popular, we must constantly enhance, expand or upgrade the game with new features that players
find attractive. Such constant enhancement requires the investment of significant resources, particularly with older games and
such costs are expected to increase. We may not be able to successfully enhance, expand or upgrade our games. Any reduction in
the number of players of our most popular games, any decrease in the popularity of our games or social games in general, any breach
of game-related security or prolonged server interruption, any loss of rights to any intellectual property underlying such games,
or any other adverse developments relating to our most popular games, could harm our results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>There are low barriers to entry in the
social media industry and online gaming industry, and competition is intense. </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The social media industry
and online gaming industry is highly competitive, with low barriers to entry and we expect more companies to enter the sector and
a wider range of social media sites to be introduced. Our competitors that develop social networks vary in size and include Google,
Twitter, Microsoft, Facebook, Pinterest, Groupon, LivingSocial, Zynga, Inc., Crowdstar, Inc., Electronic Arts Inc., The Walt Disney
Company, Vostu, Ltd. and wooga GmbH. In addition, high-profile companies with significant online presences that to date have not
developed social networks, such as Amazon.com, Microsoft Corporation and Yahoo! Inc., may decide to develop social networks. Some
of these current and potential competitors have significant resources for developing or acquiring networks, may be able to incorporate
their own strong brands and assets into their networks, have a more diversified set of revenue sources than we do and may be less
severely affected by changes in consumer preferences, regulations or other developments that may impact the online social media
industry. In addition, we have limited experience in developing networks for mobile and other platforms and our ability to succeed
on those platforms is uncertain. As we continue to devote significant resources to developing networks as well as games for those
platforms, we will face significant competition from established companies that may have far greater experience than us, including
(in the online social game industry) Electronic Arts Inc., DeNA Co. Ltd., Gameloft SA, Glu Mobile Inc. and Rovio Mobile Ltd. We
expect new competitors to enter the market and existing competitors to allocate more resources to develop and market competing
applications.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Competition within the broader entertainment
industry is intense and our existing and potential players may be attracted to competing forms of entertainment such as offline
and traditional online games, television, movies and sports, as well as other entertainment options on the Internet. </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our online gaming players
will face a vast array of entertainment choices. Other forms of entertainment such as offline, traditional online, personal computer
and console games, television, movies, sports and the Internet are much larger and more well-established markets and may be perceived
by our players to offer greater variety, affordability, interactivity and enjoyment. These other forms of entertainment compete
for the discretionary time and income of our players. If we are unable to sustain sufficient interest in our games in comparison
to other forms of entertainment, including new forms of entertainment, our business model may no longer be viable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-variant: small-caps"><B>&nbsp;</B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-variant: small-caps"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-variant: small-caps"><B>Risks
Related To Government Regulation, Potential Litigation And Our Intellectual Property</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Government enforcement actions, changes
in government regulation, technical proposals and industry standards, including, but not limited to, spyware, privacy and email
matters, could decrease demand for our products and services and increase our costs of doing business. </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Laws and regulations
that apply to Internet communications, commerce and advertising are becoming more prevalent. These regulations could affect the
costs of communicating on the Web and could adversely affect the demand for our advertising solutions or otherwise harm our business,
results of operations and financial condition. The United States Congress has also enacted Internet legislation regarding children's
privacy, copyrights, sending of commercial email (e.g., the Federal CAN-SPAM Act of 2003 and the Digital Millennium Copyright Act),
and taxation. The United States Congress has passed legislation regarding spyware (i.e., H.R. 964, the &quot;Spy Act of 2007&quot;)
and the New York Attorney General's office has also pursued enforcement actions against companies in this industry. In addition,
on December 1, 2010, the FTC issued its long-awaited staff report criticizing industry self-regulatory efforts as too slow and
lacking adequate protections for consumers and emphasizing a need for simplified notice, choice and transparency to the consumer
of the collection, use and sharing of their data. The FTC suggests various methods and measures, including an implementation of
a &quot;Do Not Track&quot; mechanism - likely a persistent setting on consumers' browsers - that consumers can choose whether to
allow the tracking of their online searching and browsing activities. As a result of the report, some of the browser makers have
been working on their own do-not-track technical solutions, notably Microsoft Internet Explorer, Mozilla Firefox, Apple Safari,
and Google Chrome. Microsoft's Internet Explorer 9 offers a tracking protection feature that doesn't allow for tracking by allowing
Internet users to download tracking protection block lists which consequently block any third-party domain included in such block
lists from serving content. This content-blocking feature, depending on the adoption by Internet users, may adversely affect our
ability to grow our company, maintain our current revenues and profitability, and serve and monetize content.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Recently on the federal
level, there have been a number of House bills that have been introduced addressing online privacy, including Congressman Bobby
Rush's Best Practices Act - H.R. 611, Congressman Cliff Stearns' Consumer Privacy Protection Act of 2011, and Congresswoman Jackie
Speier's Do Not Track Me Online Act of 2011 - H.R. 654. In the Senate, Senators John Kerry and John McCain have introduced bipartisan
privacy legislation (the Commercial Privacy Bill of Rights Act of 2011 &ndash; S.799) that is designed to establish a regulatory
framework for the comprehensive protection of personal data for individuals under the aegis of the Federal Trade Commission and
for other purposes, including requiring that information that is used for online behavioral advertising that is not &quot;sensitive
personally identifiable information&quot; be subject to clear, concise and timely notice and opt-out. On the state level, California
has introduced a &quot;Do Not Track Bill&quot; - S.B. 761 that legislates the collection and use of information transmitted online.
There are others within the House and the Senate and possibly other states that are looking to introduce bills regarding the privacy
of online and offline data. These bills, if passed, could hinder growth in the use of the Web generally and adversely affect our
business. Other laws and regulations have been adopted and may be adopted in the future, and may address issues such as user privacy,
spyware, &quot;do not email&quot; lists, pricing, intellectual property ownership and infringement, copyright, trademark, trade
secret, export of encryption technology, acceptable content, search terms, lead generation, behavioral targeting, taxation, and
quality of products and services. Such measures could decrease the acceptance of the Web as a communications, commercial and advertising
medium. We have policies to prohibit abusive Internet behavior, including prohibiting the use of spam and spyware by our partners.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>We process, store and use personal information
and other data, which subjects us to governmental regulation and other legal obligations related to privacy, and our actual or
perceived failure to comply with such obligations could harm our business. </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We receive, store and
process personal information and other user data, and we enable our social media customers to share their personal information
with each other and with third parties. There are numerous federal, state and local laws around the world regarding privacy and
the storing, sharing, use, processing, disclosure and protection of personal information and other member data, the scope of which
are changing, subject to differing interpretations, and may be inconsistent between countries or conflict with other rules. We
generally comply with industry standards and are subject to the terms of our privacy policies and privacy-related obligations to
third parties (including voluntary third-party certification bodies such as TRUSTe). We strive to comply with all applicable laws,
policies, legal obligations and industry codes of conduct relating to privacy and data protection, to the extent possible. However,
it is possible that these obligations may be interpreted and applied in a manner that is inconsistent from one jurisdiction to
another and may conflict with other rules or our practices. Any failure or perceived failure by us to comply with our privacy policies,
our privacy-related obligations to users or other third parties, or our privacy-related legal obligations, or any compromise of
security that results in the unauthorized release or transfer of personally identifiable information or other member data, may
result in governmental enforcement actions, litigation or public statements against us by consumer advocacy groups or others and
could cause our customers to lose trust in us, which could have an adverse effect on our business. Additionally, if third parties
we work with, such as customers, vendors or developers, violate applicable laws or our policies, such violations may also put our
customers' information at risk and could in turn have an adverse effect on our business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Evolving regulations concerning data
privacy may restrict our customers' ability to solicit, collect, process and use data necessary to conduct email marketing campaigns
or to send surveys and analyze the results or may increase their costs, which could harm our business.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Federal, state and
foreign governments have enacted, and may in the future enact, laws and regulations concerning the solicitation, collection, processing
or use of consumers' personal information. Such laws and regulations may require companies to implement privacy and security policies,
permit users to access, correct and delete personal information stored or maintained by such companies, inform individuals of security
breaches that affect their personal information, and, in some cases, obtain individuals' consent to use personal information for
certain purposes. Other proposed legislation could, if enacted, prohibit the use of certain technologies that track individuals'
activities on web pages or that record when individuals click through to an Internet address contained in an email message. Such
laws and regulations could restrict our email marketing customers' ability to collect and use email addresses, page viewing data,
and personal information, which may reduce demand for our products.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>U.S. federal legislation entitled Controlling
the Assault of Non-Solicited Pornography and Marketing Act of 2003 imposes certain obligations on the senders of commercial emails,
which could minimize the effectiveness of our email marketing product, and establishes financial penalties for non-compliance,
which could increase the costs of our business. </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In December 2003, Congress
enacted Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003, or the CAN-SPAM Act, which establishes
certain requirements for commercial email messages and specifies penalties for the transmission of commercial email messages that
are intended to deceive the recipient as to source or content. The CAN-SPAM Act, among other things, obligates the sender of commercial
emails to provide recipients with the ability to opt out of receiving future emails from the sender. In addition, some states have
passed laws regulating commercial email practices that are significantly more punitive and difficult to comply with than the CAN-SPAM
Act, particularly Utah and Michigan, which have enacted do-not-email registries listing minors who do not wish to receive unsolicited
commercial email that markets certain covered content, such as adult or other harmful products. Some portions of these state laws
may not be preempted by the CAN-SPAM Act. The ability of our email marketing customers' constituents to opt out of receiving commercial
emails may minimize the effectiveness of our email marketing product. Moreover, non-compliance with the CAN-SPAM Act carries significant
financial penalties. If we were found to be in violation of the CAN-SPAM Act, applicable state laws not preempted by the CAN-SPAM
Act, or foreign laws regulating the distribution of commercial email, whether as a result of violations by our customers or if
we were deemed to be directly subject to and in violation of these requirements, we could be required to pay penalties, which would
adversely affect our financial performance and significantly harm our business. We also may be required to change one or more aspects
of the way we operate our business, which could impair our ability to attract and retain customers or increase our operating costs.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Public scrutiny of Internet privacy
issues may result in increased regulation and different industry standards, which could deter or prevent us from providing our
current products and solutions to our customers, thereby harming our business. </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The regulatory framework
for privacy issues worldwide is currently in flux and is likely to remain so for the foreseeable future. Practices regarding the
collection, use, storage, transmission and security of personal information by companies operating over the Internet have recently
come under increased public scrutiny. The U.S. government, including the Federal Trade Commission and the Department of Commerce,
has announced that it is reviewing the need for greater regulation for the collection of information concerning consumer behavior
on the Internet, including regulation aimed at restricting certain targeted advertising practices. On May 31, 2012, Microsoft announced
that its next version of browser, IEIO, will ship with the controversial &ldquo;DO NOT TRACK&rdquo; feature turned on by default,
the first company to instigate this feature. This feature sends a message to every website the user visits and leaves a message
stating you prefer not to be tracked. These features have the backing of the Federal Trade Commission which has threatened to call
for online privacy legislation. In addition, the European Union is in the process of proposing reforms to its existing data protection
legal framework, which may result in a greater compliance burden for companies with users in Europe. Various government and consumer
agencies have also called for new regulation and changes in industry practices.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our business, including
our ability to operate and expand internationally, could be adversely affected if legislation or regulations are adopted, interpreted,
or implemented in a manner that is inconsistent with our current business practices and that require changes to these practices,
the design of our websites, products, features or our privacy policy. In particular, the success of our business has been, and
we expect will continue to be, driven by our ability to responsibly use the data that our members share with us. Therefore, our
business could be harmed by any significant change to applicable laws, regulations or industry practices regarding the use or disclosure
of data our social media customers choose to share with us, or regarding the manner in which the express or implied consent of
consumers for such use and disclosure is obtained. Such changes may require us to modify our products and features, possibly in
a material manner, and may limit our ability to develop new products and features that make use of the data that our social media
customers voluntarily share with us. &nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>If the technology that we currently
use to target the delivery of online and mobile advertisements and to prevent fraud on our networks is restricted or becomes subject
to regulation, our expenses could increase and we could lose customers or advertising inventory. </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Websites typically
place small files of non-personalized (or &quot;anonymous&quot;) information, commonly known as cookies, on an Internet user's
hard drive. Cookies generally collect information about users on a non-personalized basis to enable websites to provide users with
a more customized experience. Cookie information is passed to the website through an Internet user's browser software. We currently
use cookies, along with other technologies, as set forth in our privacy policies, for purposes that include, without limitation,
improving the experience Web users have when they see Web advertisements, advertising campaign reporting, website reporting and
to monitor and prevent fraudulent activity on our networks. Most currently available Internet browsers allow Internet users to
modify their browser settings to prevent cookies from being stored on their hard drive, and some users currently do so. Internet
users can also delete cookies from their hard drives at any time. Some Internet commentators and privacy advocates have suggested
limiting or eliminating the use of cookies, and legislation has been introduced in some jurisdictions to regulate the use of cookie
technology. The effectiveness of our technology could be limited by any reduction or limitation in the use of cookies. If the use
or effectiveness of cookies were limited, we expect that we would need to switch to other technologies to gather demographic and
behavioral information. While such technologies currently exist, they may be less effective than cookies. We also expect that we
would need to develop or acquire other technology to monitor and prevent fraudulent activity on our networks. Replacement of cookies
could require reengineering time and resources, might not be completed in time to avoid losing customers or advertising inventory,
and might not be commercially feasible. Our use of cookie technology or any other technologies designed to collect Internet usage
information may subject us to litigation or investigations in the future. Any litigation or government action against us could
be costly and time consuming, require us to change our business practices and divert management's attention.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Several states have implemented or proposed
regulations that impose sales tax on certain e-commerce transactions involving the use of affiliate marketing programs and several
bills have been introduced in Congress that could affect sales tax of e-commerce.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In 2008, the state
of New York implemented regulations that require advertisers to collect and remit sales taxes on sales made to residents of New
York if the affiliate/publisher that facilitated that sale is a New York-based entity. In early 2011 and mid-2011, the states of
Illinois and California, respectively, also passed similar regulations. In addition, several other states, including Arkansas,
Connecticut, North Carolina, Rhode Island and Vermont, have passed or proposed similar regulations, although some of these proposed
regulations are being challenged in court, have not become effective, or did not pass. The California regulation was subsequently
delayed until September 15, 2012 (if a federal law authorizing states to require retailers to collect taxes, regardless of the
location of the retailer, is not enacted on or before July 31, 2012). On November 30, 2011, the U.S. House Judiciary Committee
held an oversight hearing on the constitutional limitations on states&rsquo; authority to collect sales tax on e-commerce. Congress
currently is considering three remote sales tax proposals in the Main Street Fairness Act (S. 1452 and H.R. 2701), the Marketplace
Equity Act (H.R. 3179), and the Marketplace Fairness Act (S.1832). Congressional hearings have been set for July 2012 to discuss
these bills. These taxes would impact our business. However, given the state of flux of this area of regulation, we are unable
to determine the impact if additional states adopt similar requirements or if Congress adopts regulations affecting the same.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Our business is subject to a variety
of U.S. and foreign laws, many of which are unsettled and still developing and could subject us to claims or otherwise harm our
business.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We are subject to a
variety of laws in the United States and abroad, including laws regarding data retention, privacy and consumer protection, that
are continuously evolving and developing. The scope and interpretation of the laws that are or may be applicable to us are often
uncertain and may be conflicting, particularly laws outside the United States. For example, laws relating to the liability of providers
of online services for activities of their users and other third parties are currently being tested by a number of claims, including
actions based on invasion of privacy and other torts, unfair competition, copyright and trademark infringement, and other theories
based on the nature and content of the materials searched, the ads posted, or the content provided by users. In addition, regulatory
authorities around the world are considering a number of legislative and regulatory proposals concerning data protection and other
matters that may be applicable to our business. It is also likely that as our business grows and evolves and our solutions are
used in a greater number of countries, we will become subject to laws and regulations in additional jurisdictions. It is difficult
to predict how existing laws will be applied to our business and the new laws to which we may become subject.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If we are not able
to comply with these laws or regulations or if we become liable under these laws or regulations, we could be directly harmed, and
we may be forced to implement new measures to reduce our exposure to this liability. This may require us to expend substantial
resources or to discontinue certain solutions, which would negatively affect our business, financial condition and results of operations.
In addition, the increased attention focused upon liability issues as a result of lawsuits and legislative proposals could harm
our reputation or otherwise impact the growth of our business. Any costs incurred as a result of this potential liability could
harm our business and operating results.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Our customers' use of our products to
transmit negative messages or website links to harmful applications could damage our reputation, and we may face liability for
unauthorized, inaccurate or fraudulent information distributed via our products. </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our customers could
use our email marketing product to transmit negative messages or website links to harmful applications, reproduce and distribute
copyrighted material without permission, or report inaccurate or fraudulent data. Any such use of our products could damage our
reputation and we could face claims for damages, copyright or trademark infringement, defamation, negligence or fraud. Moreover,
our customers' promotion of their products and services through our email marketing product may not comply with federal, state
and foreign laws. We cannot predict whether our role in facilitating these activities would expose us to liability under these
laws.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Even if claims asserted
against us do not result in liability, we may incur substantial costs in investigating and defending such claims. If we are found
liable for our customers' activities, we could be required to pay fines or penalties, redesign business methods or otherwise expend
resources to remedy any damages caused by such actions and to avoid future liability.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our existing general
liability insurance may not cover all potential claims to which we are exposed or may not be adequate to indemnify us for all liabilities
that may be imposed. Any imposition of liability that is not covered by insurance or is in excess of insurance coverage would increase
our operating losses and reduce our net worth and working capital.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>We may not be able to successfully halt
the operations of websites that aggregate our data as well as data from other companies, including social networks, or copycat
websites that have misappropriated our data in the past or may misappropriate our data in the future. </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">From time to time,
third parties have misappropriated our data through website scraping, robots or other means and aggregated this data on their websites
with data from other companies. In addition, &quot;copycat&quot; websites have misappropriated data on our network and attempted
to imitate our brand or the functionality of our website. When we have become aware of such websites, we have employed technological
or legal measures in an attempt to halt their operations. However, we may not be able to detect all such websites in a timely manner
and, even if we could, technological and legal measures may be insufficient to stop their operations. In some cases, particularly
in the case of websites operating outside of the United States, our available remedies may not be adequate to protect us against
such websites. Regardless of whether we can successfully enforce our rights against these websites, any measures that we may take
could require us to expend significant financial or other resources.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>We are, and may in the future be, subject
to intellectual property disputes, which are costly to defend and could harm our business and operating results. </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">From time to time,
we face, and we expect to face in the future, allegations that we have infringed the trademarks, copyrights, patents and other
intellectual property rights of third parties, including from our competitors or non-practicing entities. Patent and other intellectual
property litigation may be protracted and expensive, and the results are difficult to predict and may require us to stop offering
certain features, purchase licenses or modify our products and features while we develop non-infringing substitutes or may result
in significant settlement costs. &nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, we may
use open source software in our solutions and will use open source software in the future. From time to time, we may face claims
from companies that incorporate open source software into their products, claiming ownership of, or demanding release of, the source
code, the open source software and/or derivative works that were developed using such software, or otherwise seeking to enforce
the terms of the applicable open source license. These claims could also result in litigation, require us to purchase a costly
license or require us to devote additional research and development resources to change our solutions, any of which would have
a negative effect on our business and operating results.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Although the results
of litigation and claims cannot be predicted with certainty, we do not believe that the final outcome of those matters that we
currently face will have a material adverse effect on our business. However, there can be no assurance that our expectations will
prove correct, and even if these matters do not result in litigation or are resolved in our favor or without significant cash settlements,
these matters, and the time and resources necessary to litigate or resolve them, could harm our business, our operating results
or our reputation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>We could incur substantial costs defending
against claims that our products infringe on the proprietary rights of others.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The scope of any intellectual
property rights that we have is uncertain and may not be sufficient to prevent infringement claims against us or claims that we
have violated the intellectual property rights of third parties. While we know of no basis for any claims of this type, the existence
of and ownership of intellectual property can be difficult to verify and we have not made an exhaustive search of all patent filings.
Competitors may have filed applications for or may have been issued patents and may obtain additional patents and proprietary rights
relating to products or processes that compete with or are related to our products and services. The scope and viability of these
patents, the extent to which we may be required to obtain licenses under these patents or under other proprietary rights and the
cost and availability of licenses are unknown, but these factors may limit our ability to market our products.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Third parties could
claim infringement by us with respect to any patents or other proprietary rights that they hold, and we cannot assure investors
that we would prevail in any such proceeding as the intellectual property status of our current and future competitors' products
is uncertain. Any infringement claim against us, whether meritorious or not, could be time-consuming, result in costly litigation
or arbitration and diversion of technical and management personnel, or require us to develop non-infringing technology or to enter
into royalty or licensing agreements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We might not be successful
in developing or otherwise acquiring rights to non-infringing technologies. Royalty or licensing agreements, if required, may not
be available on terms acceptable to us, or at all, and could significantly harm our business and operating results. A successful
claim of infringement against us or our failure or inability to license the infringed or similar technology could require us to
pay substantial damages and could harm our business because we would not be able to continue selling our products without incurring
significant additional expense. In addition, to the extent we agree to indemnify customers or other third parties against infringement
of the intellectual property rights of others, a claim of infringement could require us to incur substantial time, effort and expense
to indemnify these customers and third parties and could disrupt or terminate their ability to use, market or sell our products.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Failure to protect or enforce our intellectual
property rights could harm our business and operating results. </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We regard the protection
of our trade secrets, copyrights, trademarks, trade dress, domain names and patents as critical to our success. In particular,
we must maintain, protect and enhance the &quot;XI United&quot; and &quot;Lead Revolution&quot; brands and our numerous proprietary
names we use to market our services. We strive to protect our intellectual property rights by relying on federal, state and common
law rights, as well as contractual restrictions. We enter into confidentiality and invention assignment agreements with our employees
and contractors, and confidentiality agreements with parties with whom we conduct business in order to limit access to, and disclosure
and use of, our proprietary information. However, these contractual arrangements and the other steps we have taken to protect our
intellectual property may not prevent the misappropriation of our proprietary information or deter independent development of similar
technologies by others.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We pursue the registration
of our domain names, trademarks, and service marks in the United States. Effective trade secret, copyright, trademark, trade dress,
domain name and patent prosecution is expensive to develop and maintain, both in terms of initial and ongoing registration requirements
and the costs of defending our rights.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Litigation may be necessary
to enforce our intellectual property rights, protect our respective trade secrets or determine the validity and scope of proprietary
rights claimed by others. Any litigation of this nature, regardless of outcome or merit, could result in substantial costs and
diversion of management and technical resources, any of which could adversely affect our business and operating results. We may
incur significant costs in enforcing our trademarks against those who attempt to imitate our &quot;XI United&quot; and &quot;Lead
Revolution&quot; and other brands. If we fail to maintain, protect and enhance our intellectual property rights, our business and
operating results may be harmed.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>We have agreed to provide indemnification
to our officers and directors.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company's Articles
of Incorporation provide to our officers and directors indemnification to the full extent provided by law, and provide that, to
the extent permitted by Nevada law, an officer or director will not be personally liable for monetary damages to the Company or
its shareholders for breach of his or her fiduciary duty as an officer or director, except for liability for certain actions that
may not be limited under Nevada law. These indemnification provisions may limit the ability of members to seek recourse against
our officers and directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-variant: small-caps"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-variant: small-caps"><B>Risks
Related to Our Securities, Tax Concerns And Reporting Requirements</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>We are subject to tax concerns.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Xhibit LLC, a Nevada
limited liability company, operates as a partnership for tax purposes and owns two operating limited liability companies originally
treated as Subchapter S companies. The acquisition by NB of Xhibit, prior issuances of units to parties not permitted to hold equity
in a Subchapter S entity, and units issued to employees for services rendered have tax ramifications which may have material adverse
tax consequences on the various companies and their equityholders. NB may be required to indemnify some of these parties for their
taxes <U>and</U> may be required to pay substantial taxes and penalties to the Internal Revenue Service and various state taxing
authorities if it is determined that taxes are due and have not been paid. As returns for the year ended December 31, 2011 have
not yet been filed it is uncertain as to the magnitude of taxes, penalties and interest.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>There is a limited market for our common
stock.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Only a very limited
trading market currently exists for NB's common stock. As a result, any broker/dealer that makes a market in our stock or other
person that buys or sells our stock could have a significant influence over the stock&rsquo;s price at any given time. We cannot
assure our shareholders that a market for our stock will be sustained. There is no assurance that our shares will have any greater
liquidity than shares which do not trade on a public market, particularly given recent changes in legislation related to shell
companies which will further restrict the ability of our shareholders to sell their shares in the public market. In February 2008,
the Securities and Exchange Commission amended Rule 144, and now holders of shares in any company that was a shell company and
subsequently acquired business operations via merger, such as NB, are subject to a longer holding period before being eligible
to sell their shares pursuant to Rule 144.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Our stock price is likely to be volatile.
</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">There is generally
significant volatility in the market prices and limited liquidity of securities of early stage companies, and particularly of early
stage Internet-based companies. Contributing to this volatility are various events that can affect our stock price in a positive
or negative manner. These events include, but are not limited to: governmental regulations or actions; market acceptance and sales
growth of our products; litigation involving the Company or our industry; developments or disputes concerning our patents or other
proprietary rights; departure of key personnel; future sales of our securities; fluctuations in our financial results or those
of companies that are perceived to be similar to us; swings in seasonal demands of purchasers; investors' general perception of
us; and general economic, industry and market conditions. If any of these events occur, it could cause our stock price to fall.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>The price of our common stock may be
adversely affected by the future issuance and sale of shares of our common stock or other equity securities. </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We cannot predict the
size of future issuances or sales of our common stock or other equity securities future acquisitions or capital raising activities,
or the effect, if any, that such issuances or sales may have on the market price of our common stock. The issuance and sale of
substantial amounts of common stock or other equity securities or announcement that such issuances and sales may occur, could adversely
affect the market price of our common stock. As of June 4, 2012, we had 66,583,676 outstanding shares of common stock, and no additional
shares were reserved for issuance. Any decline in the price of our common stock may encourage short sales, which could place further
downward pressure on the price of our common stock and may impair our ability to raise additional capital through the sale of equity
securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Our reduced stock price may adversely affect our liquidity.</I>&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our common stock has
been trading at less than $1.00 per share periodically in the last year.&nbsp;&nbsp;Many market makers are reluctant to make a
market in stock with a trading price of less than $1.00 per share.&nbsp;&nbsp;To the extent that we have fewer market makers for
our common stock, our volume and liquidity will likely decline, which could further depress our stock price.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Our reporting obligations as a public
company are costly.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Operating a public
company involves substantial costs to comply with reporting obligations under federal securities laws which are continuing to increase
as provisions of the Sarbanes Oxley Act of 2002 are implemented. We may not reach sufficient size to justify our public reporting
status. If we were forced to become a private company following the Merger, then our shareholders may lose their ability to sell
their shares and there would be substantial costs associated with becoming a private company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Following the closing
of the Merger, the Company will have very limited ability to unwind the transaction. Thus, the post-merger company will be a public,
reporting company and subject to the reporting obligations of the Securities Exchange Act of 1934, as amended, and the requirements
of the exchange or other market listing its common stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Our shares are &quot;penny stock&quot;.
</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In general, &quot;penny
stock&quot; includes securities of companies which are not listed on the principal stock exchanges and have a bid price in the
market of less than $5.00; and companies with net tangible assets of less than $2 million ($5 million if the issuer has been in
continuous operation for less than three years), or which has recorded revenues of less than $6 million in the last three years.
As &quot;penny stock,&quot; our stock therefore is subject to Rule 15g-9, which imposes additional sales practice requirements
on broker-dealers which sell such securities to persons other than established customers and &quot;accredited investors&quot; (generally,
individuals with net worth in excess of $1 million or annual incomes exceeding $200,000, or $300,000 together with their spouses,
or individuals who are the officers or directors of the issuer of the securities). For transactions covered by Rule 15g-9, a broker-dealer
must make a special suitability determination for the purchaser and have received the purchaser's written consent to the transaction
prior to sale. Consequently, this rule may adversely affect the ability of broker-dealers to sell our stock, and therefore may
adversely affect stockholders' ability to sell the stock in the public market.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>The requirements of being a public company
may strain our resources, divert management's attention and affect our ability to attract and retain qualified board members. </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As a public company,
we are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act, the Sarbanes-Oxley
Act, the Dodd-Frank Act, the listing requirements of the OTCBB and other applicable securities rules and regulations. Compliance
with these rules and regulations requires significant legal and financial compliance costs, makes some activities more difficult,
time-consuming or costly and increases demand on our systems and resources. The Exchange Act requires, among other things, that
we file annual, quarterly and current reports with respect to our business and operating results. The Sarbanes-Oxley Act requires,
among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting.
In order to maintain and, if required, improve our disclosure controls and procedures and internal control over financial reporting
to meet this standard, significant resources and management oversight may be required. As a result, management's attention may
be diverted from other business concerns, which could harm our business and operating results. Although we have already hired additional
employees to comply with these requirements, we may need to hire more employees in the future, which will increase our costs and
expenses.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, changing
laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for public companies,
increasing legal and financial compliance costs and making some activities more time consuming. These laws, regulations and standards
are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in
practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty
regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We intend
to invest resources to comply with evolving laws, regulations and standards, and this investment may result in increased general
and administrative expenses and a diversion of management's time and attention from revenue-generating activities to compliance
activities. If our efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory
or governing bodies due to ambiguities related to practice, regulatory authorities may initiate legal proceedings against us and
our business may be harmed. &nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We also expect that
being a public company with these new rules and regulations will make it more expensive for us to obtain director and officer liability
insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These factors
could also make it more difficult for us to attract and retain qualified members for our Board of Directors, particularly to serve
any committees, and qualified executive officers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As a result of disclosure
of information in filings required of a public company, our business and financial condition will become more visible, which we
believe may result in threatened or actual litigation, including by competitors and other third parties.&nbsp;If such claims are
successful, our business and operating results could be harmed, and even if the claims do not result in litigation or are resolved
in our favor, these claims, and the time and resources necessary to resolve them, could divert the resources of our management
and harm our business and operating results.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>We will be obligated to develop and
maintain proper and effective internal controls over financial reporting. </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We are required, pursuant
to Section 404 of the Sarbanes-Oxley Act, to furnish a report by management on, among other things, the effectiveness of our internal
control over financial reporting annually. This assessment will need to include disclosure of any material weaknesses identified
by our management in our internal control over financial reporting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We may not be able
to complete our evaluation, testing and any required remediation in a timely fashion. During the evaluation and testing process,
if we identify one or more material weaknesses in our internal control over financial reporting, we will be unable to assert that
our internal controls are effective.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If we are unable to
assert that our internal control over financial reporting is effective, or if our auditors are unable to express an opinion on
the effectiveness of our internal controls, we could lose investor confidence in the accuracy and completeness of our financial
reports, which would cause the price of our common stock to decline.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Our CEO has control over key decision
making as a result of his control of a majority of our voting stock.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Mr. Richarde, one of
our founders, our Chairman, and our CEO, owns approximately 67% of the outstanding shares of common stock. As a result, Mr. Richarde
has the ability to control the outcome of matters submitted to our stockholders for approval, including the election of directors
and any merger, consolidation, or sale of all or substantially all of our assets. This concentrated control could delay, defer,
or prevent a change of control, merger, consolidation, or sale of all or substantially all of our assets that our stockholders
support, or conversely this concentrated control could result in the consummation of such a transaction that our other stockholders
do not support. In addition, Mr. Richarde has the ability to control the management and major strategic investments of our company
as a result of his position as our CEO and his ability to control the election or replacement of our directors. In the event of
his death, the shares of our capital stock that he owns will be transferred to the persons or entities that he designates. As a
board member and officer, Mr. Richarde 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. Richarde is entitled
to vote his shares in his own interests, which may not always be in the interests of our stockholders generally.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>We have no independent directors.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company has no
independent directors and is governed by a Board of Directors consisting of its CEO and CFO. As a result, inherent conflicts of
interest may arise which could only be resolved by a vote of a majority of disinterested shareholders. Shareholder service agencies
and rights groups strongly encourage companies to have a majority of independent directors which increases the likelihood of better
corporate governance decisions. While the Company intends to actively recruit one to three independent directors there is no assurance
we will successfully do so.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>We do not expect to pay any dividends
for the foreseeable future. </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We do not anticipate
paying any dividends to our shareholders for the foreseeable future. Shareholders must be prepared to rely on sales of their common
stock after price appreciation to earn an investment return, which may never occur. Any determination to pay dividends in the future
will be made at the discretion of our Board of Directors and will depend on our results of operations, financial conditions, contractual
restrictions, restrictions imposed by applicable laws and other factors that our Board deems relevant.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>ITEM 3.02 Unregistered Sales of Equity
Securities</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Pursuant to the Merger,
the Registrant is issuing 55,383,452 shares of its common stock. These securities will be issued by the Registrant in reliance
upon the exemption from registration under Section 4(2) and Regulation D of the Securities Act of 1933, as amended.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><FONT STYLE="font-variant: small-caps"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><FONT STYLE="font-variant: small-caps"><B>Market
for Common Equity and Related Stockholder Matters; Description Of Securities</B></FONT></P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Overview</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company's Articles
of Incorporation provide that the Company has the authority to issue 560 million shares of capital stock, which are currently divided
into two classes as follows: 480 million shares of common stock, par value of $0.0001 per share; and 80 million shares of preferred
stock, also with a par value of $0.0001 per share. Immediately prior to the Merger, and following its recent 8:1 forward stock
split, the Company had 11,200,224 shares of common stock outstanding, and no shares of preferred stock outstanding. As of May 31,
2012, and prior to the Merger, the Company had 43,810,011 Units outstanding.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Common Stock</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Voting.</I> Holders
of the common stock are entitled to one vote per share on all matters to be voted on by the Company's shareholders. The Company's
bylaws provide that a majority of the outstanding shares of the corporation entitled to vote constitute a quorum at a meeting of
the shareholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Dividends</I>. The
Company's Board of Directors, in its sole discretion, may declare and pay dividends on the common stock, payable in cash or other
consideration, out of funds legally available, if all dividends due on any preferred stock have been declared and paid. The Company
has not paid any cash dividends on its common stock and does not plan to pay any cash dividends on its common stock for the foreseeable
future.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Liquidation, Subdivision,
or Combination</I>. In the event of any liquidation, dissolution or winding up of the Company or upon the distribution of its assets,
all assets and funds remaining after payment in full of the Company's debts and liabilities, and after the payment to holders of
any then outstanding preferred stock of the full preferential amounts to which they were entitled, would be divided and distributed
among holders of the common stock.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Equity Compensation Plans</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">None.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Market Price of and Dividends on
the Registrant's Common Equity and Related Stockholder Matters</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">NB received a listing
on the Pink Sheets under the symbol &quot;NBMF&quot; in February 2007 and moved to the OTC Bulletin Board in August 2007. To date,
NB stock has been thinly traded.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On March 1, 2012, NB
effectuated a forward split of its issued and outstanding common shares, whereby every old share of common stock will be exchanged
for eight new shares of NB's common stock. As a result, the issued and outstanding shares of common stock increased from 1,400,028
prior to the split to 11,200,224 following the forward split. In connection with the stock split NB also increased the number of
its authorized shares of common stock from 60,000,000 shares to 480,000,000 shares and its preferred stock from 10,000,000 to 80,000,000
shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table
sets forth, for the calendar periods indicated, the range of the high and low last reported bid prices of NB common stock, as reported
by the OTC Bulletin Board.&nbsp; The quotations represent inter-dealer prices without retail mark-ups, mark-downs or commissions,
and may not necessarily represent actual transactions.&nbsp; The quotations may be rounded for presentation. There is an absence
of an established trading market for NB's common stock, as the market is limited, sporadic and highly volatile, which may affect
the prices listed below. &nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid">2012</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">High Bid</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Low Bid</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 70%; text-align: left; padding-left: 27pt">First Quarter 1-1-12 to 3-31-12</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">3.85</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">0.25</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid">2011</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">High Bid</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Low Bid</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 70%; text-align: left; padding-left: 27pt">Fourth Quarter 10-1-11 to 12-31-11</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">0.02</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">0.25</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 27pt">Third Quarter 7-1-11 to 9-30-11</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.02</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.09</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 27pt">Second Quarter 4-1-11 to 6-30-11</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.04</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.04</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 27pt">First Quarter 1-1-11 to 3-31-11</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.01</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.03</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid">2010</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">High Bid</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Low Bid</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 70%; text-align: left; padding-left: 27pt">Fourth Quarter 10-1-10 to 12-31-10</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">0.03</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">0.03</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 27pt">Third Quarter 7-1-10 to 9-30-10</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.03</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.03</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 27pt">Second Quarter 4-1-10 to 6-30-10</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.03</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.03</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 27pt">First Quarter 1-1-10 to 3-31-10</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">N/A</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">N/A</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD COLSPAN="8" STYLE="text-align: left; padding-left: 0">* N/A indicates no recorded trading activity during the period presented.</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">There is limited trading
activity in NB's securities, and there can be no assurance a regular trading market for our common stock will be sustained. On
June 4, 2012, the closing price per share of NB common stock on the OTC Bulletin Board was $2.50.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The last trading day
before the Merger was announced was July 18, 2011. On that date the closing price for NB shares on the OTC Bulletin Board was N/A
as the stock had not been traded. NB has never paid cash dividends on its capital stock. NB currently intends to retain all earnings,
if any, to finance the growth and development of its business. NB does not anticipate paying any cash dividends in the foreseeable
future. As of May 31, 2012, NB had approximately 117 shareholders of record, exclusive of shares held in street name.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Recent Sales of Unregistered
Securities</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">None by the Registrant,
other than the securities issued pursuant to the Merger.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On formation, Xhibit
issued 10 Units to two of its founders, and 814,800 Units to a third founder. In August 2011, Xhibit issued 26,345,200 Units to
two of its founders in exchange for the contribution of their equity in Stacked Digital, LLC, SpyFire Interactive, LLC, and Hrizzo,
LLC. Subsequent to this exchange, Hrizzo, LLC was returned to one of the founders in exchange for cancellation of 7,578,411 units.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In August through October
2011, Xhibit issued 1,050,000 Units to three accredited investors in exchange for cash of $875,000.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In November 2011, Xhibit
issued 1,747,882 Units to three employees in exchange for services rendered.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In May 2012, Xhibit
issued 21,905,000 Units to the 11 former members of Social Bounce LLC upon Xhibit's acquisition of Social Bounce LLC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">All of the above securities
were issued in reliance upon the exemption from registration under Section 4(2) and/or Regulation D of the Securities Act of 1933,
as amended.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Item 4.01. Changes in Registrant's Certifying
Accountant</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On June 4, 2012, the
Board of Directors of the Company dismissed Weaver Martin &amp; Samyn, LLC (&quot;WM&amp;S&quot;), the registered independent public
accounting firm for the Company, as the Company's independent auditors effective immediately. The dismissal of WM&amp;S was a result
of the Company's acquisition of Xhibit as the Company's wholly owned operating subsidiary.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In connection with
the audit of the Company's financial statements for the fiscal years ended December 31, 2011 and 2010, and through June 4, 2012,
there were no disagreements between the Company and WM&amp;S on any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which if not resolved to WM&amp;S's satisfaction, would have caused WM&amp;S to make
reference the subject matter of the disagreement in connection with its audit reports on the Company's financial statements. None
of the reportable events set forth in Item 304(a)(1)(iv) or (v) of Regulation S-K occurred during the period in which WM&amp;S
served as the Company's independent registered public accounting firm.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The audit reports of
WM&amp;S on the Company's financial statements as of and for the fiscal years ended December 31, 2011 and 2010 did not contain
an adverse opinion or disclaimer of opinion, however, each of the audit reports was modified to note that the significant net losses
incurred raised substantial doubt about the Company's ability to continue as a going concern and that the financial statements
for each of those fiscal years did not include adjustments that might result from the outcome of those uncertainties.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company provided
WM&amp;S a copy of this report prior to its filing with the Securities and Exchange Commission and requested that WM&amp;S furnish
a letter addressed to the Securities and Exchange Commission stating whether WM&amp;S agrees with the statements made in this Item
4.01. A copy of the letter is filed as an exhibit to this Form 8-K.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On June 4, 2012, the
Board of Directors of the Company approved the engagement of Farber Hass Hurley LLP (&quot;FHH&quot;) to serve as the Company's
independent registered public accounting firm for the Company's fiscal year ending December 31, 2012. The decision to change the
Company's independent registered public accounting firm was the result of the Board of Directors' determination that it was in
the best interests of the Company following the Company's acquisition of Xhibit as the Company's wholly owned operating subsidiary,
as FHH has been serving as Xhibit's auditor.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Prior to June 4, 2012,
the date that FHH was retained as the independent registered public accounting firm of the Company:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(1) The Company did
not consult FHH regarding either the application of accounting principles to a specified transaction, either completed or proposed,
or the type of audit opinion that might be rendered on the Company's financial statements;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(2) Neither a written
report nor oral advice was provided to the Company by FHH that they concluded was an important factor considered by the Company
in reaching a decision as to the accounting, auditing or financial reporting issue; and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(3) The Company did
not consult FHH regarding any matter that was either the subject of a &quot;disagreement&quot; (as defined in Item 304(a)(1)(iv)
of Regulation S-K and the related instructions) or any of the reportable events set forth in Item 304(a)(1)(v) of Regulation S-K.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>ITEM 5.01 Changes in Control of Registrant</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Following the Merger,
the holders of all of the common stock of NB before the Merger only own 16.8% of the common stock of the Company. The former holders
of Units in Xhibit now own 83.2% of the common stock of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>ITEM 5.02 Departure of Directors or
Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In conjunction with
the Merger, and effective as of June 4, 2012 (the effective date of the Merger), Derold Kelley resigned from his positions as Chief
Executive Officer, Chief Financial Officer, President and sole director of the Registrant.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Effective as of June
4, 2012, Chris Richarde and Michael J. Schifsky were appointed as directors by the resigning sole director. The Board has not yet
determined on which Board committees these two directors will serve, although it expects to do so at its next scheduled meeting
after the Board establishes which committees the Company will form. Further information about the new Board members may be found
below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Effective as of June
4, 2012, Chris Richarde was appointed as Chief Executive Officer and President of the Registrant and Michael J. Schifsky was appointed
as Chief Financial Officer and Treasurer of the Company. Also effective June 4, 2012, the Board determined that Dzenis Softic,
Xhibit's CTO, and Darin Toone, Xhibit's COO, should be considered executive officers of the Registrant. The Registrant has entered
into employment agreements with Mr. Richarde and Mr. Schifsky, and Mr. Softic and Mr. Toone have employment agreements with Xhibit.
Further information about these officers may be found below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company's directors,
as named above, will serve until the next annual meeting of the Company's shareholders or until their successors are duly elected
and have qualified. Directors will be elected for one-year terms at the annual shareholders meeting. There is no arrangement or
understanding between any of the directors or officers of the Company and any other person pursuant to which any director or officer
was or is to be selected as a director or officer, and there is no arrangement, plan or understanding as to whether non-management
shareholders will exercise their voting rights to continue to elect the current directors to the Company's board. There are also
no arrangements, agreements or understandings between non-management shareholders that may directly or indirectly participate in
or influence the management of the Company's affairs.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">There are no agreements
or understandings for any officer or director to resign at the request of another person, and none of the officers or directors
is acting on behalf of, or will act at the direction of, any other person. There are no family relationships among our executive
officers and directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><FONT STYLE="font-variant: small-caps"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><FONT STYLE="font-variant: small-caps"><B>Management</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">NB's management and
directors and their respective ages as of the date of this report are set forth in the table below. Also provided is a brief description
of the experience of each director and officer during the past five years and directorships (if any) held by each director in other
companies.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 98%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; margin-left: 9pt">
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify; width: 40%">Name</TD>
    <TD STYLE="font-weight: bold; text-align: center; width: 1%">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; width: 9%">Age</TD>
    <TD STYLE="font-weight: bold; text-align: justify; width: 1%">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: justify; width: 24%">Position</TD>
    <TD STYLE="font-weight: bold; text-align: justify; width: 1%">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: justify; width: 24%">Term of Office*</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Chris Richarde</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">28</TD>
    <TD>&nbsp;</TD>
    <TD>CEO, Chairman</TD>
    <TD>&nbsp;</TD>
    <TD>Annual</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Michael J. Schifsky</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">51</TD>
    <TD>&nbsp;</TD>
    <TD>CFO, Director</TD>
    <TD>&nbsp;</TD>
    <TD>Annual</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Dzenis Softic</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">32</TD>
    <TD>&nbsp;</TD>
    <TD>CTO, Xhibit</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Darin Toone</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">42</TD>
    <TD>&nbsp;</TD>
    <TD>COO, Xhibit</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in">*&nbsp; For directors
only</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Chris Richarde<FONT STYLE="font-weight: normal">
was the co-founder and has served as the Chief Executive Officer of Xhibit LLC since July 2011. Mr. Richarde has over 13 years
of industry experience in the field of internet marketing. In 2005, Mr. Richarde founded and from 2005, he has served as CEO of
SpyFire Interactive, LLC, a results-based digital marketing and advertising agency. In April 2010, Mr. Richarde co-founded Stacked
Digital, LLC, an online email marketing and lead generation company. Both SpyFire and Stacked Digital were acquired by Xhibit in
August 2011. Mr. Richarde brings his perspective and experience as Xhibit's co-founder and CEO to his proposed service on the Board
of Directors. In 2003, Mr. Richarde pled guilty to two counts of felony reckless driving in Washoe County, Nevada, stemming from
a vehicular crash in June 2002 when the vehicle he was driving went out of control and crashed into a tree, resulting in the death
of one person and substantial bodily harm to two others.&nbsp;At the scene of the car accident, Mr. Richarde had his blood drawn
and no alcohol was found in his system. Mr. Richarde was sentenced to five years probation, of which one year was served under
house arrest, and restitution. A related civil suit was settled in March 2012, as well.<FONT STYLE="color: #333333"> </FONT></FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Michael Schifsky<FONT STYLE="font-weight: normal">
has been the Chief Financial Officer of Xhibit LLC since July 2011. Mr. Schifsky has over 25 years of financial and operational
management experience. His background includes executive roles in organizations ranging from large established public companies
to small and mid-sized rapid growth enterprises where he gained critical experience in leadership, organizational development,
capital formation, mergers and acquisitions, SEC reporting, and corporate governance. Mr. Schifsky played a key role in the early
phase of successful acquisition program that propelled Airgas, Inc. from a $200 million company to what is today a highly successful
$4.5 billion NYSE traded industrial gas distributor. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">From September 2009
to July 2011, Mr. Schifsky served as Chief Financial Officer of Millennium Energy Group, an early stage high tech energy storage
solutions provider for the alternative energy and telecom industries. From April 2008 to August 2009, he served as interim Chief
Financial Officer for MD Helicopters, a manufacturer of light and medium duty helicopters. From December 2006 to April 2008, he
served as Chief Financial Officer for Clear Choice Financial, a full service mortgage company. From April 2004 to December 2006,
Mr. Schifsky was an independent consultant providing financial advisory and consulting services to such notable companies as American
Express, Apollo Group, Amcor Ltd, and American Skiing Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">From July 2010 to August
2011, Mr. Schifsky served on the Board of Directors of Big Bear Mining Corp., a U.S. based mineral exploration company. Mr. Schifsky
began his career in Philadelphia office of Ernst and Young, an international public accounting firm where he earned his CPA. He
holds a B.S. in accountancy from Villanova University. Mr. Schifsky brings extensive financial and operational management experience
to his proposed service on the Board of Directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Dzenis Softic</B>
has been Xhibit's Chief Technology Officer since October 2011 and is responsible for all product and software development efforts
for the Company. Mr. Softic is a successful Internet technology entrepreneur with over 12 years of relevant industry experience.
In 2003 Mr. Softic founded and served as CEO of VoloMP, an email marketing and software company, until he sold the company to Ybrant
in 2006. In 2006, Mr. Softic founded ABC Internet Media, an email marketing and technology company, and served as CEO until 2009
and remains the sole owner as of the date of this filing. From 2009 to 2010, Mr. Softic was the Chief Technology Officer for JumpOnIt.com,
a daily coupon site for the Australian market, where he managed a team of accomplished developers and built a highly successful
daily coupon site from the ground up. In November 2010 LivingSocial bought a $5 million controlling equity position in JumpOnIt.com,
which made Living Social the largest social shopping player in Australia. In 2010, Mr. Softic returned to VoloMP as Chief Operating
Officer to drive increased market share and profitability, until he joined Xhibit in 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Darin E. Toone</B>
has served as COO for Xhibit since September 2011 and plays an important role in developing advertiser relationships for Xhibit.
Prior to joining Xhibit, Mr. Toone was an Internet media entrepreneur cofounding several Internet media and product development
companies where he began marketing his own products and services online by developing direct response marketing campaigns. From
2004 to 2010 Mr. Toone served as Co-Founder and CEO of Producer Media LLC and Stage 6 Media LLC, companies that provided online
business tools for at-home and small business owners. In 2008 through September 2011, Mr. Toone began developing products and services
in the diet and fitness vertical market and served as Vice President and Cofounder of OZone Holdings, LLC and WAT Works, LLC. OZone
Holdings is an online fitness company known for providing results oriented 20-minute daily workout programs delivered to its online
community through OZone's innovative online portal. WAT Works was the marketing arm for OZone that developed marketing channels
for online sales of diet and fitness products. Mr. Toone holds a BS degree in Behavioral Science and Health from the University
of Utah.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><B>Significant Employees</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Certain significant
employees of Xhibit and its subsidiaries and their respective ages as of the date of this report are set forth in the table below.
Also provided is a brief description of the experience of each significant employee during the past five years.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-left: 0.05in; font-weight: bold; text-align: justify; width: 39%">Name</TD>
    <TD STYLE="font-weight: bold; text-align: center; width: 2%">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; width: 8%">Age</TD>
    <TD STYLE="font-weight: bold; text-align: justify; width: 2%">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: justify; width: 49%">Position and Company</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Steven Hubbard</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">29</TD>
    <TD>&nbsp;</TD>
    <TD>Director of Business Development, Xhibit</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Viet Le</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">29</TD>
    <TD>&nbsp;</TD>
    <TD>Director of Interactive Development, Xhibit</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Mirco Pasqulaini</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">36</TD>
    <TD>&nbsp;</TD>
    <TD>Digital Creative Architect, Xhibit</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Viet D. Le</B> has served as Xhibit's
President of Web Development since January 2012. Prior to joining Xhibit, Mr. Le founded HEYVIET Interactive, a Detroit-based digital
boutique agency, and served as its President from 2008 to 2011. Mr. Le utilized his hybrid of strong creative and development skill-sets
to build and manage a local team of talent to create websites, apps, motion graphics and rich media for worldwide advertising agencies
such as: Doner, MRM Worldwide, Campbell Ewald and Sarkissian Mason. Mr. Le was responsible for creating out-of-the box interactive
concepts, managing client expectations, and executing development with the highest level of standards. Prior to founding HEYVIET,
Mr. Le held a senior creative position at Doner Advertising from 2006 to 2008 and was responsible for executing the interactive
creative process from start to finish. Doner later became a HEYVIET client in 2008.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Steven S. Hubbard</B> is one of Xhibit's
co-founders and has served as the Director of Business Development since August 2011. Prior to joining Xhibit, from 2007 to 2010,
Mr. Hubbard was the Director of Business Development for The Grid Records, a provider of production and publishing services to
many of the world's leading entertainment brands, where he established strategic marketing partnerships with major celebrities
and athletes. Also, during his tenure at The Grid Records, in 2008 Mr. Hubbard co-founded The Grid Productions<B><I>, </I></B>a
music publisher,<B><I> </I></B>where he served as Director of Business until 2011. At The Grid Productions, Mr. Hubbard successfully
assembled a group of investors, secured publishing assets and structured numerous licensing partnerships with major music labels,
film studios and television studios. Mr. Hubbard holds a BS in Business and Communications from Arizona State University. While
at Arizona State University, Mr. Hubbard studied marketing, e-commerce, and entrepreneurship.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Mirco Pasqualini</B> has been the Creative
Digital Architect of Xhibit's digital marketing and social influence platforms since October 2011. Prior to joining Xhibit, from
2010 to 2011, Mr. Pasqualini served as the Interactive Experience and Creative Director for the award winning Mobile &amp; Emerging
Platforms Group of R/GA, an international digital advertising agency. From 2009 to 2010, Mr. Pasqualini served as Creative Director
for Arc Worldwide in Turin, Italy designing innovative digital products for globally recognized brands such as Nike, MasterCard,
The Wall Street Journal, Fiat and Chrysler. From 2003 to 2008, Mr. Pasqualini was a freelance consultant providing design and implementation
services for digital interactive projects to various high profile clients.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During his 13 years of industry experience,
Mr. Pasqualini has received numerous industry awards including the Cannes Lions and has been featured in prominent digital communication
publications such as Communication Arts magazine and Creative magazine for his pioneering work in redefining the future of the
mobile social experience and interactive television on the web.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Mr. Pasqualini received a Certificate of
Business Technology from the Instituto Tecnico Commerciale in Venice, Italy where his research and studies concentrated on information
technology systems and business management.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Executive Compensation</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The following summary compensation table
sets forth information concerning compensation for services rendered in all capacities during Xhibit's past two fiscal years awarded
to, earned by or paid to each of the following individuals by Xhibit or its subsidiaries. Salary and other compensation for these
officers, employees and former officers are set by Xhibit's Manager, except for employee compensation which is set by officers
of Xhibit.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Summary Compensation Table</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 7pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">Nonqualified</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">Non-equity</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">deferred</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">Stock</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">Option</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">incentive&nbsp;plan</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">compensation</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">All&nbsp;other</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">Salary</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">Bonus</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">awards</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">awards</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">compensation</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">earnings</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">compensation</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">Total</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: Black 1pt solid">Name&nbsp;and&nbsp;principal&nbsp;position</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; border-bottom: Black 1pt solid">Year</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">($)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">($)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">($)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">($)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">($)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">($)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">($)(1)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">($)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; width: 14%">Chris Richarde,</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 6%; text-align: center">2011</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 6%; text-align: right">131,650</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 6%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 6%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 6%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; text-align: right">1,400,914</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; text-align: right">1,532,564</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">CEO of Xhibit LLC</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">2010</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">85,250</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">854,891</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">940,141</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Dzenis Softic</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">2011</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,318.384</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,318,384</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP STYLE="text-align: left">Chief Technology Officer of Xhibit LLC</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Jason Hrissikopoulos,</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">2011</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">120,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">560,377</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">680,377</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">President of Stacked Digital, LLC</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">2010</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">60,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">221,881</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">281,881</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Rich Tarjeft</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">2011</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">125,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">125,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Director of Publisher Relations of SpyFire Interactive, LLC</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.13in"></TD><TD STYLE="width: 0.75in">(1)</TD><TD STYLE="text-align: justify">Consists of distributions received as a result of the listed individual's ownership of equity in
Xhibit, and not as compensation.</TD></TR></TABLE>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Employment Agreements</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">NB has entered into
at-will employment agreements with its new CEO, Chris Richarde, and its new CFO, Michael Schifsky, effective as of the closing
of the Merger. Mr. Richarde's base salary is $350,000 annually, and Mr. Schifsky's is $204,000 annually. Both Mr. Richarde and
Mr. Schifsky have no severance arrangements and are eligible for an annual bonus to be established in the future by the Board.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Darin Toone serves
as Xhibit's Chief Operating Officer under an at-will employment agreement with a base salary of $210,000 per year.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Dzenis Softic serves
as Xhibit's Chief Technology Officer under an at-will employment agreement with a base salary of $4,800 per year. Mr. Softic was
granted 1,582,060 Units in Xhibit as an incentive to receive the nominal salary he is paid and for transfer of certain intellectual
property.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Director Compensation</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As both of our directors
are also officers, they do not receive any additional compensation for their service on this Board.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Compensation Committee Interlocks
and Insider Participation</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">As a smaller reporting company, the Company
is not required to provide this disclosure.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Securities Ownership of Certain
Beneficial Owners and Management</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table
sets forth certain information regarding the beneficial ownership of the Company's common stock as of June 4, 2012 for (a) each
person known by the Company to be a beneficial owner of five percent or more of the outstanding common stock of the Company, (b)
each named executive officer, director and nominee for director of the Company, and (c) all directors and named executive officers
of the Company as a group. As of June 4, 2012, the Company had 66,583,676 shares of common stock and no shares of preferred stock
outstanding.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<!-- Field: Page; Sequence: 65; Value: 2 -->
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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">COMMON STOCK SHARE OWNERSHIP AS OF JUNE
4, 2012</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 95%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center">Name and Address of <BR> Beneficial Owner<SUP>(1)</SUP></TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">Amount of <BR> Common&nbsp;Shares<BR> Owned</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">Options or<BR> Warrants<BR> Exercisable<BR> Within 60 Days<BR> of June 4, 2012</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">Total Common<BR> Shares<BR> Beneficially<BR> Owned</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Percent of<BR> Common</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Shares</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Owned<SUP>(2)</SUP></P></TD><TD NOWRAP>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 40%; text-align: left">Chris Richarde, CEO</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">44,440,064</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">44,440,064</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">66.74</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Michael Schifsky, CFO</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,214,173</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,214,173</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1.82</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Dzenis Softic, CTO</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,000,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,000,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3.00</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Darin Toone, COO</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">700,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">700,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1.05</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">All Officers and Directors as a group (4 persons)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">48,354,237</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">48,354,237</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">72.62</TD><TD STYLE="text-align: left">%</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><SUP>(1)</SUP> &nbsp;&nbsp;&nbsp;Except as otherwise
noted, the address for each of these individuals is c/o Xhibit, LLC, 80 E. Rio Salado Parkway, Suite 115, Tempe, AZ 85281.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><SUP>(2)</SUP>&nbsp;&nbsp;&nbsp;&nbsp;Percentage ownership
is based on 66,583,676 shares of Common Stock outstanding on June 4, 2012.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Certain Relationships and Related
Transactions</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-weight: normal; font-style: normal">&nbsp;</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-weight: normal; font-style: normal">A
promissory note in the amount of $333,516.16 dated as of August 9, 2011 payable to Chris Richarde was paid in full as of April
10, 2012. Approximately $111,000 of this amount was forgiven in exchange for personal expenses not reimbursable by the Company.
</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-weight: normal; font-style: normal">&nbsp;</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-weight: normal; font-style: normal">The
Unit Exchange Agreement by and between Xhibit LLC, Hrizzo, LLC, SpyFire Interactive, LLC, and Stacked Digital, LLC dated August
8, 2011 allocated units to Chris Richarde and Jason Hrissikopoulos based on this respective ownership of the Companies acquired
by Xhibit LLC. Later, Mr. Hrissikopoulos agreed to take back Hrizzo, LLC and reduce the number of units allocated to him in exchange
for the cancellation of a substantial part of the units originally issued to him and cancellation of a promissory note as well.
Mr. Richarde was later issued additional units in exchange for the transfer of Social Bounce, LLC to the Company. None of these
transfers was reviewed by or subject to a fairness opinion from an independent investment banker or any other party but were instead
determined by the parties themselves. There is no assurance that an independent valuation may not have allocated the units differently.
Inherent conflicts of interest may have impacted the determination of how the units were valued. </FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-weight: normal; font-style: normal">&nbsp;</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-weight: normal; font-style: normal">ABC
Internet Media, a firm which provides software services and programming located in Bosnia owned by Dzenis Softic, Xhibit&rsquo;s
CTO, has been paid over $120,000 for services rendered to it over the past year. Management plans to retain several of these employees
full time in its software developers division in Bosnia once the subsidiary is incorporated there. However, until this transition
is complete the Company may be paying substantial amounts to this company.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company has also
entered into two promissory notes: one in the amount of $500,000 with a member of Xhibit who is also the father of an employee
<U>and</U> the second in the amount of $200,000 with a member of Xhibit, each due in September 2012 paying simple interest of 10%.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-weight: normal">Director
Independence</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Using the standards
of the NYSE Amex, which the Company is not subject to, the Company's Board has determined that no director qualifies under such
standards as an independent director. The Company did not consider any relationship or transaction between itself and its directors
not already disclosed in this report in making this determination.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Indemnification of Directors
and Officers</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company's Articles
of Incorporation provides to directors and officers indemnification to the full extent provided by law, and provide that, to the
extent permitted by Nevada law, a director will not be personally liable for monetary damages to the Company or its shareholders
for breach of his or her fiduciary duty as a director, except for liability for certain actions that may not be limited under Nevada
law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Insofar as indemnification
for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons pursuant
to the foregoing provisions, or otherwise, in the opinion of the Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Item 5.06.&nbsp;&nbsp;&nbsp;Change in Shell Company Status</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The information set
forth in Item 2.01 of this Current Report on Form 8-K is incorporated into this Item 5.06 in its entirety by reference.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; font-variant: small-caps; text-align: justify">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">ITEM&nbsp;8.01
Other Events</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As a result of the
Merger, the Registrant has moved its principal executive offices to 80 E. Rio Salado Parkway, Suite 115, Tempe, AZ 85281.<U> </U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On June 6, 2012, the
Company issued a press release announcing the closing of the Merger. A copy of the Company's press release is attached hereto as
Exhibit 99.1 and incorporated therein by this reference.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>ITEM 9.01 Exhibits</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Financial
Statements of Business Acquired</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Audited Financial Statements
of Xhibit, LLC for the years ended December 31, 2011 and 2010, filed herewith</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Reviewed Financial Statement
of Xhibit, LLC for the quarters ended March 31, 2012 and 2011, filed herewith.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Pro Forma
Financial Information</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Filed herewith.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Exhibits</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">2.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Merger Agreement dated
as of April 23, 2012, by and among NB Manufacturing, Inc., NB Manufacturing Subsidiary, LLC, Xhibit, LLC and a certain director
and officer of NB, incorporated by reference to the Form 8-K filed on April 18, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">2.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amendment to Merger Agreement
dated as of May 23, 2012 by and among NB Manufacturing, Inc., NB Manufacturing Subsidiary, LLC, Xhibit LLC, and a certain director
and officer of NB, filed herewith.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">2.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Articles of Merger, filed
with the Nevada Secretary of State on June 4, 2012, filed herewith.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">10.1&nbsp;&nbsp;&nbsp;List Management Agreement
between SpyFire Interactive LLC and AdCafe LLC dated August 6, 2012, filed herewith.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">10.2&nbsp;&nbsp;&nbsp;Exclusivity Agreement
between SpyFire Interactive LLC and Education Success dba AdCafe dated June 24, 2011, filed herewith.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">10.3&nbsp;&nbsp;&nbsp;Insertion Order Standard
Terms and Conditions between SpyFire Interactive and AdCafe, LLC dated June 24, 2011, filed herewith.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">10.4&nbsp;&nbsp;&nbsp;Unit Exchange Agreement
dated August 9, 2011, by and among Xhibit, LLC, Hrizzo, LLC Spyfire Interactive, LLC and Stacked Digital, LLC, filed herewith.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">10.5&nbsp;&nbsp;&nbsp;Settlement Agreement between
Xhibit, LLC and Jason Hrissikopoulos dated January 4, 2012, filed herewith.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">10.6&nbsp;&nbsp;&nbsp;Amendment #1 to Settlement
Agreement between Xhibit, LLC and Jason Hrissikopoulos dated January 17, 2012, filed herewith.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">10.7&nbsp;&nbsp;&nbsp;Promissory Note of Xhibit
LLC payable to Paul Hrissikopoulos dated March 27, 2012, filed herewith.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">10.8&nbsp;&nbsp;&nbsp;Promissory Note of Xhibit
LLC payable to Larry Eiteljorg dated May 29, 2012, filed herewith.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">16.1&nbsp;&nbsp;&nbsp;Letter from Weaver Martin
&amp; Samyn, LLC dated June 4, 2012, filed herewith.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">23.1&nbsp;&nbsp;&nbsp;Consent of Farber Hass
Hurley LLP dated June 5, 2012, filed herewith.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">99.1&nbsp;&nbsp;&nbsp;Press release of NB Manufacturing,
Inc. dated June 7, 2012, filed herewith.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>SIGNATURES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Pursuant to the requirements
of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Dated: June 6, 2012</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3in; text-indent: 0in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-indent: 0in; tab-stops: 3.25in 243.0pt 261.0pt right 6.0in">NB Manufacturing, Inc., a Nevada corporation</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-indent: 0in; tab-stops: 3.25in 243.0pt 261.0pt right 6.0in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%">&nbsp;</TD>
    <TD STYLE="width: 5%; text-indent: 0in; tab-stops: 3.25in 243.0pt 261.0pt right 6.0in; padding-bottom: 1pt">By:&nbsp;&nbsp;</TD>
    <TD STYLE="width: 45%; text-indent: 0in; tab-stops: 3.25in 243.0pt 261.0pt right 6.0in; text-decoration: none; border-bottom: Black 1pt solid">/s/ Chris Richarde</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-indent: 0in; tab-stops: 3.25in 243.0pt 261.0pt right 6.0in">&nbsp;</TD>
    <TD STYLE="text-indent: 0in; tab-stops: 3.25in 243.0pt 261.0pt right 6.0in">Chris Richarde, CEO</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-indent: 0in; tab-stops: 3.25in 243.0pt 261.0pt right 6.0in">By:</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-indent: 0in; tab-stops: 3.25in 243.0pt 261.0pt right 6.0in; text-decoration: none">/s/ Michael Schifsky</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-indent: 0in; tab-stops: 3.25in 243.0pt 261.0pt right 6.0in">&nbsp;</TD>
    <TD STYLE="text-indent: 0in; tab-stops: 3.25in 243.0pt 261.0pt right 6.0in">Michael Schifsky, CFO</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; color: #252525">REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; color: #252525">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">To the Members<BR>
Xhibit, LLC</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: #252525">We have audited the accompanying consolidated
balance sheet of Xhibit, LLC (the &ldquo;Company&rdquo;), as of December 31, 2011, and the related consolidated statements of income,
members&rsquo; equity and cash flows for the year then ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial statements based on our audit.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: #252525">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; color: #252525">We conducted our audit
in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.
The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.
Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company&rsquo;s
internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; color: #252525">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: #252525">In our opinion, the financial statements referred
to above present fairly, in all material respects, the financial position of Xhibit, LLC, as of December 31, 2011, and the results
of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the
United States of America.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: #252525">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: #252525"><I>/s/ Farber Hass Hurley LLP</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: #252525">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Camarillo, California</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">May 17, 2012</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center"><B>XHIBIT, LLC</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center"><B>CONSOLIDATED STATEMENT OF OPERATIONS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center"><B>Year Ended December 31, 2011</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2011</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 82%">Revenues</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 15%; text-align: right">6,351,384</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt">Cost of revenues</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">3,760,553</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Gross profit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,590,831</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Operating expenses:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 11pt">Sales and marketing</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">388,589</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: 11pt">General and administrative</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,481,846</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: 11pt">Research and development</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">49,820</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Total operating expenses</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">2,920,255</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left"> Loss from operations</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(329,424</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: 11pt">Interest expense</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">6,579</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt">Net Loss</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">(336,003</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><I>The accompanying notes are an integral
part of these financial statements.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center"><B>XHIBIT, LLC</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center"><B>CONSOLIDATED BALANCE SHEET</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center"><B>December 31, 2011</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2011</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold">Assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Current Assets:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 82%; text-indent: 11pt">Cash</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 15%; text-align: right">241,077</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 11pt">Accounts receivable, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">606,203</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: 11pt">Prepaid expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">197,297</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: 11pt">Accounts receivable, related party</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">8,750</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: 22pt">Total current assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,053,327</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: 22pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Other Assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 11pt">Security deposit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">32,731</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: 11pt">Property and equipment, net</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">31,036</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: 22pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt; text-indent: 22.1pt">Total Assets</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">1,117,094</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">Liabilities and Members' Equity</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Current Liabilities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: 11pt">Accounts payable and accrued expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">357,890</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 11pt">Accounts payable, related parties</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14,820</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: 11pt">Accrued interest, related party</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,579</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: 11pt">Note payable, related party</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">225,665</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: 22pt">Total current liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">604,954</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Other liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12,759</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Members' Equity</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">499,381</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt; text-indent: 22.1pt">Total Liabilities and Members' Equity</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">1,117,094</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><I>The accompanying notes are an integral
part of these financial statements.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center"><B>XHIBIT, LLC</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center"><B>CONSOLIDATED STATEMENT OF CASH
FLOWS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center"><B>Year Ended December 31, 2011</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2011</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Cash flows from operating activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 82%; text-align: left; text-indent: 11pt">Net loss</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 15%; text-align: right">(336,003</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-indent: 22pt">Depreciation</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,498</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: 22pt">Stock-based compensation</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,456,568</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Adjustments to reconcile net loss to net cash provided by operating activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 22pt">Accounts receivable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(398,587</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: 22pt">Prepaid expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(172,297</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 22pt">Other assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(32,731</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: 22pt">Accounts receivable, related party</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(8,750</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 22pt">Accounts payable and accrued expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">358,991</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: 22pt">Accounts payable, related parties</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14,820</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: 22pt">Other liabilities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">12,759</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">Net cash provided by (used in) operating activities</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">898,268</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Cash flows from investing activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: 11pt">Purchases of property and equipment</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(31,949</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">Net cash provided by (used in) investing activities</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">(31,949</TD><TD STYLE="font-weight: bold; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Cash flows from financing activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 11pt">Net proceeds from note payable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">225,665</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: 11pt">Member capital contribution</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,180,748</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: 11pt">Distributions to members</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(2,128,288</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">Net cash provided by (used in) financing activities</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">(721,875</TD><TD STYLE="font-weight: bold; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Net increase in cash</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">144,444</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Cash, beginning of year</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">96,633</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt">Cash, end of year</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">241,077</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Supplemental disclosure of Non-Cash Investing Actvity:</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Acquisition of Spyfire Interactive, LLC with units</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">249,517</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Acquisition of Stacked Digital, LLC with units</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">56,920</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Cash paid for:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>Interest</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><I>The accompanying notes are an integral
part of these financial statements.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center"><B>XHIBIT, LLC</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center"><B>CONSOLIDATED STATEMENT OF MEMBERS'
EQUITY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">Members'</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Equity</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 82%; font-weight: bold">Balance - December 31, 2010</TD><TD STYLE="width: 1%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="width: 1%; font-weight: bold; text-align: left">$</TD><TD STYLE="width: 15%; font-weight: bold; text-align: right">326,356</TD><TD STYLE="width: 1%; font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 11pt">Contributions from members</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,180,748</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: 11pt">Units issued for noncash compensation</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,456,568</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 11pt">Distribution to member</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,128,288</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: 11pt">Net loss</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(336,003</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; padding-bottom: 2.5pt">Balance - December 31, 2011</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">499,381</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><I>The accompanying notes are an integral
part of these financial statements.,</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;<B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>XHIBIT, LLC</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>DECEMBER 31, 2011</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 1 &ndash; ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Organization and Description of Business</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Xhibit, LLC (&ldquo;Xhibit&rdquo; or &ldquo;the Company&rdquo;)
was organized on July 18, 2011 as a Nevada limited liability company. On August 9, 2011 Xhibit entered into a Unit Exchange Agreement
whereby the members of of SpyFire Interactive, LLC (&ldquo;SpyFire&rdquo;) and Stacked Digital, LLC (&ldquo;Stacked&rdquo;) exchanged
100% of their membership units for 18,292,319 of the Company&rsquo;s units. Concurrent with this transaction, SpyFire and Stacked
became wholly-owned subsidiaries of the Company. There is common ownership and management among all three companies. The Company,
through its subsidiaries, is an online marketing and advertising company providing targeted and measurable online advertising campaigns
and programs for a broad base of advertisers and advertising agency customers. The Company enables marketers to advertise and sell
their products and services through major online marketing channels including display advertising and affiliate marketing networks.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Basis of Presentation and Consolidation</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The consolidated financial statements have been prepared on
an accrual basis of accounting. This basis of accounting recognizes revenues when earned and expenses when incurred and conforms
with U.S. generally accepted accounting principles (GAAP). The consolidated financial statements include the accounts of the Company
and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated. The consolidated financial
statements for 2011 represent the operations of Xhibit since inception and SpyFire and Stacked since January 1, 2011. See Notes
7 and 8.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Use of Estimates</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires management to make estimates and assumptions that affect
the amounts reported in the financial statements and accompanying notes. These estimates are based on management&rsquo;s knowledge
about current events and expectations about actions we may undertake in the future. Actual results could differ from those estimates.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Concentrations and Credit Risk</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Financial instruments that potentially subject the Company to
significant concentration of credit risk consist primarily of cash and accounts receivable. All cash balances are maintained in
a single bank and may from time to time exceed Federal Deposit Insurance Corporation (&ldquo;FDIC&rdquo;) insurance limits. Regarding
trade accounts receivable, the Company minimizes its credit risk by performing credit evaluations of its customers and or limiting the amount of credit
extended. Accounts receivable balances are carried net of any allowances for doubtful accounts.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>XHIBIT, LLC</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>DECEMBER 31, 2011</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 1 &ndash; ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (Continued)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Concentrations and Credit Risk (Continued)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Two customers in 2011 represented approximately 57% (46% and
11%) of total revenues. The accounts receivable from four customers were approximately 76% (29%, 19%, 15% and 13%) of total accounts
receivable as of December 31, 2011. No other customers represented greater than 10% of total revenues in 2011 or total accounts
receivable at December 31, 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Financial Instruments</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The carrying value of the Company&rsquo;s financial instruments,
including cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and note payable approximate fair
value because of the short maturities of those instruments.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Cash and Cash Equivalents</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">For purposes of the consolidated statement of cash flows, the
Company considers all short-term investments with original maturity of three months or less to be cash equivalents.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Accounts Receivable and Allowance for Doubtful Accounts</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company carries its accounts receivable at cost, less an
allowance for doubtful accounts. On a period basis, management evaluates accounts receivable balances and establishes an allowance
for doubtful accounts based on history of past write-offs, collections and current credit considerations. Interest is not accrued
on overdue receivables nor is collateral obtained on any amounts due.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Management determined that the allowance for doubtful accounts
was $0 at December 31, 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Prepaid Expenses </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Prepaid expenses represent primarily prepaid rent for 2012.
See Note 4.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>XHIBIT, LLC</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>DECEMBER 31, 2011</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 1 &ndash; ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (Continued)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Computers and Office Equipment</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Computers and office equipment are carried at cost, less accumulated
depreciation. Maintenance and repairs are expensed as incurred. Depreciation is computed using the straight-line method over the
estimated useful lives of the assets. The estimated useful lives for computers office equipment are three and five years, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Revenue Recognition</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company recognizes revenue when the following criteria have
been met: persuasive evidence of an arrangement exists, no significant Company obligations remain, collection of the related receivable
is reasonably assured, and the fees are fixed or determinable. The Company recognizes revenue at the time services are performed
and sales are generated on behalf of their customers. Revenue is presented net of discounts and allowances.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Advertising</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Advertising costs are expensed as incurred. Such expenses for
the year ended December 31, 2011 were $271,856.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Research and Development Costs</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Research and development costs are expensed as incurred. Research
and development expenses were $49,820 for the year ended December 31, 2011. See Note 6.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Stock-Based Compensation</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company grants units for services and recognizes compensation
expense on the value of the services or value of the units issued, whichever is more readily determinable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Income Taxes</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company is a limited liability company, and therefore is
not subject to income tax, as any income or loss is allocated to and included in the personal income tax return of its members.
Accordingly, no provision is made for income taxes in the financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>XHIBIT, LLC</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>DECEMBER 31, 2011</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 1 &ndash; ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (Continued)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Segment Reporting</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company operates in one segment, internet marketing. All
revenues and operations are within the United States.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>New Accounting Standards</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">There were no recently issued accounting standards that are
expected to have a material impact on the financial statements of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 2 - PROPERTY AND EQUIPMENT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Property and equipment balance as of December 31, 2011 is as
follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 87%; text-align: left">Computers and Office Equipment</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">40,295</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Accumulated Depreciation</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(8,811</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 2.5pt">Total</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">31,484</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Depreciation expense for the year ended December 31, 2011 was
$3,498.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 3 &ndash; NOTE PAYABLE RELATED PARTY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">On August 9, 2011 the Company issued a promissory note in the
amount of $333,516 to one of its members. The note carries a simple interest rate of 5% per annum and was due and payable on September
30, 2011. The maturity date on the balance due at December 31, 2011 ($225,665) was extended to June 30, 2012. On April 10, 2012,
the Note along with all accrued interest was paid in full.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>XHIBIT, LLC</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>DECEMBER 31, 2011</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 4 &ndash; COMMITMENTS AND CONTINGENCIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">On November 9, 2011 the Company entered into a lease agreement
for corporate office space in Tempe, Arizona. Under the terms of the agreement, the Company made a payment of $250,000 in 2011
for prepaid rent to be applied to the first (9) nine months&rsquo; rent beginning with the commencement date of June 1, 2012. Future
minimum lease payments as of December 31, 2011 for the next five years and thereafter are as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: Black 1pt solid">Year ending December 31,</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; text-align: center">Amount</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-bottom: 1pt; text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 87%; text-align: left">2012</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">125,022</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">2013</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">347,183</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">2014</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">368,923</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">2015</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">400,545</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">2016</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">432,167</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt">Thereafter</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">668,015</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 2.5pt">Total</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">2,341,855</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 5 - MEMBERSHIP INTERESTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As specified in the Company&rsquo;s limited liability company
agreement, the Company is authorized to issue additional units as need. Each unit represents a pro rata ownership interest in the
Company&rsquo;s profit, losses and distributions. Prior to the acquisition by the Company, the founders of Spyfire and Stacked
contributed $298,748 and $7,500, respectively, to equity.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">On August 9, 2011, the Company issued 814,810 units to three
individuals in connection with the formation of the Company. These units have been recorded as Founders&rsquo; units of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">On August 24, 2011, the Company issued 300,000 units in exchange
for $250,000. In October 2011, the Company issued 750,000 units in exchange for $625,000.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">On November 17, 2011, the Company issued 1,747,882 units to
employees for services rendered. The units had a fair market value of $1,456,568 on the date of issuance. As such, the Company
has included this amount as non-cash compensation expense in the statement of income for the year ended December 31, 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As of December 31, 2011, the Company had 21,905,011 membership
units issued and outstanding held by ten individuals.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>XHIBIT, LLC</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>DECEMBER 31, 2011</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 6 &ndash; RELATED PARTY TRANSACTIONS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">During 2011, the Company paid Hrizzo, LLC (&ldquo;Hrizzo&rdquo;)
$1,250 for certain customer data lists and advanced the company $8,750 for general working capital. Hrizzo is owned 100% one of
the Company&rsquo;s members. Also during 2011, the Company paid $49,820 to a software development company that is owned by its
Chief Technology Officer.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 7 &ndash; ACQUISITION OF SPYFIRE, LLC AND STACKED DIGITAL,
LLC</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">On August 9, 2011, the Company completed its acquisition of
SpyFire and Stacked. The Company issued 15,251,941 Company units for the acquisition of SpyFire and 3,040,378 Company units for
the acquisition of Stacked. Due to the common ownership between SpyFire and Stacked (the acquired companies) the assets and liabilities
have been recorded at their historical cost basis as of the acquisition date. Below is a summary of the net assets acquired for
each company:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>SPYFIRE</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 87%">Cash</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">57,071</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Accounts Receivable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">227,289</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Property and Equipment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,144</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Other Assets</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">4,973</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">294,477</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Liabilities Assumed</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">44,960</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt">Net Assets Acquired</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">249,517</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>STACKED</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 87%">Cash</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">32,567</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Accounts Receivable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">65,580</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Property and Equipment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,733</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Other Assets</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">101,880</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Liabilities Assumed</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">44,960</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt">Net Assets Acquired</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">56,920</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>XHIBIT, LLC</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>DECEMBER 31, 2011</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 8 &ndash; SUBSEQUENT EVENTS (UNAUDITED) </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">On April 12, 2012 the Company entered into a definitive merger
agreement with NB Manufacturing, Inc. (&ldquo;NBM&rdquo;), a publically traded shell company currently traded on the OTCBB under
the symbol NBMF. Under the terms of the Merger Agreement, NB and Xhibit propose to engage in a reverse triangular merger resulting
in Xhibit becoming a wholly-owned subsidiary of NBM and the members of Xhibit becoming the majority owners of NBM, holding approximately
83% of the total outstanding shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Completion of the merger is contingent upon both parties satisfying
certain conditions in order for the Agreement to become effective.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">On March 27, 2012 the Company issued a Promissory Note in the
amount of $500,000 to the father of one of its members. The Promissory Note bears interest at a simple rate of 10% and is due and
payable on September 30, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company is negotiating a merger agreement with Social Bounce,
LLC, an internet social media company owned by the Company&rsquo;s majority shareholder, whereby the Company will issue 21,905,011
of its units to acquire a 100% interest in Social Bounce. The merger is expected to close in May 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; color: #252525"><img src="header1.jpg"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; color: #252525">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; color: #252525">REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; color: #252525">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">To the Sole Member</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">SpyFire Interactive, LLC</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: #252525">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: #252525">We have audited the accompanying balance sheets
of SpyFire Interactive, LLC (the &ldquo;Company&rdquo;), as of December 31, 2010 and 2009, and the related statements of income,
member&rsquo;s equity and cash flows for the years then ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial statements based on our audit.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; color: #252525">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; color: #252525">We conducted our audits
in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.
The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.
Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company&rsquo;s
internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: #252525">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: #252525">In our opinion, the financial statements referred
to above present fairly, in all material respects, the financial position of SpyFire Interactive, LLC, as of December 31, 2010
and 2009, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles
generally accepted in the United States of America.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: #252525">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: #252525"><img src="sig1.jpg"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: #252525">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Camarillo, California</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">February 3, 2011</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SPYFIRE INTERACTIVE, LLC</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>BALANCE SHEETS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center">December&nbsp;31,</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2010</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2009</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold">Assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Current Assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 70%; text-indent: 11pt">Cash</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">87,042</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">5,054</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 11pt">Accounts receivable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">122,504</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">20,538</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: 11pt">Accounts receivable, related party</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">6,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 22pt">Total current assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">209,546</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">31,592</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-indent: 22pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Other assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: 22pt">Computer and equipment, net</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">2,585</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt">Total Assets</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">212,131</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">31,592</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">Liabilities and Member's Equity</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Current Liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: 11pt">Accounts payable and accrued expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">349</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">7,044</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Member's Equity</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">211,782</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">24,548</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt">Total Liabilities and Member's Equity</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">212,131</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">31,592</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">See accompanying notes to the financial
statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SPYFIRE INTERACTIVE, LLC</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>STATEMENTS OF INCOME</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center">Year&nbsp;Ended&nbsp;December&nbsp;31,</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2010</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2009</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 70%">Revenues</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">1,971,406</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">215,268</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt">Cost of revenues</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">702,424</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">104,834</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Gross profit</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">1,268,982</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">110,434</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Operating expenses:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 11pt">Sales and marketing</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">30,445</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: 11pt">General and administrative</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">198,304</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">54,840</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Total operating expenses</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">228,749</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">54,840</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt">Net Income</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">1,040,233</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">55,594</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">See accompanying notes to the financial
statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SPYFIRE INTERACTIVE, LLC</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>STATEMENT OF MEMBER'S EQUITY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">Member's</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Equity</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 85%; font-weight: bold">Balance - December 31, 2008</TD><TD STYLE="width: 1%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="width: 1%; font-weight: bold; text-align: left">$</TD><TD STYLE="width: 12%; font-weight: bold; text-align: right">28,336</TD><TD STYLE="width: 1%; font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Contributions from member</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">48,185</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: 11pt">Distribution to member</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(107,567</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: 11pt">Net income</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">55,594</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold">Balance - December 31, 2009</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">24,548</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Contributions from member</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">413,820</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: 11pt">Distribution to member</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,266,819</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: 11pt">Net income</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,040,233</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; padding-bottom: 2.5pt">Balance - December 31, 2010</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">211,782</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">See accompanying notes to the financial
statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SPYFIRE INTERACTIVE, LLC</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>STATEMENTS OF CASH FLOWS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center">Year&nbsp;Ended&nbsp;December&nbsp;31,</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2010</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2009</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">Cash flows from operating activities:</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 70%; text-align: left; padding-left: 9pt">Net income </TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">1,040,233</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">55,594</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 9pt">Depreciation</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,293</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Adjustments to reconcile net income to net cash provided by operating activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: 11pt">Changes in accounts receivable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(95,966</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(5,756</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 11pt">Changes in accounts receivable, related party</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(6,000</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: 11pt">Accounts payable and accrued expenses</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(6,695</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">4,299</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt">Net cash provided by operating activities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">938,865</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">48,137</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Cash flows from investing activities:</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-bottom: 1pt; padding-left: 9pt">Purchase of computer</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(3,878</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt">Net cash used in investing activities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(3,878</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">-</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Cash flows from financing activities:</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: 11pt">Member capital contribution</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">413,820</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">48,185</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: 11pt">Distribution to member</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1,266,819</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(107,567</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt">Net cash used in financing activities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(852,999</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(59,382</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Net increase in cash</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">81,988</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(11,245</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Cash, beginning of year</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">5,054</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">16,299</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt">Cash, end of year</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">87,042</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">5,054</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">See accompanying notes to the financial
statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

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<P STYLE="margin: 0">&nbsp;<B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SPYFIRE INTERACTIVE, LLC</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES TO FINANCIAL STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>DECEMBER 31, 2010 AND 2009</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 1 &ndash; ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Organization </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">SpyFire Interactive, LLC (the &ldquo;Company&rdquo;) was organized
in October 2005 as a Nevada limited liability company. The Company is an online marketing and advertising company providing targeted
and measurable online advertising campaigns and programs for a broad base of advertisers and advertising agency customers. The
Company enables marketers to advertise and sell their products and services through major online marketing channels including display
advertising and affiliate marketing networks.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Basis of Presentation</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The financial statements have been prepared on an accrual basis
of accounting. This basis of accounting recognizes revenues when earned and expenses when incurred, with conforms to accounting
principles generally accepted in the United States of America. Management has evaluated subsequent events through February 3, 2012,
the date on which the financial statements were available to be issued.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Cash and Cash Equivalents</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">For purposes of the statement of cash flows, the Company considers
all short-term investments with original maturity of three months or less to be cash equivalents.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Allowance for Doubtful Accounts</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company carries its accounts receivable at cost, less an
allowance for doubtful accounts. On a period basis, management evaluates accounts receivable balances and establishes and allowance
for doubtful accounts based on history of past write-offs, collections and current credit considerations. Interest is not accrued
on overdue receivables nor is collateral obtained on any amounts due.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Management determined that the allowance for doubtful accounts
was $0 at December 31, 2010 and 2009.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Credit Risk</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Financial instruments that potentially subject the Company to
significant concentration of credit risk consist primarily of cash and accounts receivable. All cash balances are maintained in
a single bank and may from time to time exceed Federal Deposit Insurance Corporation (&ldquo;FDIC&rdquo;) insurance limits. Regarding
trade accounts receivable, the Company minimizes its credit risk by performing credit evaluations of its customers and or limiting
the amount of credit extended. Accounts receivable balances are carried net of any allowances for doubtful accounts.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Computers and Office Equipment</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Computers and Office Equipment is carried at cost, less accumulated
depreciation. Maintenance and repairs are expensed as incurred. Computers and office equipment that is retired, damaged beyond
repair or, and the related gain or loss, if any, is taken into income currently. Depreciation is computed using the straight-line
method over the estimated useful lives of the assets. The estimated useful lives for computers and office equipment are three and
five years, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Use of Estimates</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America 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.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Financial Instruments</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The carrying value of the Company&rsquo;s financial instruments,
including cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate fair value because
of the short maturities of those instruments.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Revenue Recognition</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company recognizes revenue when the following criteria have
been met: persuasive evidence of an arrangement exists, no significant Company obligations remain, collection of the related receivable
is reasonably assured, and the fees are fixed or determinable. The Company recognizes revenue at the time services are performed
and sales are generated on behalf of their customers. Revenue is presented net of discounts and allowances.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Income Taxes</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company is a limited liability company, and therefore is
not subject to income tax, as any income or loss is allocated to, and included in, the personal income tax return of its single
member. Accordingly, no provision is made for income taxes in the financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 2 - COMPUTER AND OFFICE EQUIPMENT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Computers and office equipment balances as of December 31, 2010
and 2009 are as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">2010</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">2009</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 70%; text-align: left">Computers and Office Equipment</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">7,878</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">4,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Accumulated Depreciation</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(5,293</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(4,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-bottom: 2.5pt">Total</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">2,585</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Depreciation expense for the years ended December 31, 2010 and
2009 was $1,293 and zero, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 3 - MEMBERSHIP INTERESTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As of December 31, 2010 and 2009, the Company had 10,000,000
membership units issued and outstanding. All units were held by a single member.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 4 &ndash; RELATED PARTY TRANSACTIONS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">During 2010, the Company entered into certain transactions with
Stacked Digital, LLC (&ldquo;Stacked&rdquo;),Hrizzo, LLC (&ldquo;Hrizzo&rdquo;), and Eclipse LLC (&ldquo;Eclipse&rdquo;), each
a related party. Stacked is owned 50% by the sole member of the Company and 50% by the sole member Hrizzo. Eclipse is owned 100%
by the sole member of Hrizzo. During 2010, Stacked paid the Company $25,000 for certain consulting services; the Company paid Hrizzo,
LLC $24,500 for customer data lists; and Eclipse paid the Company $12,000 for data purchases.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">During 2009, Eclipse entered into a revenue transaction to purchase
$6,000 of data from the Company. This amount was still owed at 12/31/09, and is included in the Accounts Receivable, related party
balance on the balance sheet.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 5&mdash;CONCENTRATIONS </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company receives significant portions of its revenue from
a couple of large businesses. Should any of these customers&rsquo; businesses fail, the Company&rsquo;s business would be adversely
affected. As of December 31, 2010, two customers represented approximately 51% and 17%, respectively, of trade receivables. For
the year ended December 31, 2010, two customers represented approximately 25%, and 10%, respectively, of net sales.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As of December 31, 2009, four customers represented approximately
29%, 28%, 19%, and 16%, respectively, of trade receivables. For the year ended December 31, 2009, one customer represented approximately
13% of net sales.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 6 &ndash; SUBSEQUENT EVENT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">On August 9, 2011 the sole member of the Company entered into
a Unit Exchange Agreement with Xhibit, LLC (&ldquo;Xhibit&rdquo;) whereby Xhibit acquired 100% of the issued and outstanding membership
interests of the Company. Upon completion of the Unit Exchange Agreement, the sole member of the Company now has a controlling
interest in Xhibit.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; color: #252525"><img src="header.jpg"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; color: #252525">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; color: #252525">REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; color: #252525">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">To the Members</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Stacked Digital, LLC</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: #252525">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: #252525">We have audited the accompanying balance sheet
of Stacked Digital, LLC (the &ldquo;Company&rdquo;), as of December 31, 2010, and the related statements of income, members&rsquo;
equity and cash flows for the year then ended. These financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on our audit.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; color: #252525">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; color: #252525">We conducted our audit
in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.
The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.
Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company&rsquo;s
internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: #252525">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: #252525">In our opinion, the financial statements referred
to above present fairly, in all material respects, the financial position of Stacked Digital, LLC, as of December 31, 2010, and
the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted
in the United States of America.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: #252525">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: #252525"><img src="sig.jpg"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: #252525">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Camarillo, California</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">February 3, 2012</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>STACKED DIGITAL, LLC</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>BALANCE SHEET</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>AS OF DECEMBER 31, 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold">Assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Current assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 85%; text-indent: 11pt">Cash</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">9,591</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 11pt">Accounts receivable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">85,112</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: 11pt">Prepaid expense</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">25,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 22pt">Total current assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">119,703</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt">Total Assets</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">119,703</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Liabilities and Members' Equity</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: 11pt">Accounts payable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,129</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: 11pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9pt">Members' equity</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">114,574</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt">Total Liabilities and Members' Equity</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">119,703</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">See accompanying notes to the financial
statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>STACKED DIGITAL, LLC</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>STATEMENT OF INCOME</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>APRIL 12, 2010 (DATE OF INCEPTION) TO
DECEMBER 31, 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 85%">Revenues</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">396,314</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt">Cost of revenues</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">86,474</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Gross profit</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">309,840</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Operating expenses:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 11pt">Sales and marketing</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">163,280</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: 11pt">General and administrative</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">32,441</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Total operating expenses</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">195,721</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt">Net Income</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">114,119</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">See accompanying notes to the financial
statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>STACKED DIGITAL, LLC</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>STATEMENT OF MEMBERS' EQUITY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">Members'</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Equity</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold">Balance - April 12, 2010 (date of inception)</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">$</TD><TD STYLE="font-weight: bold; text-align: right">-</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 85%; text-align: left; text-indent: 11pt">Member contributions</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">500</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: 11pt">Member distributions</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(45</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: 11pt">Net income</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">114,119</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; padding-bottom: 2.5pt">Balance - December 31, 2010</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">114,574</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">See accompanying notes to the financial
statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>STACKED DIGITAL, LLC</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>STATEMENT OF CASH FLOWS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>APRIL 12, 2010 (DATE OF INCEPTION) TO
DECEMBER 31, 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">Cash flows from operating activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 85%; text-align: left">Net income (loss)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">114,119</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Adjustments to reconcile net income to net cash provided by operating activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Changes in accounts receivable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(85,112</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Changes in accounts payable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,129</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Prepaid expenses</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(25,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt">Net cash provided by operating activities</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: right">9,136</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">Cash flows from financing activities:</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Member capital contribution</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">500</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Distribution to member</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(45</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt">Net cash provided by financing activities</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: right">455</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Net increase in cash</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,591</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt">Cash, beginning of period</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt">Cash, end of year</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">9,591</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">See accompanying notes to the financial
statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>



<P STYLE="margin: 0"></P>

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<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>STACKED DIGITAL, LLC</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES TO FINANCIAL STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>DECEMBER 31, 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 1 &ndash; ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Organization </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Stacked Digital, LLC (the &ldquo;Company&rdquo;) was organized
on April 12, 2010 as a Washington limited liability company. The Company conducts focused permission-based email marketing campaigns
designed to drive customer traffic to its client&rsquo;s websites.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Basis of Presentation</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The financial statements have been prepared on an accrual basis
of accounting. This basis of accounting recognizes revenues when earned and expenses when incurred, with conforms to accounting
principles generally accepted in the United States of America. Management has evaluated subsequent events through February 3, 2012,
the date on which the financial statements were available to be issued.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Cash and Cash Equivalents</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">For purposes of the statement of cash flows, the Company considers
all short-term investments with original maturity of three months or less to be cash equivalents.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Allowance for Doubtful Accounts</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company carries its accounts receivable at cost, less an
allowance for doubtful accounts. On a period basis, management evaluates accounts receivable balances and establishes and allowance
for doubtful accounts based on history of past write-offs, collections and current credit considerations. Interest is not accrued
on overdue receivables nor is collateral obtained on any amounts due.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Management determined that the allowance for doubtful accounts
was $0 at December 31, 2010.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Credit Risk</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Financial instruments that potentially subject the Company to
significant concentration of credit risk consist primarily of cash and accounts receivable. All cash balances are maintained in
a single bank and may from time to time exceed Federal Deposit Insurance Corporation (&ldquo;FDIC&rdquo;) insurance limits. Regarding
trade accounts receivable, the Company minimizes its credit risk by performing credit evaluations of its customers and or limiting
the amount of credit extended. Accounts receivable balances are carried net of any allowances for doubtful accounts.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Use of Estimates</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America 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.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Financial Instruments</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The carrying value of the Company&rsquo;s financial instruments,
including cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate fair value because
of the short maturities of those instruments.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Revenue Recognition</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company recognizes revenue when the following criteria have
been met: persuasive evidence of an arrangement exists, no significant Company obligations remain, collection of the related receivable
is reasonably assured, and the fees are fixed or determinable. The Company recognizes revenue at the time services are performed
and sales are generated on behalf of their customers. Revenue is presented net of discounts and allowances.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Income Taxes</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company is a limited liability company, and therefore is
not subject to income tax, as any income or loss is allocated to and included in the personal income tax returns of its two members.
Accordingly, no provision is made for income taxes in the financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 2 - MEMBERSHIP INTERESTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As of December 31, 2010, the Company had 10,000 membership units
issued and outstanding held by two individuals, each holding a 50% interest.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 3 &ndash; RELATED PARTY TRANSACTIONS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">During 2010 the Company entered into certain transactions with
SpyFire Interactive, LLC (&ldquo;SpyFire&rdquo;), and Hrizzo, LLC (&ldquo;Hrizzo&rdquo;), each a related party. One of the members
of the Company is also the sole member of SpyFire, and the other member of the Company is also the sole member of Hrizzo. During
2010, the Company paid SpyFire $25,000 for certain consulting services, and received approximately $15,000 from SpyFire for data
purchases. Also during 2010, the Company paid Hrizzo $25,000 for data purchases.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 4 &ndash; CONCENTRATIONS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company receives significant portions of its revenue from
a few large customers. Should any of these customers&rsquo; businesses fail, the Company&rsquo;s business would be adversely affected.
As of December 31, 2010, four customers represented approximately 41%, 21%, 20%, and 10%, respectively, of trade receivables. For
the year ended December 31, 2010, two customers represented approximately 25% and 22%, respectively, of net sales.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 5 &ndash; SUBSEQUENT EVENT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">On August 9, 2011 the members of the Company entered into a
Unit Exchange Agreement with Xhibit, LLC (&ldquo;Xhibit&rdquo;) whereby Xhibit acquired 100% of the issued and outstanding membership
interests of the Company. Upon completion of the Unit Exchange Agreement, one of the members of the Company now has a controlling
interest in Xhibit, LLC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="margin: 0"></P>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center"><B>Condensed Consolidated Statement
of Operations of Xhibit, LLC for the Quarter Ended March 31, 2012 and Condensed Combined Statement of Operations for SpyFire Interactive,
LLC and Stacked Digital, LLC for the Quarter Ended March 31, 2011</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center">Three-month Period</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Ended March 31,</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2012</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2011</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 64%">Revenues</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 15%; text-align: right">2,162,334</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 15%; text-align: right">870,315</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt">Cost of revenues</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,427,340</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">274,398</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Gross profit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">734,994</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">595,917</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Operating expenses:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 11pt">Sales and marketing</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">165,983</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">31,988</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: 11pt">General and administrative</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">670,662</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">98,715</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: 11pt">Research and development</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">87,326</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">9,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Total operating expenses</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">923,971</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">139,703</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Income (loss) from operations</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(188,977</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">456,214</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: 11pt">Interest expense</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">4,561</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt">Net Income (Loss)</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">(193,538</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">)</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">456,214</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center"><B>Xhibit, LLC</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center"><B>Condensed Consolidated Balance
Sheets</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">March 31, 2012</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">December 31, 2011</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold">Assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Current Assets:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 64%; text-indent: 11pt">Cash</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 15%; text-align: right">569,563</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 15%; text-align: right">241,077</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 11pt">Accounts receivable, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">644,563</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">606,203</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: 11pt">Prepaid expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">128,742</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">197,297</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: 11pt">Accounts receivable, related party</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">8,150</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">8,750</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: 22pt">Total current assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,351,018</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,053,327</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: 22pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Other assets:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 11pt">Security deposit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">32,731</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">32,731</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: 11pt">Property and equipment, net</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">78,600</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">31,036</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: 22pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt; text-indent: 22.1pt">Total Assets</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">1,462,349</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">1,117,094</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">Liabilities and Members' Equity</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Current Liabilities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: 11pt">Accounts payable and accrued expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">414,911</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">357,890</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 11pt">Accounts payable, related party</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14,820</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: 11pt">Accrued interest, related party</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,140</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,579</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: 11pt">Notes payable, related party</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">725,665</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">225,665</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: 22pt">Total current liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,151,716</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">604,954</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: 22pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Other liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">31,897</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12,759</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Members' Equity</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">278,736</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">499,381</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt; text-indent: 22.1pt">Total Liabilities and Members' Equity</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">1,462,349</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">1,117,094</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center"><B>Condensed Consolidated Statement
of Cash Flows of Xhibit, LLC for the Quarter Ended March 31, 2012 and Condensed Combined Statement of Cash Flows for SpyFire Interactive,
LLC and Stacked Digital, LLC for the Quarter Ended March 31, 2011</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center">Three-month Period</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Ended March 31,</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2012</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2011</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Cash flows from operating activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 64%; text-align: left; text-indent: 11pt">Net income (loss)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 15%; text-align: right">(193,538</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 15%; text-align: right">456,214</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-indent: 22pt">Depreciation</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,539</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">687</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Adjustments to reconcile net income to net cash provided by operating activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: 22pt">Accounts receivable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(36,427</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(123,814</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 22pt">Prepaid expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">68,555</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: 22pt">Accounts receivable, related party</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">600</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 22pt">Accounts payable and accrued expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">78,787</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">173,283</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: 22pt">Accounts payable, related party</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(14,820</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt">Net cash provided by (used in) operating activities</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: right">(91,304</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left">)</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: right">531,370</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Cash flows from investing activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: 11pt">Purchases of property and equipment</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(53,103</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(3,733</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt">Net cash used in investing activities</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: right">(53,103</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left">)</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: right">(3,733</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Cash flows from financing activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: 11pt">Net proceeds from note payable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">500,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 11pt">Member capital contribution</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,500</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: 11pt">Distributions to member</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(27,107</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(333,003</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Net cash provided by (used in) financing activities</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">472,893</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">(325,503</TD><TD STYLE="font-weight: bold; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Net increase in cash</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">328,486</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">202,134</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Cash, beginning of year</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">241,077</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">96,633</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; padding-bottom: 2.5pt">Cash, end of period</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">569,563</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">298,767</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center"><B>Xhibit, LLC</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center"><B>Consolidated Statement of Members'
Equity</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center"><B>For the Quarter Ended March
31, 2012</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 82%; font-weight: bold">Balance - December 31, 2011</TD><TD STYLE="width: 1%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="width: 1%; font-weight: bold; text-align: left">$</TD><TD STYLE="width: 15%; font-weight: bold; text-align: right">499,381</TD><TD STYLE="width: 1%; font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Contributions from member</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Distribution to member</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(27,107</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9pt">Net income</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(193,538</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold">Balance - March 31, 2012</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">$</TD><TD STYLE="font-weight: bold; text-align: right">278,736</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS OF XHIBIT, LLC FOR THE QUARTER ENDED MARCH 31, 2012 AND THE BALANCE SHEET DATED DECEMBER 31, 2011 AND THE CONDENSED
COMBINED FINANCIAL STATEMENTS OF OPERATIONS AND CASH FLOWS OF SPYFIRE INTERACTIVE, LLC AND STACKED DIGITAL, LLC FOR THE QUARTER
ENDED MARCH 31, 2011</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 1 &ndash; THE COMPANY AND BASIS OF PRESENTATION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Organization and Description of Business </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Xhibit, LLC (&ldquo;Xhibit&rdquo; or &ldquo;the Company&rdquo;)
was organized on July 18, 2011 as a Nevada limited liability company. On August 9, 2011 Xhibit entered into a Unit Exchange Agreement
whereby the members of SpyFire Interactive, LLC (&ldquo;SpyFire&rdquo;) and Stacked Digital, LLC (&ldquo;Stacked&rdquo;) exchanged
100% of their membership units for 18,292,319 of the Company&rsquo;s units. Concurrent with this transaction, SpyFire and Stacked
became wholly-owned subsidiaries of the Company. There is common ownership and management among all three companies. The Company,
through its subsidiaries, is an online marketing and advertising company providing targeted and measurable online advertising campaigns
and programs for a broad base of advertisers and advertising agency customers. The Company enables marketers to advertise and sell
their products and services through major online marketing channels including display advertising and affiliate marketing networks.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Basis of Presentation </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The condensed consolidated financial statements of Xhibit, LLC
for the quarter ended March 31, 2012 and the consolidated balance sheet of Xhibit, LLC at December 31, 2011 have been prepared
on an accrual basis of accounting. This basis of accounting recognizes revenues when earned and expenses when incurred and conforms
with U.S. generally accepted accounting principles (GAAP). The condensed consolidated financial statements of Xhibit include the
accounts of the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated
in consolidation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The condensed combined statements of operations and statements
of cash flows of SpyFire Interactive, LLC and Stacked Digital, LLC for quarter ended March 31, 2011 have been prepared on an accrual
basis of accounting. This basis of accounting recognizes revenues when earned and expenses when incurred and conforms with U.S.
generally accepted accounting principles (GAAP). All significant balances and transactions between SpyFire and Stacked have been
eliminated. The condensed combined statements of operations and statements of cash flow of SpyFire and Stacked have been presented
for comparative purposes only and are not necessarily indicative of the consolidated financial position had the acquisition been
effective as of January 1, 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 2 &ndash; PROPERTY AND EQUIPMENT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Property and equipment consist of the following at March 31,
2012 and December 31, 2011:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">March 31, 2012</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">December 31, 2011</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 64%; text-align: left">Computers and office equipment</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 15%; text-align: right">46,125</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 15%; text-align: right">30,501</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Software</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,854</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Office furniture</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">44,951</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">9,327</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Property and equipment, gross</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">92,930</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">39,828</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Less: accumulated depreciation</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(14,330</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(8,792</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: 22pt">Total property and equipment, net</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">78,600</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">31,036</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 3 &ndash; NOTES PAYABLE</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">On August 9, 2011 the Company issued a promissory note in the
amount of $333,516 to one of its members. The note carries a simple interest rate of 5% per annum and was due and payable on September
30, 2011. The maturity date on the balance due at December 31, 2011 ($225,665) was extended to June 30, 2012. On April 10, 2012,
the Note along with all accrued interest was paid in full.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">On March 27, 2012 the Company issued a Promissory Note in the
amount of $500,000 to one of its members. The Promissory Note bears interest at a simple rate of 10% and is due and payable on
September 30, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 4 - MEMBERSHIP INTERESTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As of March 31, 2012, the Company had 21,905,011 membership
units issued and outstanding held by ten individuals.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 5 &ndash; SUBSEQUENT EVENTS </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">On April 12, 2012 the Company entered into a definitive merger
agreement with NB Manufacturing, Inc. (&ldquo;NBM&rdquo;), a publically traded shell company currently traded on the OTCBB under
the symbol NBMF. Under the terms of the Merger Agreement, NB and Xhibit propose to engage in a reverse triangular merger resulting
in Xhibit becoming a wholly-owned subsidiary of NBM and the members of Xhibit becoming the majority owners of NBM, holding approximately
83% of the total outstanding shares. Completion of the merger is contingent upon both parties satisfying certain conditions in
order for the Agreement to become effective.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company is negotiating a merger agreement with Social Bounce,
LLC, an internet social media company owned by the Company&rsquo;s majority shareholder, whereby the Company will issue 21,905,011
of its units to acquire a 100% interest in Social Bounce. The merger is expected to close in May 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>XHIBIT LLC</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>PRO FORMA CONDENSED COMBINED FINANCIAL
STATEMENTS (UNAUDITED)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following unaudited pro forma condensed
combined balance sheet assumes the Merger of NB Manufacturing, Inc. (&ldquo;NBM&rdquo;), a Nevada corporation, and Xhibit, LLC
(&ldquo;Xhibit&rdquo;), a Nevada limited liability corporation, and the related transactions described in the notes hereto had
occurred on March 31, 2012. The unaudited pro forma condensed combined balance sheet as of March 31, 2012 is based on the unaudited
historical balance sheet of NBM and the unaudited consolidated balance sheet of Xhibit as of March 31, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following unaudited pro forma condensed
combined statement of operations for the year ended December 31, 2011 assumes the merger between NMB and Xhibit had occurred on
January 1, 2011. The statement is based on the audited statements of operations of NBM and Xhibit for the year ended December 31,
2011. The unaudited profroma condensed combined statement of operations for the quarter ended March 31, 2012 assumes the merger
had occurred on January 1, 2011. The statement is based on the unaudited statements of operations of NMB and Xhibit for the quarter
ended March 31, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Merger will be accounted for as a reverse
merger in which Xhibit is the accounting acquirer, a capital transaction in substance. The parties believe that Xhibit is the accounting
acquirer for accounting purposes for the following reasons: (i) current Xhibit officers will control the management of the combined
companies, (ii) designees of Xhibit will control the Board of Directors and (iii) current Xhibit shareholders will be the largest
group of shareholders of the combined company following the merger and are likely to vote together, although there is no formal
agreement among them. The accounting treatment utilizes the structure of the combined company and the combined company&rsquo;s
assets and liabilities will be recorded at their historical cost. The legal status of NBM as the surviving corporation will not
change as a result of the accounting treatment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The unaudited pro forma condensed combined
financial statements include all material adjustments believed to be necessary to reflect the recapitalization with Xhibit and
its wholly owned subsidiaries.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The pro forma condensed combined financial
statements should be read in conjunction with the separate financial statements and related notes thereto of NBM and Xhibit. These
pro forma financial statements are not necessarily indicative of the combined financial position, had the acquisition occurred
at the end of the periods indicated above, or the combined results of operations which might have existed for the periods indicated
or the results of operations as they may be in the future.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

<P STYLE="margin: 0"></P>

<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>XHIBIT, LLC &amp; NB MANUFACTURING, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>UNAUDITED CONDENSED COMBINED PROFORMA
BALANCE SHEET</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>For the Three Months Ended March 31,
2012</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">NB</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"></TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"></TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">Manufacturing,</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">Proforma</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">Combined</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Xhibt</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Inc.</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Adjustments</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Proforma</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 48%; font-weight: bold">Assets</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right"></TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right"></TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right"></TD><TD NOWRAP STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Current Assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 9pt">Cash</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">569,563</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"></TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">569,563</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Accounts receivable, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">644,563</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">644,563</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Prepaid expense</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">128,742</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">128,742</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9pt">Accounts receivable, related party</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">8,150</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">8,150</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Total current assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,351,018</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,351,018</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Other Assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Security deposit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">32,731</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">32,731</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9pt">Property and equipment, net</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">78,600</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">78,600</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt; padding-left: 0.25in">Total Assets</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">1,462,349</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">-</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">-</TD><TD NOWRAP STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">1,462,349</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">Liabilities and Members'/Shareholders' Equity</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Current Liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Accounts payable and accrued expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">426,051</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">5,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">431,051</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9pt">Notes payable, related party</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">725,665</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">725,665</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Total current liabilites</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,151,716</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,156,716</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Other liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">31,897</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">31,897</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>Members'/Shareholdrers' Equity</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Common stock</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,120</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,538</TD><TD NOWRAP STYLE="text-align: left"><B>(1)</B></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,658</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Additional paid in capital</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">198,101</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">665,241</TD><TD NOWRAP STYLE="text-align: left"><B>(2)</B></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">863,342</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Retained earnings (deficit)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(204,221</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">204,221</TD><TD NOWRAP STYLE="text-align: left"><B>(2)</B></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Members' capital</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">875,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(875,000</TD><TD NOWRAP STYLE="text-align: left">)<B>(2)</B></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9pt">Retained earnings (deficit)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(596,264</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(596,264</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Total members'/shareholders' equity (deficit)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">278,736</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(5,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">273,736</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt; padding-left: 0.25in">Total Liabilities and Members'/Shareholders' Equity</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">1,462,349</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">-</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">1,462,349</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>XHIBIT, LLC &amp; NB MANUFACTURING, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>UNAUDITED CONDENSED COMBINED PROFORMA
STATEMENT OF OPERATIONS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Year Ended December 31, 2011</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">NB</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">Manufacturing,</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">Pro Forma</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">Combined</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Xhibt, LLC</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Inc.</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Adjustments</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Pro Forma</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 48%">Revenues</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">6,351,384</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right"></TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">6,351,384</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt">Cost of revenues</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">3,760,553</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">3,760,553</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Gross profit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,590,831</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,590,831</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Operating expenses:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 11pt">Sales and marketing</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">388,589</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">388,589</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: 11pt">General and administrative</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,481,846</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">27,152</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,508,998</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: 11pt">Research and development</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">49,820</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">49,820</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Total operating expenses</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">2,920,255</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">27,152</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">2,947,407</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Loss from operations</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(329,424</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(27,152</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(356,576</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: 11pt">Interest expense, related party</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">6,579</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,716</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"></TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">8,295</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt">Net Loss</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">(336,003</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">)</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">(28,868</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">)</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right"></TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">(364,871</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">)</TD></TR>
</TABLE>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

<P STYLE="margin: 0"></P>

<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>XHIBIT, LLC &amp; NB MANUFACTURING, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>UNAUDITED CONDENSED COMBINED PROFORMA
STATEMENT OF OPERATIONS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>For the Three Months Ended March 31,
2012</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">NB</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">Manufacturing,</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">Proforma</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">Combined</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Xhibt, LLC</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Inc.</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Adjustments</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Proforma</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 48%">Revenues</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">2,162,334</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right"></TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">2,162,334</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt">Cost of revenues</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,427,340</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: left"></TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,427,340</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Gross profit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">734,994</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"></TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">734,994</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"></TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Operating expenses:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"></TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Sales and marketing</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">165,983</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"></TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">165,983</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">General and administrative</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">670,662</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">10,130</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"></TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">680,792</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9pt">Research and development</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">87,326</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: left"></TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">87,326</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Total operating expenses</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">923,971</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">10,130</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: left"></TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">934,101</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Income from operations</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(188,977</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(10,130</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"></TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(199,107</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9pt">Interest expense</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">4,561</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: left"></TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">4,561</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"></TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt">Net Income</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">(193,538</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">)</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">(10,130</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">)</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right"></TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">(203,668</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">)</TD></TR>
</TABLE>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>PROFORMA ADJUSTMENTS TO THE UNAUDITED CONDENSED COMBINED
FINANCIAL STATEMENTS </B></P>

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<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(1)</TD><TD STYLE="text-align: justify">To reflect the recapitalization of Xhibit through the issuance of 55,383,452 shares at par ($5,538)
of NBM in connection with the Merger.</TD></TR></TABLE>

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<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(2)</TD><TD STYLE="text-align: justify">To reflect the net adjustment to additional paid in capital for the elimination of the Members&rsquo;
Capital of Xhibit and Retained Earnings of NBM in connection with the recapitalization.</TD></TR></TABLE>

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United
States Securities And Exchange Commission
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: June 7, 2012
(Date of earliest event reported: June 4,
        2012)
NB MANUFACTURING,
        INC.
(Exact name of registrant as specified in
        its charter)
Nevada
(State or other jurisdiction
of incorporation)
000-52678
(Commission
File Number)
20-0853320
(IRS Employer
Identification No.)
80 E. Rio Salado Parkway, Suite 115,
Tempe, AZ 85281
(Address of principal
executive offices) (Zip Code)
(602) 281-3554
(Registrant's telephone number)
3410 W. Glendale, Suite D, Phoenix,
AZ 85051
(Former Address)
ITEM 2.01 Completion of Acquisition
or Disposition of Assets
On June 4, 2012, the
merger (the "Merger") contemplated by the Merger Agreement dated as of April 25, 2012 by and among NB Manufacturing,
Inc., a Nevada corporation ("NB" or the "Registrant"), NB Manufacturing Subsidiary, LLC, a Nevada limited liability
company (the "Merger Sub"), Xhibit, LLC, a Nevada limited liability company ("Xhibit") and a certain director
and officer of NB (the "Merger Agreement"), as amended as of May 23, 2012, was completed as of the filing of Articles
of Merger with the Secretary of State of the State of Nevada, merging the Merger Sub into Xhibit.
As a result of the
Merger and pursuant to the Merger Agreement, Xhibit has become a wholly-owned subsidiary of the Registrant, and the Registrant
is issuing shares of its common stock to holders of Units of Xhibit at a rate of 1.2641737582 shares of the Registrant's common
stock for each Xhibit Unit.
Immediately prior to the Merger and following its recent 8:1 forward stock split (which was
completed effective March 1, 2012), the Registrant had approximately 11,200,224 shares of common stock outstanding.
Following the Merger,
the Registrant has 66,583,676 shares of common stock outstanding and no derivative securities outstanding. Following the Merger,
the former members of Xhibit own 83.2% of the Registrant's outstanding securities, and the Registrant's shareholders own 16.8%
of the Registrant's outstanding securities.
Among the conditions
to the closing of the Merger, the registrant has agreed to prepare and file a Form S-1 registration statement to register the resale
of all of its restricted shares, including those issued as part of the Merger, within one year of the closing of the Merger.
The foregoing description
of the Merger Agreement and related transactions does not purport to be complete and is qualified in its entirety by reference
to the full text of the Merger Agreement, a copy of which was filed as Exhibit 2.1 to
the
Company
's Current Report on Form 8-K filed by
the Company
with the SEC on April 18, 2012, and to the amendment filed as Exhibit 2.2 to this Current Report on Form 8-K, and is incorporated
into this Item 2.01 in its entirety by reference.
Business
of the Registrant and Its Subsidiary
Cautionary Statement Regarding Forward-Looking
Information
All statements contained
in this Form 8-K and the documents annexed to or incorporated by reference into this Form 8-K, other than statements of historical
facts, that address future activities, events or developments are forward-looking statements, including, but not limited to, statements
containing the words "believe," "expect," "anticipate," "intends," "estimate,"
"forecast," "project," and similar expressions. All statements other than statements of historical fact are
statements that could be deemed forward-looking statements, including any statements of the plans, strategies and objectives of
management for future operations; any statements concerning proposed new products, services, developments or industry rankings;
any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions
underlying any of the foregoing.
These statements are
based on certain assumptions and analyses made by NB and Xhibit in light of their experience and their assessment of historical
trends, current conditions and expected future developments as well as other factors they believe are appropriate under the circumstances.
However, whether actual results will conform to the expectations and predictions of management is subject to a number of risks
and uncertainties described under "
Risk Factors
" below and in the "
Risk
Factors
" sections of the Company's Form 10-K and Form 10-Q filings with the SEC that may cause actual results to differ
materially.
The principal risks
and uncertainties include the fact that Xhibit has limited operating history and that NB may need to raise capital to expand its
scope of operations and other risks that are described in the section entitled "
Risk
Factors
" below.
Consequently, all of
the forward-looking statements made in this Form 8-K and the documents annexed to or incorporated by reference into this Form 8-K
are qualified by these cautionary statements and there can be no assurance that the actual results anticipated by management will
be realized or, even if substantially realized, that they will have the expected consequences to or effects on our business operations.
Readers are cautioned not to place undue reliance on such forward-looking statements as they speak only of NB or Xhibit's views
as of the date the statement was made. NB and Xhibit undertake no obligation to publicly update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.
Explanatory Note
Unless otherwise indicated
or the context otherwise requires, all references below in this report on Form 8-K to "we," "us" and the "Company"
are to NB Manufacturing, Inc., a Nevada corporation, and its subsidiary, Xhibit LLC, a Nevada limited liability company. References
to the "Registrant" or "NB" are to solely NB Manufacturing, Inc., a Nevada corporation. References to "Xhibit"
are to Xhibit LLC, a Nevada limited liability company, and its subsidiaries. All references to tradenames and domain names contained
herein are the property of their respective owners.
Available Information
The Company electronically
files its annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to these
reports and other information with the Securities and Exchange Commission ("SEC"). These reports can be obtained by accessing
the SEC's website at www.sec.gov. The public can also obtain copies by visiting the SEC's Public Reference Room at 100 F Street
NE, Washington, DC 20549 or by calling the SEC at 1-800-SEC-0330. In addition, the Company makes copies of its annual and quarterly
reports available to the public at its website at www.xhibitcorp.com. Information on this website is not a part of this Report.
Business of NB Manufacturing
NB Manufacturing, Inc.
was incorporated on September 19, 2001 in the State of Nevada pursuant to a U.S. Bankruptcy Court Chapter 11 Reorganization Plan
for New Bridge Products, Inc., confirmed on June 17, 2002 (CASE NO. 00-13546-ECF-RIN). It has been a shell corporation since inception.
Immediately prior to the completion of the Merger, the Registrant did not conduct any business operations and had minimal assets
and liabilities.
Business of Xhibit LLC
Xhibit LLC (the "Company"
or "Xhibit") was formed on July 18, 2011 for the purpose of acquiring and consolidating the operations of Stacked Digital,
LLC ("Stacked"), Hrizzo, LLC ("Hrizzo"), and SpyFire Interactive, LLC ("SpyFire"). While Hrizzo was
acquired by the Company, it was subsequently returned to its founder as management determined that the services offered by Hrizzo
were better kept separate from the Company. SpyFire was founded on October 27, 2005 and wholly owned by Chris Richarde while Stacked
was founded on April 11, 2010 and owned fifty percent by Chris Richarde and fifty percent by Jason Hrissikopoulos. SpyFire and
Stacked primarily serve the digital advertising ad agency and internet publisher business. Most of their revenue was historically
generated through developing online advertising and advertising campaigns in the education markets. On August
12, 2011, the Company merged SpyFire and Stacked into Xhibit, a company managed by Xhibit Management Corp., which is ultimately
controlled by Mr. Richarde.
On May 24, 2012, Xhibit
acquired Social Bounce, LLC ("Bounce"), a social media and online game development company founded on August 2, 2011
and majority owned by Mr. Richarde, as its third operating subsidiary. Bounce was acquired to obtain domain names and social media/online
gaming properties to consolidate with the operations of the other subsidiaries of Xhibit.
2
While SpyFire, Stacked
and Bounce are all operating subsidiaries of Xhibit, the discussion contained herein will refer to Xhibit and its brand names known
in the industry as XI United and Lead Revolution. Shortly, management plans to reorganize and consolidate the Company to better
reflect its operating brands and when this consolidation is completed will no longer separate the Company into these three separate
subsidiaries which now have overlapping business purposes.
Overview
Regardless of the medium
used, a successful advertisement requires both placement in a widely viewed "location" (e.g. a Superbowl ad) and with
an attractive "pitch" so viewers remember the product (e.g. the Energizer Bunny for batteries or the GEICO lizard for
insurance). With online marketing and advertising most internet companies seek to convince their customers that they the best "location"
to reach their intended audiences. For example, Facebook touts its extensive number of users and encourages advertisers to access
its platform to reach this audience. Its strategy is to provide an attractive location for online advertising but it generally
does not get involved in assisting with the customization or targeting of the advertising message itself.
Today, there are a
wide array of companies devoted to designing and improving websites to attract online customers; preparing advertising slogans
and developing "buzz words" to attract the online surfer to those websites designed to sell products or services; providing
consulting to get a customer's name higher on the list provided by Google of similar product or service providers; developing
internet marketing campaigns which may include cutting edge graphics and video; offering brief single paragraph postings of products
or services.
The numerous companies
focused on assisting with the message content of the advertising as opposed to the location of that message or content generally
focus on their particular market niche instead of providing an integrated strategy combining quality website development with a
well targeted cutting edge ad campaign. These disparate market solutions force the consumer to "quarterback" the numerous
online marketing service providers; making it more difficult to develop a cohesive unified approach to online advertising.
Xhibit is well positioned
for the market shift from offline advertising to digital advertising and the benefits of streamlined cloud based solutions. (Xhibit
uses the term "cloud based" to refer to web and app based access to server side software delivered over a network of
servers and platforms, where users are not required to install Xhibit's software on their computer, phone, tablet or laptop
to access the software). It has positioned a talented group of employees which it believes are capable of releasing a broad spectrum
of tools and media to capitalize on this opportunity in ways management believes no other company has done.
Xhibit is a cloud based
technology development company with its primary historical focus on digital advertising, and a recently expanded focus on online
and mobile social media, games and CRM (customer relationship management) solutions. Xhibit's XI United and Lead Revolution brands
provide the synergies required for a full service ad agency and web and technology development company with digital advertising
and marketing across various channels of search engine, social media, display, email, and mobile markets. Both through their advertising
efforts and Lead Revolution's publisher network, this operation generates tens of millions of impressions (where someone views
an ad), over one million unique clicks (where someone clicks on an ad), over fifty thousand leads (where someone provides contact
information in response to an ad) and thirty five hundred sales per month, creating significant value for top tier advertisers.
With over thirteen years of digital media experience provided by its founders, Xhibit's divisions understand the needs of their
advertisers and provide cutting edge, integrated solutions as a full service ad agency. From branding products and campaigns start
to finish, app development, and website engineering, to generating impressions, clicks, or actual leads and sales for their customers,
XI United and Lead Revolution provide a single source for all their advertisers' needs. These internal advertiser and ad agency
relationships offer potential monetization capabilities for Xhibit's social media and games currently under development. Xhibit
does not need to outsource ad agency solutions for its internal proprietary intellectual property as Lead Revolution and XI United
already have proven advertising and marketing experience and relationships with top tier advertisers, such as Capitol Records,
The Beach Boys, American Laser Center, and esurance, and indirectly through other ad networks and agencies have carried out promotional
advertising for many other leading brands. Management believes the combination of an ad agency, advertising solutions, and a technology
development company creates a synergistic and unique platform to launch Xhibit's own intellectual property under development.
3
XI United's and
Lead Revolution's customers are primarily businesses, brand advertisers and the advertising agencies that service these groups.
Lead Revolution and XI United also conduct performance-based advertising campaigns and programs where advertisers pay only for
advertising that generates a customer lead or product sale. They target campaigns to reach the online consumers most likely to
make purchases or request further information. The emphasis is on trending consumer products or services to maximize margins and
rate of success.
Lead Revolution generates
the audiences for its advertisers' campaigns through its internal member base, as well as through search engine, social media,
display, email, and mobile markets, its network of publishers (this term refers to individuals, businesses or large corporations that serve ads to an audience through
a variety of means - a publisher can serve ads through a website the publisher owns or a website it purchases ad space from, or
a publisher can be an individual who purchases ads from a company that owns a mobile app, or a company that has a newsletter it
sends out to clients and chooses to display or promote advertisements in it),
other online ad agencies and other forms of media. Lead Revolution licenses proprietary media platforms for online advertising
inventory aggregation, campaign targeting and optimization, delivery, measurement and reporting, and analytics. Xhibit is concurrently
developing a proprietary tracking platform to replace Lead Revolution's licensed software. Having Xhibit's team of technology developers
and XI United's experience gives Lead Revolution crucial access to additional resources and advantages over stand alone ad agencies.
XI United and Lead
Revolution provide access to participate in large-scale advertiser and advertising agency campaigns that many publishers may not
have access to on their own, enhanced advertising results through campaign optimization, branding, licensed targeting and detailed
analytics. XI United often utilizes its ad agency and web development expertise to fine tune or enhance ad campaigns to optimize
results and generate the maximum return on advertisers' investment. Although network publishers compete for online consumers, XI
United and Lead Revolution plan to help many online publishers, not owned by the Company, to monetize their respective online audiences
or advertising inventories with additional tools and ad placement technology currently under development.
Industry
Marketing has evolved
significantly in recent years, driven by changes in media consumption, real-time engagement through social media and pervasive
mobile connectivity through tablets and smart phones. For marketers today, delivering relevant, meaningful and timely communications
is more challenging than ever, as consumers are interacting with brands offline and online through interactive channels such as
email, mobile, Twitter, Facebook and websites. This new era of the hyper-connected and empowered consumer requires organizations
to develop a cross-channel view of their customers to drive real-time, relevant engagement and positive return on marketing investment.
4
Market Opportunity
for Interactive Marketing
Consumers are increasingly
using email, mobile, social media and websites to access information and interact with brands. Media consumption is shifting from
offline channels to interactive channels, as evidenced by Forrester's finding that in 2010, 33% of weekly media consumption among
U.S. adults occurred through the Internet (Source: Forrester,
U.S. Interactive Marketing Forecast
, 2011 to 2016, August
24, 2011, as updated September 7, 2011). This is driving marketers to increase the percentage of advertising spending on interactive
marketing. According to Forrester's
U.S. Interactive Marketing Forecast, 2011 To 2016
, U.S. marketers plan to increase spending
on interactive channels (defined as display, search, email, mobile and social media) as a percentage of total advertising spending
from 16% in 2011 to 26% in 2016, creating a projected $77 billion market in the United States by 2016, of which email, mobile and
social media marketing is expected to grow from approximately $4.8 billion in 2011 to nearly $15.7 billion by 2016, representing
a compound annual growth rate of 27%. In addition to this large U.S. market opportunity, management believes the addressable market
outside the United States presents an even greater opportunity based on comparisons of population, Internet usage, mobile adoption
and e-commerce spending. Key opportunities by channel include:
·
Email.
Email remains the primary channel for interactive marketers given its compelling
return on investment and ubiquity of use. According to a 2011 Direct Marketing Association report, email marketing returned an
estimated $40.56 for every dollar spent on it in 2011, the highest return on investment among all marketing channels (Source: Direct
Marketing Association,
The Power of Direct Marketing
, 2011-2012 Edition, October 2011). Forrester projects the overall market
for U.S. email marketing will grow from $1.5 billion in 2011 to $2.5 billion in 2016, representing a compound annual growth rate
of 10% (Source: Forrester,
U.S. Interactive Marketing Forecast
, 2011 to 2016, August 24, 2011, as updated September 7, 2011).
Xhibit understands this opportunity and this is why management believes FlyReply is a key component in capturing a portion
of this market.
·
Mobile.
Mobile marketing provides compelling benefits, such as location-based data
as well as a channel for real-time engagement with customers. Given the mobile channel's ability to generate immediate response,
it can be an effective way to acquire new customers and obtain permission for communication through other marketing channels. According
to Forrester, U.S. mobile marketing spending is expected to grow from $1.7 billion in 2011 to $8.2 billion in 2016, representing
a compound annual growth rate of 38% (Source: Forrester,
U.S. Interactive Marketing Forecast
, 2011 to 2016, August 24, 2011,
as updated September 7, 2011).
·
Social.
The rapid emergence of social media has fundamentally changed the way consumers
interact with each other and with brands. Facebook has announced it has over 800 million active users, and Twitter has announced
it has over 175 million members. These leading social media networks enable marketers to interact and engage in real time with
consumers. According to Forrester, U.S. social media marketing spending is expected to grow from $1.6 billion in 2011 to $5.0 billion
in 2016, representing a compound annual growth rate of 26% (Source: Forrester,
U.S. Interactive Marketing Forecast
, 2011
to 2016, August 24, 2011, as updated September 7, 2011).
According to a Nielson repost in August 2010, the time spent
playing online games in the United States surpassed the time spent on email.
·
Sites.
Email, mobile and social media drive website traffic, which is a critical
component of interactive marketing campaigns as it not only enables marketers to obtain permission for further communications,
but also provides the means by which conversion occurs to generate sales. Websites provide marketers with tools such as web forms
to collect customer information and online conversion tracking to create customer data-driven targeting rules to personalize landing
pages and microsites.
·
Emergence of the App Economy.
In order to provide users with a wider range of
engaging experiences, social networks and mobile operating systems have opened their platforms to developers, transforming the
creation, distribution and consumption of digital content. We refer to this as the "App Economy." In the App Economy,
developers can create applications accessing unique features of the platforms, distribute applications digitally to a broad audience
and regularly update existing applications. Social networking sites and mobile application stores have become mass market
consumer destinations where content is easy to find, immediately accessible and always available. Growth in the number and
quality of applications has driven further increases in social network and mobile usage.
5
o
Social graph and viral distribution.
At the core of social networks is the social graph,
a digital mapping of a social network user's real-world connections that can be used to promote social interaction and sharing
among the users. By leveraging the social graph, high quality social applications that deliver compelling value for social network
users and have mass appeal can achieve significant levels of adoption rapidly via viral growth.
o
Proliferation of mobile
. There is significant demand for applications on mobile platforms
such as Apple iOS and Google Android. As smart phones, tablets and other increasingly powerful connected devices have proliferated
worldwide, application developers have leveraged the much greater distribution opportunity and emerging social connectivity of
mobile devices. Games are the most popular category of applications on smartphones, representing approximately half of the time
spent on smartphone applications in the United States, according to a May 2011 report by Flurry Analytics, a market data and analytics
firm.
·
Rapid Growth of Free-to-Play Games.
Most social games are free to play and generate
revenue through the in-game sale of virtual goods. According to In-Stat, a market intelligence firm, the worldwide market for the
sale of virtual goods was $7.3 billion in 2010 and is expected to more than double by 2014. Compared to pay-to-play business models,
the free-to-play approach tends to attract a wider audience of players, thereby increasing the number of players who have the potential
to become paying users. By attracting a larger audience, the free-to-play model also enables a higher degree of in-game social
interaction, which enhances the game experience for all players.
Market
Challenges
Most organizations
understand that effective email marketing and cross-channel, interactive marketing can drive customer engagement, increase sales
and improve return on marketing investment. However, organizations often lack the technology, infrastructure and expertise needed
to plan, automate, deliver and optimize data-driven interactive marketing campaigns and real-time communications across interactive
channels. Marketers considering the adoption or expansion of email and cross-channel, interactive marketing programs face many
challenges, including the following:
·
Difficulty in Integrating Data to Create a Single, Unified View of Each Consumer.
With the proliferation of consumer data generated by social media, web analytics and e-commerce, it is difficult for organizations
to integrate these disparate data sources to create a single, unified view that reflects a collective knowledge of each consumer,
including previous interactions and preferences, in order to effectively target and deliver personalized and relevant communications.
·
Complexity in Effectively Engaging Consumers Across Multiple Channels.
Engaging consumers
has become increasingly difficult in today's media-saturated environment, requiring marketers to provide increasingly personalized
and relevant communications. Organizations require data management and interaction technologies that enable them to leverage cross-channel
insights to drive relevant communications. Non-relevant content and poorly timed communications may result in interactions that
fail to produce positive return on investment, tarnish brand image or alienate consumers.
6
·
Inability of Disparate Point Solutions to Address Marketers' Emerging Needs.
Many
solutions are designed to only address specific marketing channels or use cases. These siloed point solutions create significant
cost inefficiencies and limitations in integrating data in a timely manner among solutions and interactive marketing channels.
These solutions often lack the flexibility, cross-channel functionality and scalability to meet marketers' evolving needs as their
programs grow in scale and sophistication. This problem is exacerbated as organizations increase the number of channels they use
to communicate and interact with consumers.
·
Complex Security and Infrastructure Requirements.
Given the critical nature of interactive
communications such as fraud alerts, e-statements and time-sensitive offers, organizations require 24/7 application availability,
high-volume transaction processing, sophisticated security controls and a significant amount of data storage. To meet these requirements
internally, organizations must make significant investments in technical expertise, complex infrastructure, advanced security measures
and data storage.
·
Changing Deliverability and Regulatory Standards.
To ensure marketing communications
reach their intended recipients, marketers must understand and adhere to the complex and constantly-evolving permission and delivery
standards of leading ISPs and telecommunication providers. In addition, organizations must maintain compliance with state, federal
and international laws governing the delivery of mobile and email messages, including the U.S. CAN-SPAM Act and foreign governments'
privacy and permission laws and regulations.
Business Strategy
Xhibit is seeking to
become the first technology and development company to effectively monetize social media, online and mobile games, and cloud based
CRM solutions in a seamless package which more effectively combines advertising with these modern mediums of communication. The
Company believes that it can achieve this by providing a more captivating user experience with less intrusive ads than the competition
and more effectively monetizing all aspects of the digital delivery process. Management believes that other social networks currently
lose a significant amount of revenue from brokered advertising that is purchased by other ad agencies simply because many social
networks lack the ad agency experience and have chosen not to develop this business model. Many social networks provide limited
support to even their high-end clients.
Management believes
that that through its brands XI United and Lead Revolution it can capture advertising dollars through a combination of cutting
edge technology coupled with the development of successful ad campaigns. Instead of merely providing an agnostic conduit for an
advertisement developed by a client which may not produce its intended results, XI United provides the expertise to design or re-design
a client's advertisements or to develop an advertising campaign which is targeted at and appeals to the intended audience.
Many companies are
concerned about the actual value of social media and mobile advertising. Management believes that combining social media and online
games with result-driven advertising reduces that concern for advertisers and creates an ever-growing opportunity for companies.
Integrating social media with performance-based advertising helps change the paradigm from how much a company wants to spend on
advertising to how much they want to earn with a measurable return on investment.
The Opportunity
Digital ad agencies
will continue to flourish as advertisers endeavor to expand their reach online. Xhibit will continue to grow within the online
advertising space by scaling its operations and rolling out new services to meet growing demand.
7
Xhibit intends to use
its existing advertising network and future social networks as a platform to market social games thereby creating synergies that
do not rely primarily on third-party social network providers such as Facebook. Key elements of this strategy include:
·
Cross Pollinization of Markets
. Xhibit's focus will seek to create synergies between
advertising companies and social media, allowing advertisers to expand market reach, and developing a subscriber base with grass
roots support for both social media and game apps and web based properties that are developed.
·
Win New Clients by Expanding Direct and Indirect Sales
.
Xhibit believes the
market for interactive advertising solutions is large and underserved, and the Company will continue making significant investments
to pursue this global market opportunity. To acquire new clients, Xhibit will continue to expand its distribution channels of advertising
and marketing service providers. Xhibit will continue to employ an opportunistic strategy tailored for each market and industry
as the Company expands.
·
Increase Revenue From Existing Clients.
With clients in many markets and industries,
Xhibit expects to have a significant opportunity to sell additional applications, development, and advertising to existing clients
and expand their use of emerging interactive channels such as mobile and social media.
·
Launch New Social Networks, Apps and Games.
Xhibit
will continue to invest in building new social networks and games to expand the genres of media offered, further engaging with
existing users and attracting new ones.
·
Increase Monetization of Games.
Xhibit
plans to offer increased selection, better merchandising and more payment options to increase the sales of virtual goods. Players
purchase these virtual goods to extend their play sessions, personalize their game environments, accelerate their progress or send
unique gifts to their friends. Xhibit also plans to continue to pursue additional revenue opportunities from advertising, including
branded virtual goods and sponsorships.
·
Increase Monetization of Social Networks and Apps.
Xhibit plans to offer items of interest to its social network members through more targeted ads within the site and through advertisements
in optional newsletters that individuals "opt-in" to. Xhibit also plans to provide multiple payment options for goods
purchased within the social networks. For example, if someone is using MovieSocial to purchase a movie ticket within the website
or app, the member may have the option to use "MovieSocial" points, PayPal, credit cards, or other forms of payment.
·
Selectively Pursue Acquisitions.
Xhibit can expand its business through acquisitions,
primarily in terms of product. The Company will explore acquisition opportunities of companies and technologies to expand the functionality
of product solutions, provide access to new clients or markets or both.
Solutions to the dynamic digital ad agency environment
The online advertising
landscape is highly fragmented. Advertisers, ad networks, e-mail service providers, data tracking companies, search engine marketing
(SEM) firms, media placement agencies, and publishers. Disconnect among participants creates significant inefficiency along the supply chain. This presents an
opportunity for a full-service ad agency to deliver a streamlined, integrated suite of online advertising and promotional services
to a wide range of advertisers and publishers.
Xhibit recognizes that
to effectively address this opportunity, an ad agency must address the specific needs of advertisers, publishers, and consumers.
To that end, Xhibit has developed proprietary technologies that will enable the launch of a scalable, full-service digital ad agency
found in XI United, Lead Revolution, and AdBind.com.
8
Advertisers are seeking
digital ad agencies that can efficiently connect them to large, responsive audiences. Management believes that Lead Revolution
will fulfill this need by leveraging a vast network of advertising capabilities and publishers to connect advertisers to millions
of strategically targeted prospects. Management believes that the Company's advertising and publishing experience, relationships,
technologies, and strategies will ensure that Lead Revolution's, XI United's and AdBind's campaign click-through and conversion
ratios are among the highest in the industry. Lead Revolution's and AdBind's cost-per-action campaigns allow the Company to provide
advertising based on a specific action or result, virtually eliminating the advertisers' risk, as advertisers only pay when results
they specify are achieved.
·
Reach –
XI
United's and Lead Revolution's advertising and advertising network of publisher partners currently generates tens of millions
of ad impressions, over one million unique clicks, over fifty thousand leads and thirty five hundred sales per month, impacting
consumers when they are most responsive.
·
Target –
Xhibit's customer profile database
coupled with Xhibit's proprietary data enhancement technology will enable the Company to target audiences using psychographic,
demographic, location, and behavioral data.
·
Optimize –
XI United's leading edge optimization
expertise will allow the Company to deliver optimal performance within any advertiser's budget. Xhibit's team will develop optimization
solutions that result in higher performance campaigns for its advertiser clients.
·
Customer Service –
With nearly 100 years
of combined online marketing experience and access to best in breed tracking and reporting tools, Xhibit's expert staff will provide
unmatched customer service and value to advertisers.
Publishers are demanding
lucrative opportunities to serve quality ads. Furthermore, publishers are demanding fair compensation for their efforts. Lead Revolution
will fulfill this need by offering publishers high-quality, fully optimized ad campaigns coupled with competitive payout packages.
Lead Revolution's and AdBind's proprietary tracking technologies under development will allow the Company to deploy, monitor,
and optimize each campaign internally before offering the campaign to publishers, greatly reducing publishers' optimization costs.
In addition, Lead Revolution's and AdBind's in-house tracking platform under development will provide publishers with transparent
and accurate performance data, ensuring fair publisher compensation.
·
Revenue –
Lead Revolution's and
AdBind's
advanced technologies, including a robust internal tracking platform under
development, will streamline
Lead Revolution's
business model, eliminating costly
third-party firms and translating to higher payouts for publishers.
·
Control and Transparency –
Lead
Revolution's
tracking technologies under development, integrated with an intuitive user interface,
will provide publishers with the tools they need to monitor campaign performance as well as payouts.
·
Quality Ads –
Lead Revolution,
AdBind and XI United
will work with reputable advertisers that offer quality products and
services in relevant markets, giving publishers access to ads for these quality products and services more likely to appeal to
consumers. Unlike most digital ad agencies, the Company is able to test campaigns prior to deployment.
Consumers are demanding
convenience. Xhibit's brands fulfill this need by delivering conveniently targeted ads. The Company painstakingly assesses every
aspect of an ad campaign, ensuring that the consumer receives a relevant ad at a convenient time and location. To increase advertising
reach, Lead Revolution has developed an internal member base from its own websites. This member base is continually updated, monitored,
and refined. Subscribers with low activity levels are quickly removed from the database. As a result, Lead Revolution's subscribers
are interested and responsive.
9
Xhibit's
Overall Business Model
Xhibit's business model
is to create multiple solutions for advertisers to connect to their consumers through various pathways by (a) cost effectively
building quality member and customer bases through Xhibit's captivating websites, social networks, games and apps, and giving
businesses the ability to target and reach a higher quality and more receptive customer; and (b) providing companies a better and
more robust ability to connect with their existing customer base through innovative cloud based solutions, such as FlyReply.com.
XI United, Lead Revolution, and AdBind.com. Xhibit will connect businesses with the ability to serve ads to these multiple member
bases, while at the same time providing scalable and attractive business to business solutions, advertising, ad agency and marketing
capabilities to its business customers. The Company will serve as a one-stop-shop, connecting advertisers to millions of prospective
users and members. Xhibit's business model is more efficient than those of traditional online ad agencies, social networks or game
developers, which rely on numerous outside partners. Xhibit can combine its internal resources to reduce costs and deliver quality
products to market quickly. For example, FlyReply.com 1.0 was developed from the ground up in under six months. Furthermore, Xhibit's
ability to immediately monetize any of its internal social networks, apps and games under development with its ad agency and advertiser
relationships provides the Company with a distinct competitive advantage.
Xhibit plans to obtain
members from its content-rich domains, interactive games, apps, and social network initiatives. The Company believes it has six
primary ways to enhance revenues and profit over time: (a) increase the number of Xhibit-owned interactive games, social networks,
and apps; (b) gain more FlyReply.com customers using its services; (c) increase the amount of ad agency customers and advertisers
it works with under XI United; (d) provide plug and play monetization vehicles, such as ads that can be pulled from a cloud based
environment, and easily integrated into third party mobile apps, games, social networks, high traffic websites, and other potential
clients in the digital space; (e) increase the number of high quality publishers in its ad agency; and (f) increase the value of
campaigns run through the ad agency by leveraging and scaling the amount of long-term relationships with advertisers.
Xhibit derives revenue
from the business divisions described below. These business divisions are presented on a worldwide basis and include ad agency
services, advertising and media, as well as owned and operated businesses, which are described in more detail below. For information
regarding the operating performance of these divisions, see "
Management's Discussion and Analysis of Financial Condition
and Results of Operations - Xhibit
."
Ad Agency
General Services
Xhibit's ad agency
services, described below, are offered through its XI United and Lead Revolution brands. With the combination of a pay-for-performance
model built on licensed technology platforms, marketing expertise, and a large, quality advertising network, the companies provides
advertisers all of the consulting, strategy, and turn-key solutions needed to promote their companies or products in a digital
environment. Combining these resources with its web and technology development capabilities allows Xhibit to deliver a complete
spectrum of services to advertisers.
In addition, Lead Revolution
provides an open environment whereby advertisers can be connected to other online publishers (this term refers to those businesses
which prepare online "newsletters" tailored to specific industries) to further increase their overall advertising exposure
while growing more rapidly. These publishers can quickly view payments and conversion statistics to assess the effectiveness of
every advertiser relationship and advertisement, and advertisers can quickly gauge the quality and potential of each third-party
publisher relationship in the marketplace, allowing them to maximize the performance and scale of their online advertising campaigns.
Lead Revolution has
over one hundred online third-party publishers that advertisers can access in its advertising network. It also partners with third-party
website publishers and applies a licensed technology platform and industry expertise to deliver customers' display ad campaigns
to the appropriate pages of publisher partners' websites.
10
Advertisers can reach
targeted online users on a large scale, using a variety of online display ad units across this entire network of publishers, customized
content channels, or a select number of websites and portals where Lead Revolution is authorized to sell inventory on a single-site
basis. Audiences can be further targeted based on the demographic and behavioral tracking composition of sites within the network
and technical information such as geographic location, browser type, connection speed, ISP or top-level domain (.com, .edu, etc.).
In addition, the unique behavioral targeting capabilities available through Lead Revolution and provided by third-party companies
allow advertisers to retarget users who have recently visited their sites or to display highly relevant ads based on anonymous
profiles based on consumers' recent online behavior such as web browsing and interaction with ads across Lead Revolution's network.
Lead Revolution delivers
a variety of display ad units to the web pages of online display advertising from network publishers and tracks them to evaluate
success against the goals of the advertising programs. With traditional banner ads, interstitials, text links, and other online
ad units, this technology maximizes the impact of marketing campaigns by identifying the most effective placement for each type
of campaign.
XI United also executes
a wide variety of rich media applications, including in-stream and in-banner video ads, providing even greater visual and auditory
impact for an advertisers' online display marketing campaigns.
XI United and Lead
Revolution have launched multiple pricing models designed around maximizing the customers' return on investment. Display advertising
placements are offered on several pricing models including cost-per thousand-impression ("CPM"), whereby customers pay
based on the number of times the target audience is exposed to the advertisement, cost-per-click ("CPC"), whereby payment
is triggered only when an interested individual clicks on a customer's advertisement; and cost-per-action ("CPA"), whereby
payment is triggered only when a specific, pre-defined action is performed by an online consumer. Management believes that Lead
Revolution has been able to generate its highest returns from CPAs.
The benefits that Lead
Revolution's customers enjoy in display and other web advertising include, but are not limited to: flexible pricing models; the
ability to target and reach significant numbers of online consumers in a way that complements media buys on portals and other large
websites; and the ability to improve online advertising performance while the campaigns are still running by optimizing at site,
placement and creative levels, based on both response to ads and the resulting conversions.
Publishers in Lead
Revolution's display advertising network enjoy efficient and effective monetization of their online advertising inventory, including:
participation in large-scale advertiser and advertising agency campaigns they may not be able to access on their own; enhanced
monetization through Lead Revolution's campaign optimization experience; and detailed analytics.
Key Customers
Our industry does not
have clients which enter into long term contracts and substantially all of our customers either have contracts which can be terminated
immediately or are not in writing.
AdCafe
Xhibit's relationship
with AdCafe, LLC, its largest customer accounting for approximately 46% of 2011 revenue, is set forth in three contractual components:
a List Management Agreement, an Exclusivity Agreement and Insertion Orders issued pursuant to Standard Terms and Conditions.
AdCafe has granted
SpyFire (Xhibit's wholly owned subsidiary) the exclusive rights to market certain offers through the SpyFire Network. With certain
exceptions, these relate to sixfigurekit.com. This agreement requires SpyFire to reach
certain monthly minimum leads to maintain its exclusive rights. SpyFire's compensation is calculated based upon the number of leads
it provides. It renews on an automatic annual basis unless terminated by either party within thirty days of a current term. The
current term expires on June 24, 2013.
11
Pursuant to Standard
Terms and Conditions which apply to the current Insertion Order with AdCafe, SpyFire is functioning primarily as a broker to place
the ads through other networks with whom SpyFire is affiliated. Either party may terminate the contract, although all compensation
due to SpyFire through the end of the period must be paid by AdCafe, however the referral commission aspect of the agreement survives
termination. Management believes the current AdCafe Insertion Order will be phased out in the near future, and does not know whether
or not SpyFire will execute a new Insertion Order with AdCafe for other marketing campaigns. Failure to do so would result in a
significant decline in revenue from AdCafe.
Through the List Management
Agreement, SpyFire solicits AdCafe's leads or customers on AdCafe's behalf and sends them various email campaigns and
"sent to" email addresses AdCafe provides. SpyFire's commission is calculated as a net percentage of the net revenue
generated from the management of the lists provided by AdCafe, as well as its own. It renews on an automatic annual basis unless
terminated by either party within thirty days of a current term. The current term expires on August 9, 2012.
Spire Vision
The Company serves
as an advertiser for the ad agency Spire Vision, LLC, its second largest customer in 2011. While there is no written contract for
these services, the parties operate pursuant to specified terms and conditions and related insertion orders.
Other Customers
Xhibit's portfolio
of brands generating top line revenue in the last six quarters is a strong validation of the Company's business model and competitive
advantage. Viet Le, President of XI United, Xhibit's web and ad agency division, has already worked directly for the Beach
Boys, Capitol Records, Ernst Benz, and indirectly for Fortune 500 companies including Pixar, Nintendo, General Motors, Mazda, and
CNN and many others through strategic relationships with other ad agencies.
Web and Technology Development
XI United
XI United is managed
by Viet Le who owned and operated a successful web and technology development business in the Detroit area which he shut down when
he was hired by the Company on January 1, 2012. This division has only comprised a small portion of the total revenue of the Company
but management believes with the combined efforts of Xhibit's CTO Dzenis Softic that it has the ability to grow in parity with
the other divisions and resources the Company offers.
XI United provides
a comprehensive suite of online marketing knowledge and technology development capabilities that help advertisers create and increase
awareness for their products and brands, attract visitors, and generate leads and sales through the Internet. Companies pay XI
United on a per project and hourly rate basis for these development services.
XI United offers a
diverse foundation of custom high-powered digital design and development services with disciplined strategic planning and execution.
Utilizing mixed mediums of creative ideation, consumer interaction and technology, XI United brings expertise and influence to
the next generation of online media. From engaging social and motion driven websites to cross platform 3D game development, XI
United offers comprehensive full service solutions to clients as well as internal technological developments. Upon receiving a
request for proposal, XI United utilizes the user experience studies in project execution detailed below to determine optimal client
predictions on price points. XI United presents three pricing packages with itemized pricing specific to each client. These options
are intended to serve as a psychological upsell strategy in which the project lead will determine ideal margins and place them
within the more enticing package. As XI United bills on an hourly basis, the itemized pricing allows prospective clients to see
the hours of work allocation and better determine the value provided.
12
Smarter Integration
According to a recent
International Data Corp. forecast and analysis, the 2012 Smartphone market share is expected to increase by 33.5% from 2011, with
a 33.5% growing trend of consumers requiring more than mobile access (Source:
http://www.idc.com/
getdoc.jsp? containerId=233553). XI United leverages rich media infused websites, games and mobile applications delivered across
web, mobile and tablet platforms to provide seamless social experiences that result in the ultimate consumer reach. Utilizing web
and app technology together synchronously, it provides a cohesive experience no matter what device consumers are viewing content
on. XI United's core competencies include:
•
Digital branding
•
Content strategy
•
Optimal design for web and mobile technology
•
Rich media design
•
Game development
Delivery Vehicles
:
Websites, Custom Applications and Web Platforms, Video Games, Video Rich Content Media, Strategic Planning
Target Vehicles
:
Web, Mobile Devices and Tablet Devices and utilizing these delivery vehicles for an integrated consumer experience.
Capabilities and
Full Service Solutions (shown in the chart below)
Strategic
Planning
Web
Technology
Branding and
Identity
Rich Media and
Video
User Research
Market Research
Competitive Analysis
Process Analysis
Digital Strategy
Product Planning
Web Analytics
Monetization Strategy
Client Side Dev
(HTML, HTML5, CSS, XHTML, DHTML, AJAX)
Server Side Dev
(PHP, MYSQL, XML, JS)
Mobile Design
(iOS and Android games, websites)
Branding
Identity Systems
Logo Design
Brand Book
Style Guides
CGI / 3D
Motion Graphics
Stylistic Animation
Special Effects
Script Writing
Voiceover and Audio
13
Product Development
Process
In developing products
for clients, XI United uses four distinct stages of development:
Business Development.
The stage prior to project inception with the goal of finding qualified leads and nurturing client relationships.
·
Sales
–
Generates proposals, helps clients
with request for proposals and qualifies leads for project acquisition; and
·
Account Management – Nurtures client interactions and upsells additional work and ideas.
Sends estimates and invoices.
Plan
. The initial
stage of project inception in which the client and XI United team meet to discuss goal setting, expectations, potential risks,
and brainstorming.
·
Project Management – Organizes overall project timelines,
assets and allocates internal and external team resources that are dedicated for the life of the project; analyzes potential risks
and works with account manager to understand client needs;
·
User Experience – In depth studies to analyze client
demographics and determine how to talk to the expected users. Also determines the most optimal workflow to predict user behaviors
by creating site maps and information architecture through wireframes or rapid prototypes; and
·
Branding and Content Strategy – Utilizes user experience studies to determine valuable content
and deliver the best message or products. Writes copy and sets tonal direction.
Design
. The
first stage in which visual design is implemented. Utilizing the strategies outlined above, XI United generates visuals that optimize
each project.
·
Creative Direction – Sets overall visual concept and oversees progress and development to
ensure optimal goals;
·
Production Design – Graphic design that creates overall project look and feel; and
·
Rich Media Design – Creates highly interactive content such as: motion graphics, video production,
animation, and 3D computer graphics.
Develop
. The
final stage in which the products are developed.
·
Client Side Development – Creates all front-end development utilizing HTML5, HTML, CSS, XHTML,
DHTML, and AJAX;
·
Server Side Development – Creates all back-end development with complex database and server
administration utilizing PHP, MYSQL, JS and XML; and
·
Rich Media Development – Develops the highly interactive concepts designed in the previous
phase utilizing 3D, motion and Flash.
14
Marketing and Maintenance
.
Once completed the Company can generate fees through maintenance.
·
Pay Per Click – Online ad management and pay per click media placements; and
·
Maintenance – Monthly retainers that provide project updates and other various client requests.
Employee Atmosphere
XI United offers its
employees a creative work environment that encourages them to take pride and ownership in their work, while learning valuable industry
knowledge. Each employee undergoes detailed training to learn multiple roles from XI United agency veterans, and also learns a
uniform style of working together on design and development projects. XI United pushes employees to encourage each other and has
implemented a peer review system that allows each member to be accountable to each other.
Sample Projects
Include
Of the clients referenced
above, XI United has worked directly with The Beach Boys, Capitol Records, and Ernst Benz, and indirectly with Pixar, Nintendo,
General Motors, Mazda, Carhartt, PNC, the UPS Store, CNN and many others through strategic relationships with other ad agencies.
Business Expansion
Plans
Direct Client Relationships
.
XI United has several ongoing direct relationships including providing services to The Beach Boys and Capitol Records and is seeking
additional direct clients as the bulk of its business presently comes through other ad agencies.
Strategic Relationships
.
XI United is seeking to create more strategic relationships with ongoing agencies of record that need interactive, advertising
or other resources Xhibit can provide. XI United will provide the interactive development for these clients and help with new business
pitches; the intent is to sign exclusive agreements to award XI United all the interactive and advertising business of such agencies.
Nurturing Existing
Clients
. XI United will continue upselling current return clients for additional interactive work, and setting existing monthly
retainers for dedicated hours.
Further Development
.
Continue to develop more internal applications and properties.
Monetize Intellectual
Property
. By integrating future AdBind tools and technology that is currently under development by Xhibit's team. Once
AdBind's tools are available, XI plans to provide monetization vehicles for its potential clients, such as plug and play
ads that can be pulled from a cloud based environment and easily integrated in mobile apps, games, social networks, high traffic
websites, and other potential clients in the digital space. This allows intellectual property owners to focus on what they do best
while XI United seeks the advertising relationships to help build their overall revenue from the project.
15
Cloud Based CRM Solutions
FlyReply.com is currently
in public beta testing. FlyReply's ESP (email service provider) platform features are available for companies to use in beta
testing. FlyReply's full CRM, social media integration, and rich media ad deployment, described below in further detail,
are still under development and Xhibit expects them to be live by the fourth quarter of 2012. FlyReply is a combination of proprietary
technology and licensed third party technology including Power MTA to ensure the highest level of delivery. It is designed to provide
more than a conventional ESP. At its core, it is a cloud based CRM application for promotional marketing to current customers with
advanced customer communication management and seamless integration of email and social marketing in one system.
Even though FlyReply
is a cloud based technology, the Company will encourage users to download an interface app for use on mobile and tablet devices
for improved functionality. Proponents claim that cloud computing allows enterprises to get their applications up and running faster,
with improved manageability, less maintenance downtime for updates, and enables information technology departments to more rapidly
adjust resources to meet fluctuating and unpredictable business demand. Xhibit's management believes that developing software,
sites and games for a "cloud based" environment will allow for faster distribution, better accessibility and easier
software updates when applicable. FlyReply was created to give companies and organizations a better connection to their customers
and clientele.
Management believes
social media and email are the most crucial forms of modern communication and that companies and organizations not benefiting from
the most robust platforms and tools for this correspondence lose substantial revenue and customer engagement. Management is developing
FlyReply with the goal of providing better communication to those customers while potentially increasing quality engagement with
video, voice, HTML and other forms of rich media. This allows a company using FlyReply to provide more complete customer service,
correspondence and product updates, and realize other monetization capabilities with its contacts.
16
Small businesses use
ESPs to conveniently deliver professional email newsletters and advertising periodically to their customers. FlyReply's user-friendly
dashboard allows for robust tracking and analytics and engineered-to-measure engagement to further understand what correspondence
appeals to different groups of customers.
FlyReply has pre-designed
message templates tailored to various types of companies and organizations. FlyReply also allows for full HTML editing as well
as an enhanced automated HTML editor for users to custom build or change messages to their specifications. An example of this template
design system is shown below:
17
FlyReply helps reduce
expensive postal mail costs by increasing social and email communication with a company's customers in a simple and easy-to-use
interface. It allows businesses to learn more about their consumers through a proprietary and real-time tracking platform, based
on actions from customer engagement. The online interface can track user engagement on a newsletter and easily allows businesses
to create divisions based on engagement criteria such as, but not limited to, interest, gender, location, and age, in order to
better target and provide more specific services and products of interests to the businesses' customers. A sample tracking panel
is shown below:
18
FlyReply's customers
will pay monthly subscription fees as their mailing lists grow based on the number of messages they send per month. Revenue will
also come from customers interested in purchasing available premium services upgrades and ad agency solutions. XI United can also
benefit from FlyReply's customers seeking to generate more subscribers for their newsletters and purchase that result-based
advertising on a performance basis. Examples of successful ESP companies which are also competitors are icontact.com, constantcontact.com
and Exact Target. Management believes that the success of these rapidly growing businesses is indicative of FlyReply's growth
potential.
Many companies are
recognizing that in the fast-paced digital world, they need to connect with their customers through social media. FlyReply's
full version (under development) synergistically combining social media and email will help streamline a business's communication
needs with its customer base, as well as allow these businesses to further monetize that customer base. FlyReply hopes to attract
Fortune 500 companies by creating a best in class cloud based solution for their ESP and promotional CRM needs.
Ad Products Under
Development
AdBind.com is a performance
based bidding advertising network and tool connecting advertisers to ad publishing vehicles across various media channels. It is
expected that AdBind.com's brand will eventually be combined with XI United's.
AdBind's bidding channels
AdSearch, AdSocial, AdMail, AdWeb, and AdMobile bridge the gap and create a "one-stop shop" for companies and individuals
interested in marketing in the technology space. The concept uses advanced tracking technology, cloud based ad development and
distribution to create an innovative user environment. Management believes that AdBind will be the exclusive portal to purchase
advertising on Xhibit's content-rich social media under development.
Once AdBind's tools
are combined with XI United, AdBind will also focus on providing plug and play monetization vehicles, such as ads that can be pulled
from their cloud based environment, and easily integrated into third party mobile apps, games, social networks, high traffic websites,
and other potential clients in the digital space.
19
Initially, AdMail will
be offered to FlyReply customers. FlyReply users can choose to "activate" AdMail within FlyReply. Once activated, this
service will automatically insert third-party and non-competing ads into companies' and organizations' newsletters delivered from
FlyReply. When users click on those ads managed by AdBind, revenue will be shared with the sender of the newsletter, generating
additional monetization from those list members. A sophisticated artificial intelligence will automatically pair both the advertiser
and the company sending the newsletter with the most mutually beneficial ads that are generating the highest conversions for the
advertiser and highest engagement within the newsletter. AdMail is currently the first feature of AdBind and is fully operational
and just recently began seeking clients but has not secured one as of this filing.
Social
Networks and Communities Under Development
New
Product Philosophies
Management of Xhibit
believes that content-rich domains, mobile and tablet apps, games and web 3.0 communities are the future of the digital space.
Xhibit's goals are to create not only web and technology development for third-party companies through its XI United division,
but also use those resources to build its own proprietary products in these areas. Xhibit aims to create captivating user experiences,
while at the same time properly monetizing its digital IP.
Many companies use
excessive ads that are intrusive to the user's experience. Xhibit plans to utilize its expertise in digital marketing and create
a less ad intrusive user environment and at the same time generate greater revenue with properly positioned and targeted advertising.
Facebook has proven that social media is an excellent source of quality customer information and data, but Xhibit understands that
targeting consumers more effectively can provide a less intrusive user experience. Xhibit plans to incentivize users to desire
to engage in the social media site and the related advertising, by providing less intrusive ads and the same "free to use"
web-based experience all people seek and enjoy.
Xhibit will continue
to develop and grow domains in strategic verticals. Xhibit's enhanced ability to monetize IP and data, coupled with direct advertiser
relationships, allows the Company to outbid competitors when vying for advertising, giving Xhibit a competitive advantage when
developing its online portfolio of products and services. Xhibit also plans to drive ad agency and publisher network traffic to
its domains, games, mobile and tablet apps, seeking a self-sustaining critical mass of participants for its online communities.
Movie/Celebrity
Focused Networks and Communities
The projects described
below are currently under development and there is no guarantee they will ever come to fruition.
Xhibit is developing
a celebrity following app that allows stars to personally record and distribute rich media content inside the app and simultaneously
through Facebook, Twitter, and other social media platforms, while growing their fan bases all in one place.
The MovieSocial project
is an interactive site and mobile app that allows users to explore the latest movie trailers, buy tickets, invite friends or find
a movie partner, and earn exclusive points. It allows users to discuss, blog, and vote on movies and earn rewards and badges for
that interaction. The MovieSocial platform is also designed to help production companies deliver movie trailer views to interested
people throughout the site and mobile app, as well as through email and mobile traffic across XI United's advertising channels
on a performance basis.
These Xhibit built
and owned communities are designed to become a way for people to connect with others across the world based on shared areas of
interest. Management believes that growing social mobile and web communities allows for better targeted advertising and, with a
large community, can add substantially to XI United's, AdBind's, and Lead Revolution's advertising capabilities. User
engagement and understanding consumers are key to advertising. Owning proprietary mobile apps and websites, coupled with its ad
agency resources, is designed to give Xhibit the ability to maintain even higher quality and more targeted ad placements for its
clients.
20
Online and Mobile Games
The projects described
below are currently under development and there is no guarantee they will ever come to fruition.
Xhibit's management
believes that social games represent a new form of entertainment that will continue to capture an increasing proportion of consumer
leisure time. In addition, social games are the most popular applications on Facebook. The Company is basing its game development
model on the premise that games and gaming have been, and will continue to be, a key driver of engagement on social networks, and
increasingly on mobile platforms. Xhibit has several mobile and Facebook games under development. These games are a work in progress
and there is no guarantee when or if they will be available to the public or as a Company offering or product. Xhibit's web
versions of these games are planned to require client side Flash to run but data is stored on servers through a remote location,
whereas the mobile and tablet versions are planned to use a client side app to improve functionality.
As consumers gravitate
toward more social forms of online entertainment, Xhibit expects that social games will capture an increasing portion of the overall
$49 billion video game software market, as estimated for 2011 by International Data Corporation.
Xhibit believes that
a player-centric approach is the key to success in social games. Games acquired and/or developed by Xhibit are designed to be:
·
Accessible by Everyone, Anywhere, Any Time.
Xhibit
intends to design
games so that they are easy to learn, playable in short sessions
and accessible on multiple platforms. They will operate as live services that can be played anytime and anywhere.
·
Social.
Games are most engaging and fun
when they are social. Xhibit intends to provide a community of players with simple ways to find their friends online and connect,
play and share with them. In addition to leveraging the viral and social features provided by social networks, Xhibit designs and
innovates social mechanics into its games.
·
Free.
Xhibit's free-to-play model attracts
a larger audience than a traditional pay-to-play approach. This enables a higher degree of social interaction and improves the
game experience for all players. Players can choose to purchase virtual goods to enhance their game experience.
·
Fun.
Xhibit intends for games to be fun
and engaging by regularly delivering new content, features, quests, challenges and virtual goods that enhance the experience for
players. As a result, the games are a perpetual source of play, evolving with a community of players over time. Players express
their personalities by designing and customizing the appearances of their characters and building and decorating their own virtual
presence and environments.
Xhibit
Social Games
Xhibit designs social
games to provide players with shared experiences that surprise and delight them. Its social games will leverage the global connectivity
and distribution of the Company's proprietary social network on Facebook, other social networks and mobile platforms, such as Apple
iOS and Google Android. The games will be free to play, span a number of genres and attract a community of players that is demographically
and geographically diverse.
Xhibit intends to provide
games as live services and will update them with fresh content and new features to make them more social, enhance player engagement
and improve monetization. Xhibit can then analyze the data generated by players' game play and social interactions to guide the
creation of new content and features. This ongoing feedback loop to keeps games compelling and enhances the player experience.
Xhibit games will be
designed to inspire and enable players to express their personalities by customizing the appearances of their characters and building
and enhancing their environment. Players then invest time in the games in a variety of ways. Through activities, players advance
in the game, which the industry refers to as leveling up. Players can choose to advance in the game by investing additional
time, requesting help from their friends or purchasing virtual goods.
21
The
Social Experience
The social design of
Xhibit's games are at the core of the way players experience the games. Xhibit's games will encourage players to quickly connect
to their friends when they start a game and to build and enhance these relationships throughout the game experience.
Virtual
Goods
In most of Xhibit's
games, players will earn virtual goods through game play, receive them as gifts or purchase them. Virtual goods are digital representations
of real world goods. Through virtual goods players are able to extend their play sessions, enhance or personalize their game environments,
accelerate their progress in games and share and trade with friends. A player's acquisition, gifting and purchase of virtual goods
create social interaction that increases their engagement with games and with each other.
The primary revenue
source from Xhibit games will be the sale of virtual currency that players use to buy in-game virtual goods. Some forms of virtual
currency are earned through game play, while other forms can only be acquired for cash or, in some cases, by accepting promotional
offers from Xhibit's advertising partners.
The following summary
provides examples of the benefits received by players from the purchase of virtual goods:
·
Invest and Express.
Many Xhibit games will offer players the opportunity to
purchase decorative and functional items to personalize their game environment and express their individual taste or style.
·
Gift.
Xhibit games will offer players the opportunity to purchase gifts for
their friends. Other features will tie offline events to online social interactions and virtual goods purchases.
·
Contribute to Social Causes
.
Xhibit will enable players to contribute to charitable
causes that they believe in by purchasing specially created virtual goods in-game.
Xhibit Technology
Xhibit architecture
is based on the standard F/OSS stack. Xhibit uses a PHP application, designed to run both on the standard Apache server, and also
uses PHP FPM. This enables Xhibit to pick between using a standard Apache server, or, when scalability dictates, move to a multi-tier
architecture using a faster web server, such as NginX. This will also enable Xhibit to divide its resources between front-end and
application parts, and enable full load-balancing and high-availability scaling. This is the same web front-end that runs the world's
heaviest use sites, with Facebook being a prime example.
The database is currently
a standard GA MySQL instance, but Xhibit is able to quickly move to a more scalable implementation, like Percona XTraDB, and from
there scale further either towards a multi-master MySQL deployment, or even towards a Gelera-enabled XtraDB Cluster if the need
should arise. However, management believes its existing database is sufficient for the foreseeable future since regular multi-master
multi-slave scalable MySQL has been proven in usage, and now without any problems powers websites such as Twitter.
Xhibit's security is
both perimeter based and also design based. Xhibit started with an industry-leading Cisco ASA firewall, but has also employed full
database built-in security, and combined them in a system designed to protect all its mission-critical and confidential data. Also,
for both database reasons, and for reasons regarding database stability, Xhibit does not deploy its database back-end in the cloud,
but instead insists on hosting it all only on physical, dedicated servers, to which Xhibit, and only Xhibit, has full access and
control. Finally, using the F/OSS software, management believes Xhibit is using the best tested and reviewed applications available.
22
In short, the entire
system is a combination of a well supported and widely deployed F/OSS stack, the same one running some of the biggest and the world's
most visited websites, carefully integrated into Xhibit's custom system, and then tied together using Xhibit's in-house software,
creating a hugely scalable, resilient and easy to expand architecture. Based on the best use-case scenarios used by the industry
leaders, and then customized and optimized to suit Xhibit's needs, management believes that this system gives Xhibit all available
advantages and puts Xhibit in a position to grow all the way to the top, while retaining control and also providing Xhibit with
the security and the ability to fully customize it as Xhibit sees fit.
All Xhibit technologies
are built with the principles of speed, reliability and easy scalability in mind. These goals are often obtained by utilizing a
unique combination of custom-built software and reliable hardware with fail-safe mechanisms.
Historically, Xhibit
has outsourced its API calls (Application Programming Interface Calls) and database management architecture which was developed
and currently maintained by an independent contractor who works out of Serbia. Xhibit is in the process of forming a wholly owned
subsidiary and this independent contractor plans to relocate to Bosnia and work with Xhibit's other software developers who are
developing its social media and online gaming software as an employee of this Bosnia subsidiary. As of the filing of this Form
8-K, this process has not been completed. See "
Risk Factors – We rely on our foreign employees and independent contractors
."
Xhibit multiplayer
gaming platforms have both client side and server side
.
Client side is a Flash/ActionScript3
based application based on ASISO engine with custom graphics and gameplay. All clients are communicating over TCP/IP with our complex
server side infrastructure, which is designed to support load balancing, fail-safe recovery and easy scalability of every component
in the system. This means that all components can effectively run on one server or hundreds of servers if the load requires it.
Some of the components are gameplay servers, image manipulation servers or central hubs.
All of Xhibit gaming
projects use in-house 3D modelers and animators.
AdBind.com's tracking
platforms are designed to deliver ads through a cluster of web servers with a backend mechanism geared to optimizing the ad conversion
by connecting the right ad with the right visitor.
FlyReply.com's delivery
platform is custom software, written in PHP/JavaScript and designed to manage hundreds of millions of emails with detailed reporting
and easy to use list management features. The technology ensures proper email delivery by using industry standard licensed PowerMTA
software.
Since all Xhibit social
networks are planned to attract high traffic, the Company is developing a system that will be able to handle high and sudden bursts
of traffic. This will be attained by designing native mobile and web applications that communicate to Xhibit's cloud servers through
a load balancer with fail-safe mechanisms, which then distributes the load to multiple web servers and creates new instances of
web servers on-the-fly to effectively and efficiently manage the bursts of traffic. When the traffic slows down, the extra web
server instances would be automatically shutdown in order to keep hosting costs at a minimum.
23
Other Information
Proprietary Rights
Xhibit's business is
significantly based on the creation, acquisition, use and protection of intellectual property. Some of this intellectual property
is in the form of software code and trade secrets that the Company uses to develop its products and to enable them to run properly
on multiple platforms. Other intellectual property created by Xhibit includes audio-visual elements, including graphics, music,
story lines and interface design.
While most of the intellectual
property utilized by Xhibit is created in house, the Company has acquired rights to certain proprietary intellectual property.
It has also obtained rights to use intellectual property through licenses and service agreements with third parties. These licenses
typically limit Xhibit's use of intellectual property to specific uses and for specific time periods.
Xhibit protects its
intellectual property rights by relying on federal, state and common law rights, as well as contractual restrictions. The Company
controls access to its proprietary technology by entering into confidentiality and invention assignment agreements with employees
and contractors, and confidentiality agreements with third parties. Xhibit also actively engages in monitoring and enforcement
activities with respect to infringing uses of its intellectual property by third parties.
In addition to these
contractual arrangements, Xhibit also relies on a combination of trade secret, copyright, trademark, trade dress, domain name and
patents to protect its products and other intellectual property. The Company typically owns the copyright to the software code
to its content, as well as the brand or title name trademark under which the products are marketed. Xhibit pursues the registration
of its domain names, trademarks, and service marks in the United States and in locations outside the United States. Its pending
and registered trademarks in the United States include "AdBind" and "Fly Reply™". It is in the process
of applying for registration of certain of its tradenames, including "XI United," "Lead Revolution," "AdMail",
"Yoosip" and "Mooke."
Circumstances outside
Xhibit's control could pose a threat to its intellectual property rights. For example, effective intellectual property protection
may not be available in the United States or other countries in which Xhibit's products are distributed. Also, the efforts Xhibit
has taken to protect its proprietary rights may not be sufficient or effective. Any significant impairment of Xhibit's intellectual
property rights could harm its business or its ability to compete. Also, protecting Xhibit intellectual property rights is costly
and time-consuming. Any unauthorized disclosure or use of the Company's intellectual property could make it more expensive to do
business, thereby harming operating results.
Companies in the Internet,
games, social media, technology and other industries may own large numbers of patents, copyrights and trademarks and may frequently
request license agreements, threaten litigation or file suit against the Company based on allegations of infringement or other
violations of intellectual property rights. From time to time Xhibit expects to face allegations by third parties, including competitors
that the Company has infringed on their trademarks, copyrights, patents and other intellectual property rights. As Xhibit faces
increasing competition and as the business grows, the Company will likely face more claims of infringement.
Research And Development
During the three-year
period ended December 31, 2011, Xhibit and its predecessor companies incurred less than $100,000 in costs related to research and
development activities. The Company expects to continue increasing levels of ongoing research and development activities for the
foreseeable future as it pursues development of online games and social media.
Government Regulation
Xhibit is subject to
a number of foreign and domestic laws and regulations that affect companies conducting business on the Internet, many of which
are still evolving and could be interpreted in ways that could harm its business. In the United States and internationally, laws
relating to the liability of providers of online services for activities of their users and other third parties are currently being
tested by a number of claims, including actions based on invasion of privacy and other torts, unfair competition, copyright and
trademark infringement, and other theories based on the nature and content of the materials searched, the ads posted, or the content
provided by users. Any court ruling or other governmental action that imposes liability on providers of online services for the
activities of their users and other third parties could harm Xhibit's business. Xhibit is potentially subject to a number of foreign
and domestic laws and regulations that affect the offering of certain types of content, such as that which depicts violence, many
of which are ill defined, still evolving and could be interpreted in ways that could harm Xhibit's business or expose us to liability.
24
In addition, rising
concern about the use of social networking technologies for illegal conduct, such as the unauthorized dissemination of national
security information, money laundering or supporting terrorist activities may in the future produce legislation or other governmental
action that could require changes to Xhibit's social properties, games, advertising and applications or restrict or impose additional
costs upon the conduct of Xhibit's business.
Xhibit, through its
ad agency subsidiary, also sometimes offers customers various types of sweepstakes, giveaways and promotion opportunities. The
Company is subject to laws in a number of jurisdictions concerning the operation and offering of such activities and games, many
of which are still evolving and could be interpreted in ways that could harm Xhibit's business. Any court ruling or other governmental
action that imposes liability on providers of online services could result in criminal or civil liability and could harm Xhibit's
business.
In the area of information
security and data protection, many states have passed laws requiring notification to users when there is a security breach for
personal data, such as the 2002 amendment to California's Information Practices Act, or requiring the adoption of minimum information
security standards that are often vaguely defined and difficult to implement. The costs of compliance with these laws may increase
in the future as a result of changes in interpretation. Furthermore, any failure on Xhibit's part to comply with these laws may
subject it to significant liabilities.
Xhibit is also subject
to federal, state and foreign laws regarding privacy and protection of customer data. The Company posts its Privacy Policy and
Terms of Service online, which describes corporate practices concerning the use, transmission and disclosure of player data. Any
failure by the Company to comply with posted privacy policy or privacy related laws and regulations could result in proceedings
against Xhibit by governmental authorities or others, which could harm the Company's business. In addition, the interpretation
of data protection laws, and their application to the Internet is unclear and in a state of flux. There is a risk that these laws
may be interpreted and applied in conflicting ways from state to state, country to country, or region to region, and in a manner
that is not consistent with current corporate data protection practices. Complying with these varying international requirements
could cause the Company to incur additional costs and change our business practices. Further, any failure by the Company to adequately
protect customers' privacy and data could result in a loss of businesses' or user's confidence in Xhibit's services
and ultimately in a loss of customers, which could adversely affect the Company's business.
In addition, because
Xhibit's services are accessible worldwide, certain foreign jurisdictions have claimed and others may claim that Xhibit is required
to comply with their laws, including in jurisdictions where Xhibit has no local entity, employees, or infrastructure. Domestically,
many states have enacted legislation to collect sales tax from online transactions. Congress currently has three separate bills
pending which address e-commerce. We expect to see increased legislation of online transactions, compliance with which will create
a greater burden on our operations and revenue.
Employees
Immediately following
the closing of the Merger, Xhibit had 22 full-time employees and no part-time employees, and the Registrant had 2 full-time employees.
The Company's future success will depend, in part, on its ability to attract, retain, and motivate highly qualified sales, technical
and management personnel. From time to time, the Company may employ independent consultants or contractors to support its research
and development, marketing, sales, accounting and administrative organizations. None of the Company's employees are represented
by any collective bargaining unit.
25
Property
Xhibit leases approximately
15,811 square feet of office space for its corporate headquarters in Tempe, Arizona under a lease from PKY Fund II Phoenix I, LLC
that expires on May 31, 2018. The Company's executive offices are located at 80 E. Rio Salado Parkway, Suite 115, Tempe, AZ
85281, (602) 281-3554. The Company is not affiliated with its lessor. This facility currently accommodates the Company's principal
executive, development, engineering, marketing, business development, human resources, finance, legal, information technology and
administrative activities.
Management believes
that the Company's existing facilities are sufficient for its current needs. The Company intends to add new facilities and expand
its existing facilities as the Company adds employees and expand its markets, and management believes that suitable additional
or substitute space will be available as needed to accommodate any such expansion of the Company's operations.
Legal Proceedings
The Company is not
involved in any material legal proceedings as of the date of this Report. From time to time, the Company may become a party to
litigation and subject to claims incident to the ordinary course of business. Although the results of litigation and claims cannot
be predicted with certainty, management currently believes that the final outcome of these matters will not have a material adverse
effect on the Company's business. Regardless of the outcome, litigation can have an adverse impact on the Company because of defense
and settlement costs, diversion of management resources and other factors.
Competition
The ad agency, ad network
and performance based marketing sectors are very competitive and continue to evolve on a regular basis. The Company faces significant
competition in all aspects of these divisions.
Competitors in the
ad network, ad agency and performance based marketing arena include but are not limited to: Omnicom Group, WPP Group, Interpublic
Group of Companies, Publicis Groupe, Dentsu, Havas Suresnes, Aegis Group, Hakuhodo DY Holdings, Asatsu-DK, MDC Partners, Sapient,
Digitas, aQuantive, Aspen Marketing Services, Cheil Communications, Monster Worldwide, WB Doner & Company, Cossette Communication
Group, Richards Group, Bartle Bogle Hegarty, M&C Saatchi, Chime Communications, Merkle Lanham, Wieden+Kennedy, RPA, Cramer-Krasselt,
ChoicePoint Precision Marketing, XL Marketing, AdConian Direct, and ValueClick Media.
The technology and
development space is also highly competitive. Some of Xhibit's top competitors include: IBM, Hewlett Packard, and Microsoft, as
well as many smaller private companies.
The ESP and CRM industry
is very competitive. Some of Xhibit's competitors include but are not limited to: SalesForce.com, Microsoft CRM, SAP AG, AmDocs,
Oracle, constant contact, iContact, bronto mail, silverpop, ExactTarget, Aweber, mailchimp, resultsmail, getresponse, and bluehornett.
Xhibit competes in this market with respect to product functionality, performance and reliability, integrated solutions, delivery
rates, customer support, cost and ease of use. Xhibit competes in this area primarily on the results it gets for its clients in
terms of new customers generated by ad campaigns.
The social media sector
is intensely competitive and is rapidly evolving. Xhibit faces significant competition in all aspects of its business. Specifically,
Xhibit competes for the leisure time, attention and discretionary spending of its users with other social media companies and game
developers on the basis of a number of factors, including quality of user experience, ease of use, brand awareness and reputation
and access to distribution channels.
26
Xhibit believes it
competes favorably on these factors. However, its industry is evolving rapidly and is becoming increasingly competitive. Other
developers of social media and games could develop more compelling content that competes with Xhibit's social media and games and
adversely affects its ability to attract and retain users, players and increase their average user engagement time. These competitors,
including companies of which management may not be currently aware, may take advantage of social networks, and other advertising
methods to access to a large user base and their network effects to grow rapidly and virally.
Xhibit's social media
competitors include:
·
Social Media and Game Developers for Facebook, and
Other Social Networks
:
Xhibit faces competition from a number of competitors who develop social media and games
for use on Facebook, and other social networks. These competitors, some of which have significant financial, technical and other
resources, greater name recognition and have longer operating histories, may create similar sites and games to reach Xhibit's players.
Some of these competitors include Google, Pinterest, Twitter, Microsoft, Facebook, Zynga, Inc., Crowdstar, Inc., Electronic Arts
Inc., The Walt Disney Company, Vostu, Ltd. and wooga GmbH. Because Xhibit's sites and games are free to use and play, Xhibit competes
primarily on the basis of player experience rather than price. Xhibit could face additional competition if large companies with
significant online presences, such as Amazon.com, Inc., Facebook, Inc., Google Inc., Microsoft Corporation, Tencent Holdings Limited
and Yahoo! Inc., choose to enter or expand more in the social media and games space or develop competing social properties and
games.
·
Social Media and Game Developers for Mobile and Tablet
Devices
:
The mobile social and game sector is characterized by frequent product introductions, rapidly emerging
mobile platforms, new technologies and new mobile application storefronts. Some of Xhibit's competitors in the mobile market include
Google, Pinterest, Twitter, Microsoft, Facebook, Zynga, Inc., Electronic Arts, DeNA Co. Ltd., Gameloft, Glu Mobile, Rovio Mobile
Ltd and Storm8, Inc. and many others. Xhibit expects new mobile and game app competitors to enter the market and existing competitors
to allocate more resources to develop and market competing games and applications.
·
Other Social Media and Game Developers
:
Xhibit's
users also play other games on PC and consoles, some of which include social features that compete with its social games and have
community functions where game developers can engage with their players. Some of these competitors include Google, Pinterest, Twitter,
Microsoft, Facebook, Zynga, Inc., Activision Blizzard, Inc., Big Fish Games, Inc., Electronic Arts, SEGA of America, Inc., THQ
Inc. and The Walt Disney Company.
·
Other Forms of Media and Entertainment
:
Xhibit
competes more broadly for the leisure time and attention of its users and players with providers of other forms of Internet and
mobile entertainment, including social networking, online casual entertainment and music. To the extent existing or potential players
choose to read, watch or listen to online content or streaming video or radio, or play interactive video games at home or on their
computer or mobile devices rather than play social games, these content services pose a competitive threat.
27
Management's Discussion and Analysis
of Financial Condition and Results of Operations – Xhibit
The following discussion
should be read in conjunction with Xhibit's audited and unaudited financial statements and associated notes filed with this Form
8-K.
Overview
Xhibit, LLC (referred
to in this Management's Discussion and Analysis section as "Xhibit" or the "Company") was organized on July
18, 2011 as a Nevada limited liability company. On August 9, 2011 Xhibit entered into a Unit Exchange Agreement whereby the members
of SpyFire Interactive, LLC ("SpyFire") and Stacked Digital, LLC ("Stacked") exchanged 100% of their membership
units for 18,292,319 of the Company's units. Concurrent with this transaction, SpyFire and Stacked became wholly-owned subsidiaries
of the Company. There is common ownership and management among all three companies. The Company, through its subsidiaries, is an
online marketing and advertising company providing targeted and measurable online advertising campaigns and programs for a broad
base of advertisers and advertising agency customers. The Company enables marketers to advertise and sell their products and services
through major online marketing channels including display advertising and affiliate marketing networks.
Application of Critical Accounting Policies
We have identified
the policies below as critical to our business operations and the understanding of our results of operations. The impact and any
associated risks related to these policies on our business operations are discussed throughout this "Management's Discussion
and Analysis of Financial Condition and Results of Operations" section when such policies affect our reported or expected
financial results.
In the ordinary course
of business, we have made a number of estimates and assumptions relating to the reporting of results of operations and financial
condition in the preparation of our financial statements in conformity with accounting principles generally accepted in the United
States. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the
circumstances. The results form the basis for making judgments about the carrying values of assets and liabilities that are not
readily apparent from other sources. Actual results could differ significantly from those estimates under different assumptions
and conditions. We believe that the following discussion addresses our most critical accounting policies, which are those that
are most important to the portrayal of our financial condition and results of operations and require our most difficult, subjective,
and complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.
Concentrations and
Credit Risk
Financial instruments
that potentially subject the Company to significant concentration of credit risk consist primarily of cash and accounts receivable.
All cash balances are maintained in a single bank and may from time to time exceed Federal Deposit Insurance Corporation ("FDIC")
insurance limits. Regarding trade accounts receivable, the Company minimizes its credit risk by performing credit evaluations of
its customers and or limiting the amount of credit extended. Accounts receivable balances are carried net of any allowances for
doubtful accounts.
Financial Instruments
The carrying value
of the Company's financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, accrued
expenses and note payable approximate fair value because of the short maturities of those instruments.
Accounts Receivable
and Allowance for Doubtful Accounts
The Company carries
its accounts receivable at costs, less an allowance for doubtful accounts. On a period basis, management evaluates accounts receivable
balances and establishes an allowance for doubtful accounts based on history of past write-offs, collections and current credit
considerations. Interest is not accrued on overdue receivables nor is collateral obtained on any amounts due.
Revenue Recognition
The Company recognizes
revenue when the following criteria have been met: persuasive evidence of an arrangement exists, no significant Company obligations
remain, collection of the related receivable is reasonably assured, and the fees are fixed or determinable. The Company recognizes
revenue at the time services are performed and sales are generated on behalf of their customers. Revenue is presented net of discounts
and allowances.
28
Advertising
Advertising costs are
expensed as incurred.
Income Taxes
The Company is a limited
liability company, and therefore is not subject to income tax, as any income or loss is allocated to and included in the personal
income tax return of its members. Accordingly, no provision is made for income taxes in the financial statements.
Segment Reporting
The Company operates
in one segment, internet marketing. All revenues and operations are within the United States.
Results of Operations
Financial Presentation
The following sets
forth a discussion and analysis of the Company's financial condition and results of operations for the year ended December 31,
2011 and the combined operations of Spyfire and Stacked for the year ended December 31, 2010 and for the quarters ended March 31,
2012 (the Company consolidated) and March 31, 2011 (Spyfire and Stacked combined). This discussion and analysis should be read
in conjunction with our consolidated financial statements appearing elsewhere in this Form 8-K. The following discussion contains
forward-looking statements. Our actual results may differ significantly from the results discussed in such forward-looking statements.
Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the "Risk Factors,"
beginning on page 33 of this Form 8-K.
Year Ended December 31, 2011 Compared
to Year Ended December 31, 2010
Revenues
. The
Company generated revenue of $6,351,384 for the year ended December 31, 2011 compared to revenue of $2,367,720 for the year ended
December 31, 2010, an increase of $3,983,664 or approximately 168%. Of this increase, approximately $2.9 million was attributable
to a contract entered into with a single large customer, AdCafe, in June 2011and the insertion order for a specific ad campaign
for this customer. While this contract provides substantial revenue, it results in only nominal margins as it is intended to drive
revenues to the Company's affiliate network for the purpose of creating network scale and volume. The contract with this customer
had an initial term of one year and has been renewed by management for an additional one year period, or into June 2013. While
the agreement has been renewed, management does not believe this contract will continue in 2012 to produce the revenue historically
experienced unless a new insertion order is generated for a new ad campaign, which is not expected to occur.
The remaining approximate
$1.1 million increase in revenue came primarily from digital ad campaigns developed for new customers and increased volumes with
existing customers. During 2011, the Company had a high concentration of revenue and credit risk as its 5 largest customers accounted
for approximately 64% of its total revenues.
Cost of Revenues
.
Cost of revenues was $3,760,553 for the year ended December 31, 2011 compared to $788,898 for the year ended December 31, 2010,
an increase of $2,971,655 or 377%.
Cost of revenues consists
primarily of amounts the Company pays to website publishers on its Lead Revolution network and revenue share payments made to various
list owners from whom the Company has agreements to utilize their consumer contact information. Also included in cost of revenues
are payments made to email service providers and payroll costs associated with our network and email delivery services. The substantial
increase in cost of revenues was driven by increased sales volume and in particular the cost of sales to support the AdCafe revenues.
29
Gross Profit
.
Gross profit was $2,590,831 for the year ended December 31, 2011 compared to $1,578,822 for the year ended December 31, 2010. While
overall gross profit increased $1,012,009 or 64%, as a result of additional sales to new customers and expanded sales to existing
customers, gross profit margin percentage decreased to 41% for the year ended December 31, 2011 from 67% for the year ended December
31, 2010. This decrease in gross margin percentage was due to a single new large customer signed in the second half of 2011 whose
contract yields nominal gross margins. The Company intends to use this customer to create scale and volume to enhance the attractiveness
of its affiliate network.
Sales and marketing
expenses.
Sales and marketing expenses were $388,589 for the year ended December 31, 2011 compared to $193,725 for the year
ended December 31, 2010, which represents an increase of $194,864 or 101%. The increase was in accord with the increase in revenues
and was due primarily to additional payroll cost incurred as the Company increased personnel to support its future growth plans.
General and administrative
expenses
. General and administrative expenses for the year ended December 31, 2011 were $2,481,846 compared to $230,745 for
the year ended December 31, 2010.
This increase of $2,251,101
was the result of increased payroll costs as the Company began increasing the number of employees during the third and fourth quarter
of 2011 by hiring a full time CFO and other senior officers in anticipation of becoming a public company and to support its aggressive
growth strategies. Many of the employees who were hired either previously served as independent contractors for the Company or
had their own companies they operated as sole proprietorships. To entice these people from operating businesses in which they were
successful, the Company not only needed to offer competitive salaries at or above market rates but also had to offer equity incentives.
Of the total $2,251,101 increase in general and administrative expenses, $1,456,568 was attributable to non-cash stock-based compensation
expense for membership units issued to certain key employees. Also contributing to the increase were legal fees and accounting
costs related to merging the subsidiaries into the Company and preparing for filings with the SEC.
Research and development
expenses
. Research and development expenses for the year ended December 31, 2011 were $49,820 as compared to zero for the year
ended December 31, 2010.
In 2011, the Company began incurring research and development costs for the first time as it began
to develop new products and services in support of its future growth plans.
Operating loss
.
In the year ended December 31, 2011, the Company had an operating loss of $329,424 compared to operating income of $1,154,352 for
the year ended December 31, 2010, a decrease in profitability of $1,483,776 or 129%.
This decrease from
profitability was the result of a $1,456,568 non-cash stock-based compensation expense recorded in general and administrative expense
for membership units issued to certain key employees as inducement to attract these highly qualified individuals. Additionally,
in order to rapidly expand and increase its market share management needed to hire a talented team of creative entrepreneurs who
demanded high salaries and develop the infrastructure necessary to become a public company. Although the Company has high margins,
it is deploying all available capital into expanding the business.
Three Months Ended March 31, 2012 Compared
to Three Months Ended March 31, 2011
Revenues.
The
substantial increase in revenue to $2,162,334 during the quarter ended March 31, 2012 from $870,315 during the quarter ended March
31, 2011, an increase of $1,292,019 or 148%, evidences the ongoing additional revenue generated by a single new large customer
contract which was not in place during the quarter ended March 31, 2011. The balance of the increase is primarily from new customers
that were not doing business with the Company in the prior year first quarter.
30
Cost of revenues.
Cost of revenues was $1,427,340 in the quarter ended March 31, 2012 as compared to $274,398 in the quarter ended March 31,
2011, an increase of $1,152,942 or 420%. Cost of revenues increased at a much higher rate than the increase in revenue itself as
the Company's contract with a single new large customer that took effect in June 2011 and had ongoing impact into the first quarter
of 2012 has much lower margins than its other customer contracts.
Gross Profit.
Gross profit for the quarter ended March 31, 2012 was $734,994 and was $595,917 for the quarter ended March 31, 2011. While overall
gross profit increased $139,077 or 23%, as a result of new business generated over the previous year quarter, gross profit margin
percentage decreased to 34% for the quarter ended March 31, 2012 versus 69% for the quarter ended March 31, 2011. This decrease
in gross profit percentage is due to the impact of a single large customer that yields nominal gross margins. The Company intends
to use this customer to create scale and volume to enhance the attractiveness of its affiliate network.
Sales and marketing
expenses.
Sales and marketing expenses increased to $165,983 in the three months ended March 31, 2012 compared to $31,988 in
the three months ended March 31, 2011, an increase of $133,995 or 419%, primarily as a result of higher payroll costs incurred
as the Company expanded its sales and marketing efforts to support future growth plans and new product offerings.
General and administrative
expenses.
General and administrative expenses were $670,662 for the three months ended March 31, 2012 compared to $98,715 for
the three months ended March 31, 2011. The $571,947 or 580% increase is primarily a result of increased payroll costs incurred
while the Company builds out its infrastructure to support its future growth plans. Additionally, the Company has incurred increased
legal expenses and accounting costs related to preparing the Company for its mergers and planned public company status.
Research and development.
Research and development expense increased to $87,326 for the quarter ended March 31, 2012 from $9,000 for the quarter ended
March 31, 2011, an increase of $78,326 or 870%. This increase reflects the Company's focus on developing new web and mobile based
products, services and technologies in support of its growth strategies. These expenditures consist primarily of programming and
software development related services.
Operating loss
.
The Company had an operating loss of $188,977 for the quarter ended March 31, 2012 as compared to operating income of $456,214
for the quarter ended March 31, 2011, a decrease in profitability of $645,191 or 141%. The current quarter loss was primarily a
result of the significant increase in payroll costs associated with the hiring of additional employees, legal fees, and increased
sales and marketing expenses as the Company sought to develop the infrastructure to support its aggressive growth plans and expand
its market share and product offerings.
Liquidity and capital
resources
. The Company has historically financed its operations through working capital generated from operations. During fiscal
year 2011, the Company used working capital generated from operations, existing cash reserves and cash received through sales of
equity to fund its operations and capital expenditures. The Company raised $875,000 through the sale of units in the Fall of 2011.
Net cash provided by
operating activities totaled $898,268 for the year ended December 31, 2011. Net cash used in investing activities for the year
ended December 31, 2011 of $31,949 was for the purchase of computers and office furniture. Net cash used in financing activities
for the year ended December 31, 2011 was $721,875. Included in financing activities was $875,000 the Company received for the sale
of 1,050,000 of its units made in a private placement during 2011.
31
Current Liquidity and Capital Resources
At December 31, 2011,
cash and cash equivalents amounted to $241,077 compared to $96,633 of cash and cash equivalents at December 31, 2010. The Company
had approximately $569,563 of cash on hand as of March 31, 2012 as compared to $298,767 as of March 31, 2011.
On April 10, 2012,
the Company repaid Mr. Richarde in full plus accrued interest for an outstanding loan he made to the Company in the remaining amount
of $225,665 on August 9, 2011. The note was originally in the amount of $333,516 and due December 31, 2011 but had been extended
to June 30, 2012.
As of May 25, 2012,
management believes that the Company's monthly required fixed cash operating expenditures are approximately $285,000. Management
estimates it will spend approximately $900,000 on capital expenditures during fiscal year 2012 to complete the build-out and furnish
its corporate offices in Tempe, Arizona and acquire the necessary computers and related IT infrastructure to support its growth
plans.
The Company has a note
payable to two of its members, one in the amount of $500,000 and the second in the amount of $200,000, each of which earns simple
interest at 10% and both of which are due and payable in September 2012.
Management intends
to raise between $4 and $6 million on or before September 30, 2012 to support its need to rapidly expand its operations and provide
the working capital necessary to do so and to fund development of its online social media and games. The Board of Directors of
the Company is also reviewing several strategic acquisitions and will need funding for these. Finally, as a public company, it
will need capital to pay its ongoing legal and accounting expenses required to meet its reporting obligations.
Management believes
this capital will be raised through the private placement of common stock of the post-Merger company. This private placement will
most likely be at a discount to the market price and dilutive to shareholders. Of course, funding may not be available or on acceptable
terms or at all. If the Company is not able to raise additional funds, it will have to curtail operations.
Based on the foregoing
assumptions, management believes cash and cash equivalents on hand at May 25, 2012 will not be sufficient to meet our anticipated
cash requirements for operations, funding our growth plans and repayment of debt obligations through the end of 2012. As a result,
the Company will need to raise additional capital, either through the issuance of additional notes payable or the sale of its shares
to fund its working capital requirements and planned investment activities for 2012. No assurances can be made that these funds
will be available on a timely basis or in terms acceptable to the Company.
Other Commitments and Contingencies
On November 9, 2011
the Company entered into a lease agreement for corporate office space in Tempe, Arizona. The Company has occupied temporary premises
since November 2011 in the same building as its corporate office suite while construction is underway to prepare it for use. Under
the terms of the agreement, the Company made a payment of $250,000 in 2011 for prepaid rent to be applied to the first (9) nine
months' rent beginning with the commencement date of June 1, 2012. Future minimum lease payments as of December 31, 2011 for the
next five years and thereafter are as follows:
Year ending December 31,
Amount
2012
$
125,022
2013
347,183
2014
368,923
2015
400,545
2016
432,167
Thereafter
668,015
Total
$
2,341,855
32
The Company has no
off-balance sheet arrangements.
Inflation
Management does not
believe that the current levels of inflation in the United Stated have had a significant impact on the operations of the Company.
If current levels of inflations hold steady, management does not believe future operations will be negatively impacted.
Risk Factors
Risks
Related To Our Overall Business
Our growth depends in part on the success
of our strategic relationships with third parties.
We anticipate that
we will continue to depend on relationships with various third parties, including technology and content providers, to grow our
business. Identifying, negotiating and documenting relationships with third parties require significant time and resources, as
does integrating third-party content and technology. Our agreements with technology and content providers and similar third parties
are typically non-exclusive and do not prohibit them from working with our competitors or from offering competing services. Our
competitors may be effective in providing incentives to these parties to favor their solutions or may prevent us from developing
strategic relationships with these parties. In addition, these third parties may not perform as expected under our agreements with
them, and we have had, and may in the future have, disagreements or disputes with these parties, which could negatively affect
our brand and reputation. It is possible that these third parties may not be able to devote the resources we expect to the relationship.
If we are unsuccessful in establishing or maintaining our relationships with these third parties, our ability to compete in the
marketplace or to grow our revenue could be impaired, and our operating results would suffer. Even if we are successful, these
relationships may not result in improved operating results.
We rely on our foreign employees and
independent contractors.
We rely primarily on
a programmer located in Serbia to manage our application programming interface calls and database management architecture and intend
to rely on programmers in Bosnia to continue to develop our ESP, CRM solutions, social media and online gaming software. The programmers
in Bosnia have sole access to our source code. Overseas operations are inherently more difficult to manage and oversee, and while
management believes that outsourcing the Company's programming work to Serbia and Bosnia is ultimately the most cost-effective
way to develop high-quality products, there is no assurance that we will not experience difficulties with our overseas programmers.
In the event that our programmers fail to deliver high-quality code within the time frames and other parameters needed by the Company,
it may be costly and take significant amounts of time to either resolve the issue with the existing programmers or locate alternate
programmers for the Company. The Company could also lose access to its source code, which could prevent us from continuing our
operations. Any political instability in Serbia or Bosnia may increase this risk.
We are subject to concentration of revenue/credit
risks.
We rely on two customers
for approximately 60% of our revenues. Our major customer AdCafe accounts for almost half of our revenues. The loss of either of
these accounts will result in a substantial decrease in revenue, but the contract with AdCafe accounts for almost no gross profit
and is used as a "loss leader" to obtain market share in the digital advertising space. However, the loss of our other
major account will have a material impact on profitability.
33
We must repay debt in the near future.
We owe $700,000 plus
interest to two shareholders. If we fail to raise additional capital we may not be able to repay this indebtedness when due in
September 2012. This may result in curtailing operations until we are able to repay this amount.
It may be difficult to predict our financial
performance because our quarterly operating results may fluctuate.
Our revenue and operating
results may vary significantly from quarter to quarter due to a variety of factors, many of which are beyond our control. You should
not rely on period-to-period comparisons of our results of operations should not be relied upon as an indication of our future
performance. Our results of operations have fallen below our own forecasts in the past and may also do so in some future periods.
If this happens, the future market price of our common stock may fall significantly. The factors that may affect our quarterly
operating results include, but are not limited to, the following:
¨
our commitment to putting our customers first even if it means forgoing short-term revenue opportunities;
¨
the cost of investing in our technology infrastructure may be greater than we anticipate;
¨
our ability to increase our customer base and customer engagement;
¨
disruptions or outages in our website availability, actual or perceived breaches of privacy, and
compromises of our customer data;
¨
fluctuations in demand for our advertising solutions or changes in customer contracts;
¨
changes in our pricing and publisher compensation policies, the pricing and publisher compensation
policies of our competitors, the pricing and publisher compensation policies of our advertiser customers, or the pricing policies
for advertising on the Internet generally;
¨
our ability to increase sales of our products and solutions to new customers and expand sales of
additional products and solutions to our existing customers;
¨
fluctuations in sales of different types of advertising, for example, the amount of advertising
sold at higher rates rather than lower rates;
¨
the size and seasonal variability of our customers' spending;
¨
the timing and amount of sales and marketing expenses incurred to attract new advertisers;
¨
the extent to which existing customers renew their agreements with us and the timing and terms
of those renewals;
¨
the loss of, or a significant reduction in business from, large customers resulting from, among
other factors, the exercise of a cancellation clause within a contract, the non-renewal of a contract or an advertising insertion
order or shifting business to a competitor when the lack of an exclusivity clause exists;
¨
fluctuations in click, lead, action, impression, and conversion rates;
¨
fluctuations in the amount of available advertising space, or views, on our networks;
¨
fluctuations in the cost of online and mobile advertising;
¨
the timing and costs of expanding our field sales organization and delays or inability in achieving
expected productivity;
34
¨
the entrance of new competitors in our market whether by established companies or the entrance
of new companies;
¨
costs related to acquisitions of technologies or businesses;
¨
possible impairments of the recorded amounts of goodwill, intangible assets, note receivable or
other long-lived assets;
¨
the timing and amount of expenses associated with litigation, regulatory investigations or restructuring
activities, including settlement costs and regulatory penalties assessed related to government enforcement actions;
¨
the adoption of new accounting pronouncements, or new interpretations of existing accounting pronouncements,
that impact the manner in which we account for, measure or disclose our results of operations, financial position or other financial
measures;
¨
fluctuations in levels of professional services fees or the incurrence of non-recurring costs;
¨
deterioration in the credit quality of our accounts receivable and an increase in the related provision;
¨
changes in tax laws or our interpretation of tax laws, changes in our effective income tax rate
or the settlement of certain tax positions with tax authorities as a result of a tax audit;
¨
macroeconomic conditions in the United States, Europe and Asia; and
¨
general industry conditions.
Given our short operating
history and the rapidly evolving market of online social media products, our historical operating results may not be useful in
predicting our future operating results. We believe our rapid growth has masked the cyclicality and seasonality of our business.
As our revenue growth rate slows, we expect that the cyclicality and seasonality in our business may become more pronounced and
may in the future cause our operating results to fluctuate. In particular, we expect sales of our marketing solutions to be weaker
in the third quarter of the year as Internet usage during the summer months generally slows.
Expenditures by advertisers
also tend to be cyclical, reflecting overall economic conditions as well as budgeting and buying patterns. Any decline in the economic
prospects of advertisers or the economy generally may alter advertisers' current or prospective spending priorities, or may increase
the time it takes us to close sales with advertisers, and could materially and adversely affect our business, results of operations,
cash flows, and financial condition.
If we fail to effectively manage our
growth, our business and operating results could be harmed.
We continue to experience
rapid growth in our headcount and operations, which will continue to place significant demands on our management and our operational
and financial infrastructure. As of June 1, 2012, substantially all of our employees had been with us for less than one year. As
we continue to grow, we must effectively integrate, develop and motivate a large number of new employees, and we must maintain
the beneficial aspects of our corporate culture. In particular, we intend to continue to make substantial investments to develop
our games and increase our Internet marketing and advertising revenues. To attract top talent, we have had to offer, and believe
we will need to continue to offer, highly competitive compensation packages before we can validate the productivity of those employees.
The risks of over-hiring or over-compensating and the challenges of integrating a rapidly growing employee base into our corporate
culture are exacerbated by our rapid expansion. Additionally, we may not be able to hire new employees quickly enough to meet our
needs. If we fail to effectively manage our hiring needs and successfully integrate our new hires, our efficiency and ability to
meet our forecasts and our employee morale, productivity and retention could suffer, and our business and operating results could
be adversely affected.
35
Additionally, if we
do not effectively manage the growth of our business and operations, the quality of our solutions could suffer, which could negatively
affect our brand, operating results and overall business. Further, we have made changes in the past, and will in the future make
changes, to our features, products and services that our customers may not like, find useful or agree with. We may also decide
to discontinue certain features, products or services, or charge for certain features, products or services that are currently
free or increase fees for any of our features, products or services. If customers are unhappy with these changes, they may reduce
or stop using our features, products or services. They may, in addition, choose to take other types of action against us such as
organizing petitions or boycotts focused on our company, our website or any of our services, filing claims with the government
or other regulatory bodies, or filing lawsuits against us. Any of these actions could negatively impact our customer growth and
engagement and our brand, which would harm our business. To effectively manage this growth, we will need to continue to improve
our operational, financial and management controls, and our reporting systems and procedures by, among other things:
¨
improving our information technology infrastructure to maintain the effectiveness of our solutions;
¨
enhancing information and communication systems to ensure that our employees and offices around
the world are well-coordinated and can effectively communicate with each other and our growing base of customers, enterprises and
professional organizations;
¨
enhancing our internal controls to ensure timely and accurate reporting of all of our operations;
and
¨
appropriately documenting our information technology systems and our business processes.
These systems enhancements
and improvements will require significant capital expenditures and allocation of valuable management and employee resources. If
we fail to implement these improvements effectively, our ability to manage our expected growth and comply with the rules and regulations
that are applicable to publicly reporting companies will be impaired.
Failures of the third-party hardware,
software and infrastructure on which we rely, including third-party data center hosting facilities, could impair the delivery of
our solutions and adversely affect our business.
We rely on computer
hardware purchased and software licensed from third parties in order to offer our products. This hardware and software may not
continue to be available on commercially reasonable terms, or at all. If we lose the right to use any of this hardware or software
or such hardware or software malfunctions, our customers could experience delays or be unable to access our services until we can
obtain and integrate equivalent technology or repair the cause of the malfunctioning hardware or software. Any delays or failures
associated with our services could upset our customers and harm our business.
We rely on bandwidth
providers, ISPs, mobile providers and social networks to deliver messages to consumers on behalf of our clients. Any errors or
defects in third-party hardware, software or infrastructure could result in errors, interruptions or a failure of our solutions.
Furthermore, this hardware, software and infrastructure may not continue to be available on commercially reasonable terms, or at
all. The loss of the right to use any of this hardware, software or infrastructure could limit access to our solutions.
36
We currently serve
our clients from 6 third-party data center hosting facilities located primarily on the East Coast and Midwest. Although our network
infrastructure is generally redundant in each of our data centers, our data storage and operational capabilities are not fully
redundant across data centers. The owners and operators of these facilities do not guarantee that our clients' access to our solutions
will be uninterrupted, error-free or secure. We do not control the operation of these facilities, and such facilities are vulnerable
to damage or interruption from a tornado, earthquake, fire, cyber-attack, terrorist attack, power loss, telecommunications failure
or similar catastrophic events. They also could be subject to break-ins, computer viruses, sabotage, intentional acts of vandalism
and other misconduct. The occurrence of a natural disaster or an act of terrorism, a decision to close the facilities without adequate
notice or other unanticipated problems could result in lengthy interruptions in the delivery of our solutions. If for any reason
our arrangement with one or more of the third-party data centers we use is terminated, we could incur additional expense in arranging
for new facilities and support. In addition, the failure of the data centers to meet our capacity requirements could result in
interruptions in the availability of our solutions or impair the functionality of our solutions, which could adversely affect our
business.
Errors, defects, disruptions
or other performance problems with the delivery of our suite of cross-channel, interactive marketing solutions may reduce our revenue,
harm our reputation and brand and adversely affect our contract renewals and our ability to attract new clients. In addition, some
of our client agreements require us to issue credits for downtime in excess of certain thresholds, and in some instances give our
clients the ability to terminate the agreements in the event of significant amounts of downtime. Our business, growth prospects
and operating results will also be harmed if our clients and potential clients are not confident that our solutions are reliable.
As we add data centers
and increase capacity in data centers to accommodate increased demand, our costs and expenses associated with these efforts may
adversely affect our operating results, liquidity and financial condition.
Programming errors or flaws in our products
could harm our reputation or decrease market acceptance of our products, which would harm our operating results.
Our products (particularly
our apps and games) may contain errors, bugs, flaws or corrupted data, and these defects may only become apparent after their launch,
particularly as we launch new products and rapidly release new features to existing products under tight time constraints. We believe
that if our customers and users have a negative experience with our products, they may be less inclined to continue or resume using
our products or recommend our products to other potential customers and users. Undetected programming errors, product defects and
data corruption can disrupt our operations, adversely affect the experience of our users, harm our reputation, cause our customers
to stop using our products, divert our resources and delay market acceptance of our products, any of which could result in legal
liability to us or harm our operating results.
Many individuals are using devices other
than personal computers to access the Internet. If users of these devices do not widely adopt solutions we develop for these devices,
our business could be adversely affected.
The number of people
who access the Internet through devices other than personal computers, including mobile telephones, personal digital assistants,
smart phones and handheld tablets or computers, has increased dramatically in the past few years and is projected to continue to
increase. If we are unable to develop mobile solutions to meet the needs of our users, our business could suffer. Additionally,
as new devices and new platforms are continually being released, it is difficult to predict the problems we may encounter in developing
versions of our solutions for use on these alternative devices, and we may need to devote significant resources to the creation,
support, and maintenance of such devices.
37
Enterprises or professional organizations,
including governmental agencies, may restrict access to our website, which could lead to the loss or slowing of growth in our customer
or user base, or the level of user engagement.
Our solutions depend
on the ability of our users and customers to access the Internet and our websites. Enterprises or professional organizations, including
governmental agencies, could block access to our websites or the Internet generally for a number of reasons such as security or
confidentiality concerns or regulatory reasons, or block or limit access to our websites, the value of our network could be negatively
impacted, which would adversely affect our ability to offer subscriptions to our users, enterprises, professional organizations
and customers.
If we lose the services of any members
of our senior management team, we may not be able to execute our business strategy.
Our success depends
in a large part upon the continued service of our senior management team. In particular, our co-founder and Chief Executive Officer,
Chris Richarde, is critical to our vision, strategic direction, culture, products and technology. Our Chief Technical Officer,
Dzenis Softic, is critical to the development of all our intellectual property. Mirco Pasqulaini, Xhibit's Digital Creative Architect,
is also critically important as he assists Dzenis Softic and the team of Bosnian programmers that develop all of the Company's
products. We do not maintain key-man insurance for Mr. Richarde, Mr. Pasqulaini, Mr. Softic, or any other member of our senior
management team. All three of these members of Xhibit's management team have at-will employment agreements with NB, Xhibit, or
one of its subsidiaries, and can leave at any time. The loss of Mr. Richarde, Mr. Softic, or Mr. Pasqulaini, even temporarily,
or any other member of senior management would harm our business.
We depend on world class talent to grow
and operate our business, and if we are unable to hire, retain and motivate our personnel, we may not be able to grow effectively.
Our future success
will depend upon our continued ability to identify, hire, develop, motivate and retain world class talent. Our ability to execute
efficiently is dependent upon contributions from all of our employees, in particular our senior management team. Key institutional
knowledge remains with a small group of employees whom we may not be able to retain. We may not be able to retain the services
of any of our key employees or members of senior management in the future. We only have at-will employment agreements with our
key employees, and we do not maintain key person life insurance for any employee. In addition, from time to time, there may be
changes in our senior management team that may be disruptive to our business. If our senior management team, including any new
hires that we may make, fails to work together effectively and to execute our plans and strategies on a timely basis, our business
could be harmed.
Our growth strategy
also depends on our ability to expand and retain our organization with world class talent. Identifying, recruiting, training and
integrating qualified individuals will require significant time, expense and attention. In addition to hiring new employees, we
must continue to focus on retaining our best talent. Competition for highly skilled technical and marketing personnel is extremely
intense, and we continue to face difficulty identifying and hiring qualified personnel in many areas of our business. We may not
be able to hire and retain such personnel at compensation levels consistent with our existing compensation and salary structure.
Many of the companies with which we compete for experienced employees have greater resources than we have and may be able to offer
more attractive terms of employment. In particular, candidates making employment decisions, particularly in high-technology industries,
often consider the value of any equity they may receive in connection with their employment. Any significant volatility in the
price of our equity may adversely affect our ability to attract or retain highly skilled technical and marketing personnel. If
we are not able to effectively increase and retain our talent, our ability to achieve our strategic objectives will be adversely
impacted, and our business will be harmed.
38
Our business will suffer if we are unable
to successfully integrate acquired companies into our business or otherwise manage the growth associated with multiple acquisitions.
We have acquired businesses,
personnel and technologies in the past and we intend to continue to pursue acquisitions that are complementary to our existing
business and expand our employee base and the breadth of our offerings. Our ability to grow through future acquisitions will depend
on the availability of suitable acquisition and investment candidates at an acceptable cost, our ability to compete effectively
to attract these candidates and the availability of financing to complete larger acquisitions. Since we expect our industry to
consolidate in the future, we may face significant competition in executing our growth strategy. Future acquisitions or investments
could result in potential dilutive issuances of equity securities, use of significant cash balances or incurrence of debt, contingent
liabilities or amortization expenses related to goodwill and other intangible assets, any of which could adversely affect our financial
condition and results of operations. The benefits of an acquisition or investment may also take considerable time to develop, and
we cannot be certain that any particular acquisition or investment will produce the intended benefits.
Risks
Related To Our Advertising Business
The market for cross-channel, interactive
marketing solutions is relatively new and emerging. If the market develops more slowly or differently than we expect, our business,
growth prospects and financial condition would be adversely affected.
The market for cross-channel,
interactive marketing solutions, such as ours, is relatively new and may not achieve or sustain high levels of demand and market
acceptance. While email has been used successfully for interactive marketing for several years, marketing via new interactive marketing
channels such as mobile and social media is not as well established, and revenue from email represents a substantial majority of
our total revenue. The future growth of our business depends both on the acceptance and expansion of emerging interactive marketing
channels, as well as the continued use and growth of existing interactive marketing channels, including email. Even if interactive
marketing through these channels becomes widely adopted, our suite of cross-channel, interactive marketing solutions may not continue
to be utilized by our existing clients or we may not acquire new clients. Organizations may not make significant investments in
cross-channel, interactive marketing solutions and may not purchase solutions to address their interactive marketing needs. If
cross-channel, interactive marketing solutions are not widely adopted, or the market for such solutions does not develop as we
expect, our business, growth prospects and financial condition would be adversely affected.
We may not be able to scale our infrastructure
quickly enough to meet our clients' growing needs and, even if we can, our operations may be disrupted or our operating results
could be harmed.
As usage of our suite
of cross-channel, interactive marketing solutions grows and as clients use our solutions for more advanced interactive marketing
programs, we will need to devote additional resources to improving our application architecture and our infrastructure to maintain
our solutions' performance. Any failure of or delays in our systems could cause service interruptions or impaired system performance.
If sustained or repeated, these performance issues could reduce the attractiveness of our solutions to clients, result in decreased
sales to new clients and lower renewal rates by existing clients, which could hurt our revenue growth and our reputation. We also
may need to expand our hosting operations at a more rapid pace than we have in the past. This would involve spending substantial
amounts to purchase or lease data center capacity and equipment, upgrade our technology and infrastructure and introduce new solutions.
Similarly, our international expansion efforts could require us to use data centers located outside the United States. We may not
be able to scale our existing systems in a manner that is satisfactory to our existing or prospective clients. In addition, any
such expansion will require management time and support, could be expensive and complex, could result in inefficiencies, unsuccessful
data transfers or operational failures, could reduce our margins and could adversely impact our financial results. Moreover, there
are inherent risks associated with upgrading, improving and expanding our information technology systems. We cannot be sure that
the improvements to our infrastructure and systems will be fully or effectively implemented on a timely basis, if at all.
39
Our revenue could decline if we fail
to effectively manage our existing advertising space, and our growth could be impeded if we fail to acquire new advertising space.
Our success depends
in part on our ability to effectively manage our existing advertising space as well as successfully access advertising space available
on ad exchanges and through ad network optimization service providers. The Web publishers and mobile application developers that
list their unsold advertising space with us are not bound by long-term contracts that ensure us a consistent supply of advertising
space, which we refer to as inventory. All of our contracts can either be terminated immediately or upon thirty (30) days notice.
In addition, Web publishers and mobile application developers can change the amount of inventory they make available to us at any
time. If a Web publisher or mobile application developer decides not to make advertising space from its websites available to us,
we may not be able to replace this advertising space with advertising space from other sources that have comparable traffic patterns
and user demographics quickly enough to fulfill our advertisers' requests. This would result in lost revenue.
If we do not continue to attract new
customers, or if existing customers do not renew their subscriptions, renew on less favorable terms, or fail to purchase additional
solutions, we may not achieve our revenue projections, and our operating results would be harmed.
In order to grow our
business, we must continually attract new customers, sell additional solutions to existing customers and reduce the level of non-renewals
in our business. Our ability to do so depends in large part on the success of our sales and marketing efforts. We do not typically
enter into long-term contracts with our customers, and even when we do, they can generally terminate their relationship with us.
We have limited historical data with respect to rates of customer renewals, upgrades and expansions, so we may not accurately predict
future trends for any of these metrics. Furthermore, unlike traditional software companies, the nature of our products and solutions
is such that customers may decide to terminate or not renew their agreements with us without causing significant disruptions to
their own businesses.
We must demonstrate
that our marketing solutions provide our advertising and email marketing with access to an audience of one of the most influential
audiences on the Internet. However, potential customers may not be familiar with our solutions or may prefer other more traditional
products and services for their advertising and marketing needs.
The rate at which we
expand our customer base or increase our customers' renewal rates may decline or fluctuate because of several factors, including
the prices of our solutions, the prices of products and services offered by our competitors, or reductions in their marketing spending
levels due to macroeconomic or other factors and the efficacy and cost-effectiveness of our solutions. If we do not attract new
customers or if our customers do not renew their agreements for our solutions, renew on less favorable terms, or do not purchase
additional functionality or offerings, our revenue may grow more slowly than expected or decline.
Ultimately, attracting
new customers and retaining existing customers requires that we continue to provide high quality solutions that our customers value.
In particular, customers of our marketing solutions will not continue to do business with us if their advertisements do not reach
their intended audiences. Therefore we must continue to demonstrate to our customers that using our marketing solutions is the
most effective and cost-efficient way to maximize their results. Even if our marketing solutions are providing value to our customers,
advertisers are sensitive to general economic downturns and reductions in consumer spending, among other events and trends, which
generally results in reduced advertising expenditures and could adversely affect sales of our marketing solutions. If we fail to
provide high quality solutions and convince customers of our value proposition, we may not be able to retain existing customers
or attract new customers, which would harm our business and operating results.
40
Our business is partially dependent
on the market for email marketing services.
We derive, and expect
to continue to derive, a significant portion of our revenue from our email marketing product. As a result, widespread acceptance
of email marketing among our target organizations is critical to our future growth and success. The overall market for email marketing
and related services is relatively new and still evolving, and smaller organizations have generally been slower than larger organizations
to adopt email marketing as part of their marketing mix. There is no certainty regarding how or whether this market will develop,
or whether it will experience any significant contractions. Our ability to attract and retain customers will depend in part on
our ability to make email marketing convenient, effective and affordable. If smaller organizations determine that email marketing
does not sufficiently benefit them, existing customers may cancel their accounts and new customers may decide not to adopt email
marketing. In addition, many smaller organizations lack the technical expertise to effectively send email marketing campaigns.
As technology advances, however, smaller organizations may establish the capability to manage their own email marketing and therefore
have no need for our email marketing product. If the market for email marketing services fails to grow or grows more slowly than
we currently anticipate, demand for our services may decline and our revenue would suffer.
If the delivery of our customers' emails
is limited or blocked, the fees we may be able to charge for our email marketing product may not be accepted by the market and
customers may cancel their accounts.
ISPs can block emails
from reaching their users. Recent releases of ISP software and the implementation of stringent new policies by ISPs make it more
difficult to deliver our customers' marketing emails. We continually improve our own technology and work closely with ISPs to maintain
our deliverability rates. If ISPs materially limit or halt the delivery of our customers' emails, or if we fail to deliver our
customers' emails in a manner compatible with ISPs' email handling or authentication technologies, then the fees we charge for
our email marketing product may not be accepted by the market, and customers may cancel their accounts.
Various private spam blacklists have
in the past interfered with, and may in the future interfere with, the effectiveness of our products and our ability to conduct
business.
We depend on email
to market to and communicate with our email marketing customers, and our email marketing customers rely on email to communicate
with their constituents. Various private entities attempt to regulate the use of email for commercial solicitation. These entities
often advocate standards of conduct or practice that significantly exceed current legal requirements and classify certain email
solicitations that comply with current legal requirements as spam. Some of these entities maintain "blacklists" of companies
and individuals, and the websites, ISPs and Internet protocol addresses associated with those companies or individuals, that do
not adhere to those standards of conduct or practices for commercial email solicitations that the blacklisting entity believes
are appropriate. If a company's Internet protocol addresses are listed by a blacklisting entity, emails sent from those addresses
may be blocked if they are sent to any Internet domain or Internet address that subscribes to the blacklisting entity's service
or purchases its blacklist.
Some of our Internet
protocol addresses currently are listed with one or more blacklisting entities and, in the future, our Internet protocol addresses
may also be listed with these and other blacklisting entities. There can be no guarantee that we will not continue to be blacklisted
or that we will be able to successfully remove ourselves from those lists. Blacklisting of this type could interfere with our ability
to market our products and services and communicate with our customers and could undermine the effectiveness of our customers'
email marketing campaigns, all of which could have a material negative impact on our business and results of operations.
If we fail to compete effectively against
other Internet advertising companies, we could lose customers or advertising inventory and our revenue and results of operations
could decline.
The Internet advertising
markets are characterized by rapidly changing technologies, evolving industry standards, frequent new product and service introductions,
and changing customer demands. The introduction of new products and services embodying new technologies and the emergence of new
industry standards and practices could render our existing products and services obsolete and unmarketable or require unanticipated
technology or other investments. Our failure to adapt successfully to these changes could harm our business, results of operations
and financial condition.
41
The market for Internet
advertising and related products and services is highly competitive. We expect this competition to continue to increase, in part
because there are no significant barriers to entry to our industry. Increased competition may result in price reductions for advertising
space, reduced margins and loss of market share. Competitors in the ad network, ad agency and performance-based marketing arena
include but are not limited to: Omnicom Group, WPP Group, Interpublic Group of Companies, Publicis Groupe, Dentsu, Havas Suresnes,
Aegis Group, Hakuhodo DY Holdings, Asatsu-DK, MDC Partners, Sapient, Digitas, aQuantive, Aspen Marketing Services, Cheil Communications,
Monster Worldwide, WB Doner & Company, Cossette Communication Group. Richards Group, Bartle Bogle Hegarty, M&C Saatchi,
Chime Communications, Merkle Lanham, Wieden+Kennedy, RPA, Cramer-Krasselt, ChoicePoint Precision Marketing, XL Marketing, AdConian
Direct, and ValueClick Media.
Our principal competitors
include other companies that provide advertisers with performance-based Internet advertising solutions and companies that offer
pay-per-click search services. We compete in the performance-based marketing division with CPL and CPA performance-based companies,
and with other large Internet display advertising networks. In addition, we compete in the online comparison shopping market with
focused comparison shopping websites, and with search engines and portals such as Yahoo!, Google and MSN, and with online retailers
such as Amazon.com and eBay. Large websites with brand recognition, such as Yahoo!, Google, Facebook, AOL and MSN, have substantial
proprietary online advertising inventory that may provide competitive advantages compared to our networks and other inventory sources,
and they have the ability to significantly influence pricing for online advertising overall. These companies have longer operating
histories, greater name recognition and have greater financial, technical, sales, and marketing resources than we have.
Competition for advertising
placements among current and future suppliers of Internet navigational and informational services, high-traffic websites and Internet
service providers ("ISPs"), as well as competition with other media for advertising placements, could result in significant
price competition, declining margins and reductions in advertising revenue. In addition, as we continue our efforts to expand the
scope of our Web services, we may compete with a greater number of Web publishers and other media companies across an increasing
range of different Web services, including in vertical markets where competitors may have advantages in expertise, brand recognition
and other areas. If existing or future competitors develop or offer products or services that provide significant performance,
price, creative, or other advantages over those offered by us, our business, results of operations and financial condition could
be negatively affected. We also compete with traditional advertising media, such as direct mail, television, radio, cable, and
print, for a share of advertisers' total advertising budgets. Many current and potential competitors enjoy competitive advantages
over us, such as longer operating histories, greater name recognition, larger customer bases, greater access to advertising space
on high-traffic websites, and significantly greater financial, technical, sales, and marketing resources. As a result, we may not
be able to compete successfully. If we fail to compete successfully, we could lose customers or advertising inventory and our revenue
and results of operations could decline.
Risks
Related To Our Social Media And Gaming Business
Integrating Social Bounce LLC and its
social media applications with the Company's other operations may pose challenges to the Company.
Xhibit recently acquired
Social Bounce LLC, a company that is developing a social media platform of games as well as a social media platform that connects
users with celebrities. While our management overlaps with the management of Bounce, there is no assurance that we will be successful
in making Bounce part of our Company. We need to integrate Bounce's current and proposed operations with our historical focus on
Internet marketing and advertising through our other operating subsidiaries. Any diversion of management's time and attention to
these new products, which is expected to occur, may cause revenues from our Internet marketing and advertising divisions to decline.
If new revenue from Social Bounce does not offset such a decline, then the Company's overall revenue may decline.
42
With respect to our social media operations,
we have a short operating history in a new and unproven market, which makes it difficult to evaluate our future prospects and may
increase the risk that we will not be successful.
We have a short operating
history in a new and unproven market that may not develop as expected, if at all. This short operating history makes it difficult
to effectively assess our future prospects. Our business and prospects should be considered in light of the risks and difficulties
we encounter in this rapidly evolving market. These risks and difficulties include our ability to, among other things:
¨
increase our number of customers and customer engagement;
¨
avoid interruptions or disruptions in our service or slower than expected website load times;
¨
develop a scalable, high-performance technology infrastructure that can efficiently and reliably
handle increased customer usage globally, as well as the deployment of new features and products;
¨
responsibly use the data that our customers share with us to provide solutions that meet the needs
of our customers;
¨
increase revenue from the solutions we provide;
¨
continue to earn and preserve our customers' trust with respect to their information;
¨
process, store and use personal data in compliance with governmental regulation and other legal
obligations related to privacy;
¨
successfully compete with other companies that are currently in, or may in the future enter, the
online marketing and social media spaces;
¨
hire, integrate and retain world class talent; and
¨
successfully expand our business, especially internationally.
If the market for the
Company's new focus of online social media does not develop as we expect, or if we fail to address the needs of this market, our
business will be harmed. We may not be able to successfully address these risks and difficulties or others, including those
described elsewhere in these risk factors. Failure to adequately address these risks and difficulties could harm our business
and cause our operating results to suffer.
43
We may not timely and effectively scale
and adapt our existing technology and network infrastructure to ensure that our social media websites are accessible within an
acceptable load time.
A key element to our
continued growth is the ability of our users (whom we define as anyone who visits our websites, regardless of whether or not they
are a paying customer) in all geographies to access our websites within acceptable load times. We call this website performance.
We have experienced, and may in the future experience, website disruptions, outages and other performance problems due to a variety
of factors, including infrastructure changes, human or software errors, capacity constraints due to an overwhelming number of users
accessing our websites simultaneously, and denial of service or fraud or security attacks. In some instances, we may not be able
to identify the cause or causes of these website performance problems within an acceptable period of time. It may become increasingly
difficult to maintain and improve our website performance, especially during peak usage times and as our solutions become more
complex and our user traffic increases. If our websites are unavailable when users attempt to access them or do not load as quickly
as they expect, users may seek other websites to obtain the information for which they are looking, and may not return to our websites
as often in the future, or at all. This would negatively impact our ability to attract users and increase engagement on our website.
We expect to continue to make significant investments to maintain and improve website performance and to enable rapid releases
of new features and products. 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 harmed.
We expect the number of our registered
social media users to be higher than the number of actual users, and the majority of our page views to be generated by a minority
of our users.
The number of registered
users in our social media network is likely to be higher than the number of actual users because some users may have multiple registrations,
other users have died or become incapacitated, and others may have registered under fictitious names. Given the challenges inherent
in identifying these accounts, we will not have a reliable system to accurately identify the number of actual users, and thus we
rely on the number of registered users as our measure of the size of our network. Further, a substantial amount of our users may
not visit our website on a monthly basis, and a substantial majority of our page views are likely to be generated by a minority
of our users. If the number of our actual users does not meet our expectations or we are unable to increase the breadth and frequency
of our visiting users, then our business may not grow as fast as we expect, which will harm our operating and financial results.
Changes in how we generate online consumer
traffic for our social media websites could negatively impact our ability to maintain or grow the revenue and profitability levels
of this division.
We generate online
consumer traffic for our destination websites using various methods, including: search engine marketing (SEM); search engine optimization
(SEO); organic traffic; email campaigns; and distribution agreements with other website publishers. The revenue of this division
of our operations are dependent upon our continued ability to use a combination of these methods to generate online consumer traffic
to our websites in a cost-efficient manner. Our SEM and SEO techniques have been developed to work with the existing search algorithms
utilized by the major search engines. The major search engines frequently modify their search algorithms. Future changes in these
search algorithms could change the mix of the methods we use to generate online consumer traffic for our destination websites and
could negatively impact our ability to generate such traffic in a cost-efficient manner, which could result in a significant reduction
to the revenue of this division. If search engine companies modify their search algorithms in ways that are detrimental to our
new user growth or in ways that make it harder for our users to use our websites, or if our competitors' SEO efforts are more successful
than ours, overall growth in our users base could slow, user engagement could decrease, and we could lose existing users. These
modifications may be prompted by search engine companies entering the online social media market or aligning with competitors.
There can be no assurances that we will be able to maintain the current mix of online consumer traffic sources for our destination
websites or that we will be able to modify our SEM and SEO techniques to address any future search algorithm changes made by the
major search engines.
If we are unable to maintain a good
relationship with Facebook, our business will suffer.
Facebook is planned
to be the primary distribution, marketing, promotion and payment platform for our games under development to users beyond the contacts
we have from our advertising division. We expect to generate a substantial portion of our game revenue and players through the
Facebook platform and expect to continue to do so for the foreseeable future. Any deterioration in our relationship with Facebook
would harm our business and adversely affect the value of our equity.
44
We are subject to Facebook's
standard terms and conditions for application developers, which govern the promotion, distribution and operation of games and other
applications on the Facebook platform.
Our business would
be harmed if:
¨
Facebook discontinues or limits access to its platform by us and other game developers;
¨
Facebook modifies its terms of service or other policies, including fees charged to, or other restrictions
on, us or other application developers, or Facebook changes how the personal information of its users is made available to application
developers on the Facebook platform or shared by users;
¨
Facebook establishes more favorable relationships with one or more of our competitors; or
¨
Facebook develops its own competitive offerings.
We expect to benefit
from Facebook's strong brand recognition and large user base. If Facebook loses its market position or otherwise falls out of favor
with Internet users, we would need to identify alternative channels for marketing, promoting and distributing our games, which
would consume substantial resources and may not be effective. In addition, Facebook has broad discretion to change its terms of
service and other policies with respect to us and other developers, and those changes may be unfavorable to us. For example, in
2010 Facebook adopted a policy requiring applications on Facebook accept only its virtual currency, Facebook Credits, as payment
from users. As a result of this change, Facebook will receive a greater share of payments made by our players than it would when
other payment options were allowed. Facebook may also change its fee structure, add fees associated with access to and use of the
Facebook platform, change how the personal information of its users is made available to application developers on the Facebook
platform or restrict how Facebook users can share information with friends on their platform. Beginning in early 2010, Facebook
changed its policies for application developers regarding use of its communication channels. These changes limited the level of
communication among users about applications on the Facebook platform. As a result, the number of other game developers' players
on Facebook declined. Any such changes in the future could significantly alter how players experience our games or interact within
our games, which may harm our business.
We intend to take steps
to reduce our reliance on Facebook in the future, but there can be no assurance that we will be successful in doing so.
If our security measures are compromised,
or if our website is subject to attacks that degrade or deny the ability of customers to access our solutions, customers may curtail
or stop use of our solutions.
Our solutions involve
the storage and transmission of customers' information, some of which may be private, and security breaches could expose us to
a risk of loss of this information, which could result in potential liability and litigation. Like all websites, our websites are
vulnerable to computer viruses, break-ins, phishing attacks, attempts to overload our servers with denial-of-service or other attacks
and similar disruptions from unauthorized use of our computer systems, any of which could lead to interruptions, delays, or website
shutdowns, causing loss of critical data or the unauthorized disclosure or use of personally identifiable or other confidential
information. If we experience compromises to our security that result in website performance or availability problems, the complete
shutdown of our websites, or the loss or unauthorized disclosure of confidential information, our customers may lose trust and
confidence in us, and decrease the use of our websites or stop using our websites in their entirety. Further, outside parties may
attempt to fraudulently induce employees or customers to disclose sensitive information in order to gain access to our information
or our customers' information. Because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage
systems change frequently, often are not recognized until launched against a target and may originate from less regulated and remote
areas around the world, we may be unable to proactively address these techniques or to implement adequate preventative measures.
Any or all of these issues could negatively impact our ability to attract new users and increase engagement by existing users,
cause existing users to close their accounts or existing customers to cancel their contracts, subject us to third-party lawsuits,
regulatory fines or other action or liability, thereby harming our operating results.
45
The proliferation of "cheating"
programs and scam offers that seek to exploit online games and players affects the game-playing experience and may lead players
to stop playing our games.
Unrelated third parties
have developed, and may continue to develop, "cheating" programs that enable players to exploit online and mobile games,
play them in an automated way or obtain unfair advantages over other players who do play fairly. These programs harm the experience
of players who play fairly and may disrupt the virtual economy of our games. In addition, unrelated third parties may attempt to
scam our players with fake offers for virtual goods. We plan to devote resources to discover and disable these programs and activities,
but if we are unable to do so quickly our operations may be disrupted, our reputation damaged and players may stop playing our
games. This may lead to lost revenue from paying players, increased cost of developing technological measures to combat these programs
and activities, legal claims relating to the diminution in value of our virtual currency and goods, and increased customer service
costs needed to respond to dissatisfied players.
We must launch and enhance games that
attract and retain a significant number of players in order to grow our revenue.
Our future growth in
the online social gaming division depends on our ability to consistently launch new games that achieve significant popularity.
Each of our games will require significant engineering, marketing and other resources to develop, launch and sustain via regular
upgrades and expansions. Our ability to successfully launch, sustain and expand games and attract and retain players largely depends
on our ability to:
¨
anticipate and effectively respond to changing game player interests and preferences;
¨
anticipate or respond to changes in the competitive landscape;
¨
attract, retain and motivate talented game designers, product managers and engineers;
¨
develop, sustain and expand games that are fun, interesting and compelling to play;
¨
effectively market new games and enhancements to our existing players and new players;
¨
minimize launch delays and cost overruns on new games and game expansions;
¨
minimize downtime and other technical difficulties; and
¨
acquire high quality assets, personnel and companies.
It is difficult to
consistently anticipate player demand on a large scale, particularly as we develop new games in new genres or new markets, including
international markets and mobile platforms. If we do not successfully launch games that attract and retain a significant number
of players and extend the life of our existing games, our market share, reputation and financial results will be harmed.
46
If our top games do not maintain their
popularity, our results of operations could be harmed.
In addition to creating
new games that are attractive to a significant number of players, we must extend the life of our games, in particular our most
successful games. For a game to remain popular, we must constantly enhance, expand or upgrade the game with new features that players
find attractive. Such constant enhancement requires the investment of significant resources, particularly with older games and
such costs are expected to increase. We may not be able to successfully enhance, expand or upgrade our games. Any reduction in
the number of players of our most popular games, any decrease in the popularity of our games or social games in general, any breach
of game-related security or prolonged server interruption, any loss of rights to any intellectual property underlying such games,
or any other adverse developments relating to our most popular games, could harm our results of operations.
There are low barriers to entry in the
social media industry and online gaming industry, and competition is intense.
The social media industry
and online gaming industry is highly competitive, with low barriers to entry and we expect more companies to enter the sector and
a wider range of social media sites to be introduced. Our competitors that develop social networks vary in size and include Google,
Twitter, Microsoft, Facebook, Pinterest, Groupon, LivingSocial, Zynga, Inc., Crowdstar, Inc., Electronic Arts Inc., The Walt Disney
Company, Vostu, Ltd. and wooga GmbH. In addition, high-profile companies with significant online presences that to date have not
developed social networks, such as Amazon.com, Microsoft Corporation and Yahoo! Inc., may decide to develop social networks. Some
of these current and potential competitors have significant resources for developing or acquiring networks, may be able to incorporate
their own strong brands and assets into their networks, have a more diversified set of revenue sources than we do and may be less
severely affected by changes in consumer preferences, regulations or other developments that may impact the online social media
industry. In addition, we have limited experience in developing networks for mobile and other platforms and our ability to succeed
on those platforms is uncertain. As we continue to devote significant resources to developing networks as well as games for those
platforms, we will face significant competition from established companies that may have far greater experience than us, including
(in the online social game industry) Electronic Arts Inc., DeNA Co. Ltd., Gameloft SA, Glu Mobile Inc. and Rovio Mobile Ltd. We
expect new competitors to enter the market and existing competitors to allocate more resources to develop and market competing
applications.
Competition within the broader entertainment
industry is intense and our existing and potential players may be attracted to competing forms of entertainment such as offline
and traditional online games, television, movies and sports, as well as other entertainment options on the Internet.
Our online gaming players
will face a vast array of entertainment choices. Other forms of entertainment such as offline, traditional online, personal computer
and console games, television, movies, sports and the Internet are much larger and more well-established markets and may be perceived
by our players to offer greater variety, affordability, interactivity and enjoyment. These other forms of entertainment compete
for the discretionary time and income of our players. If we are unable to sustain sufficient interest in our games in comparison
to other forms of entertainment, including new forms of entertainment, our business model may no longer be viable.
47
Risks
Related To Government Regulation, Potential Litigation And Our Intellectual Property
Government enforcement actions, changes
in government regulation, technical proposals and industry standards, including, but not limited to, spyware, privacy and email
matters, could decrease demand for our products and services and increase our costs of doing business.
Laws and regulations
that apply to Internet communications, commerce and advertising are becoming more prevalent. These regulations could affect the
costs of communicating on the Web and could adversely affect the demand for our advertising solutions or otherwise harm our business,
results of operations and financial condition. The United States Congress has also enacted Internet legislation regarding children's
privacy, copyrights, sending of commercial email (e.g., the Federal CAN-SPAM Act of 2003 and the Digital Millennium Copyright Act),
and taxation. The United States Congress has passed legislation regarding spyware (i.e., H.R. 964, the "Spy Act of 2007")
and the New York Attorney General's office has also pursued enforcement actions against companies in this industry. In addition,
on December 1, 2010, the FTC issued its long-awaited staff report criticizing industry self-regulatory efforts as too slow and
lacking adequate protections for consumers and emphasizing a need for simplified notice, choice and transparency to the consumer
of the collection, use and sharing of their data. The FTC suggests various methods and measures, including an implementation of
a "Do Not Track" mechanism - likely a persistent setting on consumers' browsers - that consumers can choose whether to
allow the tracking of their online searching and browsing activities. As a result of the report, some of the browser makers have
been working on their own do-not-track technical solutions, notably Microsoft Internet Explorer, Mozilla Firefox, Apple Safari,
and Google Chrome. Microsoft's Internet Explorer 9 offers a tracking protection feature that doesn't allow for tracking by allowing
Internet users to download tracking protection block lists which consequently block any third-party domain included in such block
lists from serving content. This content-blocking feature, depending on the adoption by Internet users, may adversely affect our
ability to grow our company, maintain our current revenues and profitability, and serve and monetize content.
Recently on the federal
level, there have been a number of House bills that have been introduced addressing online privacy, including Congressman Bobby
Rush's Best Practices Act - H.R. 611, Congressman Cliff Stearns' Consumer Privacy Protection Act of 2011, and Congresswoman Jackie
Speier's Do Not Track Me Online Act of 2011 - H.R. 654. In the Senate, Senators John Kerry and John McCain have introduced bipartisan
privacy legislation (the Commercial Privacy Bill of Rights Act of 2011 – S.799) that is designed to establish a regulatory
framework for the comprehensive protection of personal data for individuals under the aegis of the Federal Trade Commission and
for other purposes, including requiring that information that is used for online behavioral advertising that is not "sensitive
personally identifiable information" be subject to clear, concise and timely notice and opt-out. On the state level, California
has introduced a "Do Not Track Bill" - S.B. 761 that legislates the collection and use of information transmitted online.
There are others within the House and the Senate and possibly other states that are looking to introduce bills regarding the privacy
of online and offline data. These bills, if passed, could hinder growth in the use of the Web generally and adversely affect our
business. Other laws and regulations have been adopted and may be adopted in the future, and may address issues such as user privacy,
spyware, "do not email" lists, pricing, intellectual property ownership and infringement, copyright, trademark, trade
secret, export of encryption technology, acceptable content, search terms, lead generation, behavioral targeting, taxation, and
quality of products and services. Such measures could decrease the acceptance of the Web as a communications, commercial and advertising
medium. We have policies to prohibit abusive Internet behavior, including prohibiting the use of spam and spyware by our partners.
We process, store and use personal information
and other data, which subjects us to governmental regulation and other legal obligations related to privacy, and our actual or
perceived failure to comply with such obligations could harm our business.
We receive, store and
process personal information and other user data, and we enable our social media customers to share their personal information
with each other and with third parties. There are numerous federal, state and local laws around the world regarding privacy and
the storing, sharing, use, processing, disclosure and protection of personal information and other member data, the scope of which
are changing, subject to differing interpretations, and may be inconsistent between countries or conflict with other rules. We
generally comply with industry standards and are subject to the terms of our privacy policies and privacy-related obligations to
third parties (including voluntary third-party certification bodies such as TRUSTe). We strive to comply with all applicable laws,
policies, legal obligations and industry codes of conduct relating to privacy and data protection, to the extent possible. However,
it is possible that these obligations may be interpreted and applied in a manner that is inconsistent from one jurisdiction to
another and may conflict with other rules or our practices. Any failure or perceived failure by us to comply with our privacy policies,
our privacy-related obligations to users or other third parties, or our privacy-related legal obligations, or any compromise of
security that results in the unauthorized release or transfer of personally identifiable information or other member data, may
result in governmental enforcement actions, litigation or public statements against us by consumer advocacy groups or others and
could cause our customers to lose trust in us, which could have an adverse effect on our business. Additionally, if third parties
we work with, such as customers, vendors or developers, violate applicable laws or our policies, such violations may also put our
customers' information at risk and could in turn have an adverse effect on our business.
48
Evolving regulations concerning data
privacy may restrict our customers' ability to solicit, collect, process and use data necessary to conduct email marketing campaigns
or to send surveys and analyze the results or may increase their costs, which could harm our business.
Federal, state and
foreign governments have enacted, and may in the future enact, laws and regulations concerning the solicitation, collection, processing
or use of consumers' personal information. Such laws and regulations may require companies to implement privacy and security policies,
permit users to access, correct and delete personal information stored or maintained by such companies, inform individuals of security
breaches that affect their personal information, and, in some cases, obtain individuals' consent to use personal information for
certain purposes. Other proposed legislation could, if enacted, prohibit the use of certain technologies that track individuals'
activities on web pages or that record when individuals click through to an Internet address contained in an email message. Such
laws and regulations could restrict our email marketing customers' ability to collect and use email addresses, page viewing data,
and personal information, which may reduce demand for our products.
U.S. federal legislation entitled Controlling
the Assault of Non-Solicited Pornography and Marketing Act of 2003 imposes certain obligations on the senders of commercial emails,
which could minimize the effectiveness of our email marketing product, and establishes financial penalties for non-compliance,
which could increase the costs of our business.
In December 2003, Congress
enacted Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003, or the CAN-SPAM Act, which establishes
certain requirements for commercial email messages and specifies penalties for the transmission of commercial email messages that
are intended to deceive the recipient as to source or content. The CAN-SPAM Act, among other things, obligates the sender of commercial
emails to provide recipients with the ability to opt out of receiving future emails from the sender. In addition, some states have
passed laws regulating commercial email practices that are significantly more punitive and difficult to comply with than the CAN-SPAM
Act, particularly Utah and Michigan, which have enacted do-not-email registries listing minors who do not wish to receive unsolicited
commercial email that markets certain covered content, such as adult or other harmful products. Some portions of these state laws
may not be preempted by the CAN-SPAM Act. The ability of our email marketing customers' constituents to opt out of receiving commercial
emails may minimize the effectiveness of our email marketing product. Moreover, non-compliance with the CAN-SPAM Act carries significant
financial penalties. If we were found to be in violation of the CAN-SPAM Act, applicable state laws not preempted by the CAN-SPAM
Act, or foreign laws regulating the distribution of commercial email, whether as a result of violations by our customers or if
we were deemed to be directly subject to and in violation of these requirements, we could be required to pay penalties, which would
adversely affect our financial performance and significantly harm our business. We also may be required to change one or more aspects
of the way we operate our business, which could impair our ability to attract and retain customers or increase our operating costs.
49
Public scrutiny of Internet privacy
issues may result in increased regulation and different industry standards, which could deter or prevent us from providing our
current products and solutions to our customers, thereby harming our business.
The regulatory framework
for privacy issues worldwide is currently in flux and is likely to remain so for the foreseeable future. Practices regarding the
collection, use, storage, transmission and security of personal information by companies operating over the Internet have recently
come under increased public scrutiny. The U.S. government, including the Federal Trade Commission and the Department of Commerce,
has announced that it is reviewing the need for greater regulation for the collection of information concerning consumer behavior
on the Internet, including regulation aimed at restricting certain targeted advertising practices. On May 31, 2012, Microsoft announced
that its next version of browser, IEIO, will ship with the controversial "DO NOT TRACK" feature turned on by default,
the first company to instigate this feature. This feature sends a message to every website the user visits and leaves a message
stating you prefer not to be tracked. These features have the backing of the Federal Trade Commission which has threatened to call
for online privacy legislation. In addition, the European Union is in the process of proposing reforms to its existing data protection
legal framework, which may result in a greater compliance burden for companies with users in Europe. Various government and consumer
agencies have also called for new regulation and changes in industry practices.
Our business, including
our ability to operate and expand internationally, could be adversely affected if legislation or regulations are adopted, interpreted,
or implemented in a manner that is inconsistent with our current business practices and that require changes to these practices,
the design of our websites, products, features or our privacy policy. In particular, the success of our business has been, and
we expect will continue to be, driven by our ability to responsibly use the data that our members share with us. Therefore, our
business could be harmed by any significant change to applicable laws, regulations or industry practices regarding the use or disclosure
of data our social media customers choose to share with us, or regarding the manner in which the express or implied consent of
consumers for such use and disclosure is obtained. Such changes may require us to modify our products and features, possibly in
a material manner, and may limit our ability to develop new products and features that make use of the data that our social media
customers voluntarily share with us.
If the technology that we currently
use to target the delivery of online and mobile advertisements and to prevent fraud on our networks is restricted or becomes subject
to regulation, our expenses could increase and we could lose customers or advertising inventory.
Websites typically
place small files of non-personalized (or "anonymous") information, commonly known as cookies, on an Internet user's
hard drive. Cookies generally collect information about users on a non-personalized basis to enable websites to provide users with
a more customized experience. Cookie information is passed to the website through an Internet user's browser software. We currently
use cookies, along with other technologies, as set forth in our privacy policies, for purposes that include, without limitation,
improving the experience Web users have when they see Web advertisements, advertising campaign reporting, website reporting and
to monitor and prevent fraudulent activity on our networks. Most currently available Internet browsers allow Internet users to
modify their browser settings to prevent cookies from being stored on their hard drive, and some users currently do so. Internet
users can also delete cookies from their hard drives at any time. Some Internet commentators and privacy advocates have suggested
limiting or eliminating the use of cookies, and legislation has been introduced in some jurisdictions to regulate the use of cookie
technology. The effectiveness of our technology could be limited by any reduction or limitation in the use of cookies. If the use
or effectiveness of cookies were limited, we expect that we would need to switch to other technologies to gather demographic and
behavioral information. While such technologies currently exist, they may be less effective than cookies. We also expect that we
would need to develop or acquire other technology to monitor and prevent fraudulent activity on our networks. Replacement of cookies
could require reengineering time and resources, might not be completed in time to avoid losing customers or advertising inventory,
and might not be commercially feasible. Our use of cookie technology or any other technologies designed to collect Internet usage
information may subject us to litigation or investigations in the future. Any litigation or government action against us could
be costly and time consuming, require us to change our business practices and divert management's attention.
50
Several states have implemented or proposed
regulations that impose sales tax on certain e-commerce transactions involving the use of affiliate marketing programs and several
bills have been introduced in Congress that could affect sales tax of e-commerce.
In 2008, the state
of New York implemented regulations that require advertisers to collect and remit sales taxes on sales made to residents of New
York if the affiliate/publisher that facilitated that sale is a New York-based entity. In early 2011 and mid-2011, the states of
Illinois and California, respectively, also passed similar regulations. In addition, several other states, including Arkansas,
Connecticut, North Carolina, Rhode Island and Vermont, have passed or proposed similar regulations, although some of these proposed
regulations are being challenged in court, have not become effective, or did not pass. The California regulation was subsequently
delayed until September 15, 2012 (if a federal law authorizing states to require retailers to collect taxes, regardless of the
location of the retailer, is not enacted on or before July 31, 2012). On November 30, 2011, the U.S. House Judiciary Committee
held an oversight hearing on the constitutional limitations on states' authority to collect sales tax on e-commerce. Congress
currently is considering three remote sales tax proposals in the Main Street Fairness Act (S. 1452 and H.R. 2701), the Marketplace
Equity Act (H.R. 3179), and the Marketplace Fairness Act (S.1832). Congressional hearings have been set for July 2012 to discuss
these bills. These taxes would impact our business. However, given the state of flux of this area of regulation, we are unable
to determine the impact if additional states adopt similar requirements or if Congress adopts regulations affecting the same.
Our business is subject to a variety
of U.S. and foreign laws, many of which are unsettled and still developing and could subject us to claims or otherwise harm our
business.
We are subject to a
variety of laws in the United States and abroad, including laws regarding data retention, privacy and consumer protection, that
are continuously evolving and developing. The scope and interpretation of the laws that are or may be applicable to us are often
uncertain and may be conflicting, particularly laws outside the United States. For example, laws relating to the liability of providers
of online services for activities of their users and other third parties are currently being tested by a number of claims, including
actions based on invasion of privacy and other torts, unfair competition, copyright and trademark infringement, and other theories
based on the nature and content of the materials searched, the ads posted, or the content provided by users. In addition, regulatory
authorities around the world are considering a number of legislative and regulatory proposals concerning data protection and other
matters that may be applicable to our business. It is also likely that as our business grows and evolves and our solutions are
used in a greater number of countries, we will become subject to laws and regulations in additional jurisdictions. It is difficult
to predict how existing laws will be applied to our business and the new laws to which we may become subject.
If we are not able
to comply with these laws or regulations or if we become liable under these laws or regulations, we could be directly harmed, and
we may be forced to implement new measures to reduce our exposure to this liability. This may require us to expend substantial
resources or to discontinue certain solutions, which would negatively affect our business, financial condition and results of operations.
In addition, the increased attention focused upon liability issues as a result of lawsuits and legislative proposals could harm
our reputation or otherwise impact the growth of our business. Any costs incurred as a result of this potential liability could
harm our business and operating results.
51
Our customers' use of our products to
transmit negative messages or website links to harmful applications could damage our reputation, and we may face liability for
unauthorized, inaccurate or fraudulent information distributed via our products.
Our customers could
use our email marketing product to transmit negative messages or website links to harmful applications, reproduce and distribute
copyrighted material without permission, or report inaccurate or fraudulent data. Any such use of our products could damage our
reputation and we could face claims for damages, copyright or trademark infringement, defamation, negligence or fraud. Moreover,
our customers' promotion of their products and services through our email marketing product may not comply with federal, state
and foreign laws. We cannot predict whether our role in facilitating these activities would expose us to liability under these
laws.
Even if claims asserted
against us do not result in liability, we may incur substantial costs in investigating and defending such claims. If we are found
liable for our customers' activities, we could be required to pay fines or penalties, redesign business methods or otherwise expend
resources to remedy any damages caused by such actions and to avoid future liability.
Our existing general
liability insurance may not cover all potential claims to which we are exposed or may not be adequate to indemnify us for all liabilities
that may be imposed. Any imposition of liability that is not covered by insurance or is in excess of insurance coverage would increase
our operating losses and reduce our net worth and working capital.
We may not be able to successfully halt
the operations of websites that aggregate our data as well as data from other companies, including social networks, or copycat
websites that have misappropriated our data in the past or may misappropriate our data in the future.
From time to time,
third parties have misappropriated our data through website scraping, robots or other means and aggregated this data on their websites
with data from other companies. In addition, "copycat" websites have misappropriated data on our network and attempted
to imitate our brand or the functionality of our website. When we have become aware of such websites, we have employed technological
or legal measures in an attempt to halt their operations. However, we may not be able to detect all such websites in a timely manner
and, even if we could, technological and legal measures may be insufficient to stop their operations. In some cases, particularly
in the case of websites operating outside of the United States, our available remedies may not be adequate to protect us against
such websites. Regardless of whether we can successfully enforce our rights against these websites, any measures that we may take
could require us to expend significant financial or other resources.
We are, and may in the future be, subject
to intellectual property disputes, which are costly to defend and could harm our business and operating results.
From time to time,
we face, and we expect to face in the future, allegations that we have infringed the trademarks, copyrights, patents and other
intellectual property rights of third parties, including from our competitors or non-practicing entities. Patent and other intellectual
property litigation may be protracted and expensive, and the results are difficult to predict and may require us to stop offering
certain features, purchase licenses or modify our products and features while we develop non-infringing substitutes or may result
in significant settlement costs.
In addition, we may
use open source software in our solutions and will use open source software in the future. From time to time, we may face claims
from companies that incorporate open source software into their products, claiming ownership of, or demanding release of, the source
code, the open source software and/or derivative works that were developed using such software, or otherwise seeking to enforce
the terms of the applicable open source license. These claims could also result in litigation, require us to purchase a costly
license or require us to devote additional research and development resources to change our solutions, any of which would have
a negative effect on our business and operating results.
Although the results
of litigation and claims cannot be predicted with certainty, we do not believe that the final outcome of those matters that we
currently face will have a material adverse effect on our business. However, there can be no assurance that our expectations will
prove correct, and even if these matters do not result in litigation or are resolved in our favor or without significant cash settlements,
these matters, and the time and resources necessary to litigate or resolve them, could harm our business, our operating results
or our reputation.
52
We could incur substantial costs defending
against claims that our products infringe on the proprietary rights of others.
The scope of any intellectual
property rights that we have is uncertain and may not be sufficient to prevent infringement claims against us or claims that we
have violated the intellectual property rights of third parties. While we know of no basis for any claims of this type, the existence
of and ownership of intellectual property can be difficult to verify and we have not made an exhaustive search of all patent filings.
Competitors may have filed applications for or may have been issued patents and may obtain additional patents and proprietary rights
relating to products or processes that compete with or are related to our products and services. The scope and viability of these
patents, the extent to which we may be required to obtain licenses under these patents or under other proprietary rights and the
cost and availability of licenses are unknown, but these factors may limit our ability to market our products.
Third parties could
claim infringement by us with respect to any patents or other proprietary rights that they hold, and we cannot assure investors
that we would prevail in any such proceeding as the intellectual property status of our current and future competitors' products
is uncertain. Any infringement claim against us, whether meritorious or not, could be time-consuming, result in costly litigation
or arbitration and diversion of technical and management personnel, or require us to develop non-infringing technology or to enter
into royalty or licensing agreements.
We might not be successful
in developing or otherwise acquiring rights to non-infringing technologies. Royalty or licensing agreements, if required, may not
be available on terms acceptable to us, or at all, and could significantly harm our business and operating results. A successful
claim of infringement against us or our failure or inability to license the infringed or similar technology could require us to
pay substantial damages and could harm our business because we would not be able to continue selling our products without incurring
significant additional expense. In addition, to the extent we agree to indemnify customers or other third parties against infringement
of the intellectual property rights of others, a claim of infringement could require us to incur substantial time, effort and expense
to indemnify these customers and third parties and could disrupt or terminate their ability to use, market or sell our products.
Failure to protect or enforce our intellectual
property rights could harm our business and operating results.
We regard the protection
of our trade secrets, copyrights, trademarks, trade dress, domain names and patents as critical to our success. In particular,
we must maintain, protect and enhance the "XI United" and "Lead Revolution" brands and our numerous proprietary
names we use to market our services. We strive to protect our intellectual property rights by relying on federal, state and common
law rights, as well as contractual restrictions. We enter into confidentiality and invention assignment agreements with our employees
and contractors, and confidentiality agreements with parties with whom we conduct business in order to limit access to, and disclosure
and use of, our proprietary information. However, these contractual arrangements and the other steps we have taken to protect our
intellectual property may not prevent the misappropriation of our proprietary information or deter independent development of similar
technologies by others.
We pursue the registration
of our domain names, trademarks, and service marks in the United States. Effective trade secret, copyright, trademark, trade dress,
domain name and patent prosecution is expensive to develop and maintain, both in terms of initial and ongoing registration requirements
and the costs of defending our rights.
53
Litigation may be necessary
to enforce our intellectual property rights, protect our respective trade secrets or determine the validity and scope of proprietary
rights claimed by others. Any litigation of this nature, regardless of outcome or merit, could result in substantial costs and
diversion of management and technical resources, any of which could adversely affect our business and operating results. We may
incur significant costs in enforcing our trademarks against those who attempt to imitate our "XI United" and "Lead
Revolution" and other brands. If we fail to maintain, protect and enhance our intellectual property rights, our business and
operating results may be harmed.
We have agreed to provide indemnification
to our officers and directors.
The Company's Articles
of Incorporation provide to our officers and directors indemnification to the full extent provided by law, and provide that, to
the extent permitted by Nevada law, an officer or director will not be personally liable for monetary damages to the Company or
its shareholders for breach of his or her fiduciary duty as an officer or director, except for liability for certain actions that
may not be limited under Nevada law. These indemnification provisions may limit the ability of members to seek recourse against
our officers and directors.
Risks
Related to Our Securities, Tax Concerns And Reporting Requirements
We are subject to tax concerns.
Xhibit LLC, a Nevada
limited liability company, operates as a partnership for tax purposes and owns two operating limited liability companies originally
treated as Subchapter S companies. The acquisition by NB of Xhibit, prior issuances of units to parties not permitted to hold equity
in a Subchapter S entity, and units issued to employees for services rendered have tax ramifications which may have material adverse
tax consequences on the various companies and their equityholders. NB may be required to indemnify some of these parties for their
taxes
and
may be required to pay substantial taxes and penalties to the Internal Revenue Service and various state taxing
authorities if it is determined that taxes are due and have not been paid. As returns for the year ended December 31, 2011 have
not yet been filed it is uncertain as to the magnitude of taxes, penalties and interest.
There is a limited market for our common
stock.
Only a very limited
trading market currently exists for NB's common stock. As a result, any broker/dealer that makes a market in our stock or other
person that buys or sells our stock could have a significant influence over the stock's price at any given time. We cannot
assure our shareholders that a market for our stock will be sustained. There is no assurance that our shares will have any greater
liquidity than shares which do not trade on a public market, particularly given recent changes in legislation related to shell
companies which will further restrict the ability of our shareholders to sell their shares in the public market. In February 2008,
the Securities and Exchange Commission amended Rule 144, and now holders of shares in any company that was a shell company and
subsequently acquired business operations via merger, such as NB, are subject to a longer holding period before being eligible
to sell their shares pursuant to Rule 144.
Our stock price is likely to be volatile.
There is generally
significant volatility in the market prices and limited liquidity of securities of early stage companies, and particularly of early
stage Internet-based companies. Contributing to this volatility are various events that can affect our stock price in a positive
or negative manner. These events include, but are not limited to: governmental regulations or actions; market acceptance and sales
growth of our products; litigation involving the Company or our industry; developments or disputes concerning our patents or other
proprietary rights; departure of key personnel; future sales of our securities; fluctuations in our financial results or those
of companies that are perceived to be similar to us; swings in seasonal demands of purchasers; investors' general perception of
us; and general economic, industry and market conditions. If any of these events occur, it could cause our stock price to fall.
54
The price of our common stock may be
adversely affected by the future issuance and sale of shares of our common stock or other equity securities.
We cannot predict the
size of future issuances or sales of our common stock or other equity securities future acquisitions or capital raising activities,
or the effect, if any, that such issuances or sales may have on the market price of our common stock. The issuance and sale of
substantial amounts of common stock or other equity securities or announcement that such issuances and sales may occur, could adversely
affect the market price of our common stock. As of June 4, 2012, we had 66,583,676 outstanding shares of common stock, and no additional
shares were reserved for issuance. Any decline in the price of our common stock may encourage short sales, which could place further
downward pressure on the price of our common stock and may impair our ability to raise additional capital through the sale of equity
securities.
Our reduced stock price may adversely affect our liquidity.
Our common stock has
been trading at less than $1.00 per share periodically in the last year.  Many market makers are reluctant to make a
market in stock with a trading price of less than $1.00 per share.  To the extent that we have fewer market makers for
our common stock, our volume and liquidity will likely decline, which could further depress our stock price.
Our reporting obligations as a public
company are costly.
Operating a public
company involves substantial costs to comply with reporting obligations under federal securities laws which are continuing to increase
as provisions of the Sarbanes Oxley Act of 2002 are implemented. We may not reach sufficient size to justify our public reporting
status. If we were forced to become a private company following the Merger, then our shareholders may lose their ability to sell
their shares and there would be substantial costs associated with becoming a private company.
Following the closing
of the Merger, the Company will have very limited ability to unwind the transaction. Thus, the post-merger company will be a public,
reporting company and subject to the reporting obligations of the Securities Exchange Act of 1934, as amended, and the requirements
of the exchange or other market listing its common stock.
Our shares are "penny stock".
In general, "penny
stock" includes securities of companies which are not listed on the principal stock exchanges and have a bid price in the
market of less than $5.00; and companies with net tangible assets of less than $2 million ($5 million if the issuer has been in
continuous operation for less than three years), or which has recorded revenues of less than $6 million in the last three years.
As "penny stock," our stock therefore is subject to Rule 15g-9, which imposes additional sales practice requirements
on broker-dealers which sell such securities to persons other than established customers and "accredited investors" (generally,
individuals with net worth in excess of $1 million or annual incomes exceeding $200,000, or $300,000 together with their spouses,
or individuals who are the officers or directors of the issuer of the securities). For transactions covered by Rule 15g-9, a broker-dealer
must make a special suitability determination for the purchaser and have received the purchaser's written consent to the transaction
prior to sale. Consequently, this rule may adversely affect the ability of broker-dealers to sell our stock, and therefore may
adversely affect stockholders' ability to sell the stock in the public market.
The requirements of being a public company
may strain our resources, divert management's attention and affect our ability to attract and retain qualified board members.
As a public company,
we are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act, the Sarbanes-Oxley
Act, the Dodd-Frank Act, the listing requirements of the OTCBB and other applicable securities rules and regulations. Compliance
with these rules and regulations requires significant legal and financial compliance costs, makes some activities more difficult,
time-consuming or costly and increases demand on our systems and resources. The Exchange Act requires, among other things, that
we file annual, quarterly and current reports with respect to our business and operating results. The Sarbanes-Oxley Act requires,
among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting.
In order to maintain and, if required, improve our disclosure controls and procedures and internal control over financial reporting
to meet this standard, significant resources and management oversight may be required. As a result, management's attention may
be diverted from other business concerns, which could harm our business and operating results. Although we have already hired additional
employees to comply with these requirements, we may need to hire more employees in the future, which will increase our costs and
expenses.
55
In addition, changing
laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for public companies,
increasing legal and financial compliance costs and making some activities more time consuming. These laws, regulations and standards
are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in
practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty
regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We intend
to invest resources to comply with evolving laws, regulations and standards, and this investment may result in increased general
and administrative expenses and a diversion of management's time and attention from revenue-generating activities to compliance
activities. If our efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory
or governing bodies due to ambiguities related to practice, regulatory authorities may initiate legal proceedings against us and
our business may be harmed.
We also expect that
being a public company with these new rules and regulations will make it more expensive for us to obtain director and officer liability
insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These factors
could also make it more difficult for us to attract and retain qualified members for our Board of Directors, particularly to serve
any committees, and qualified executive officers.
As a result of disclosure
of information in filings required of a public company, our business and financial condition will become more visible, which we
believe may result in threatened or actual litigation, including by competitors and other third parties. If such claims are
successful, our business and operating results could be harmed, and even if the claims do not result in litigation or are resolved
in our favor, these claims, and the time and resources necessary to resolve them, could divert the resources of our management
and harm our business and operating results.
We will be obligated to develop and
maintain proper and effective internal controls over financial reporting.
We are required, pursuant
to Section 404 of the Sarbanes-Oxley Act, to furnish a report by management on, among other things, the effectiveness of our internal
control over financial reporting annually. This assessment will need to include disclosure of any material weaknesses identified
by our management in our internal control over financial reporting.
We may not be able
to complete our evaluation, testing and any required remediation in a timely fashion. During the evaluation and testing process,
if we identify one or more material weaknesses in our internal control over financial reporting, we will be unable to assert that
our internal controls are effective.
If we are unable to
assert that our internal control over financial reporting is effective, or if our auditors are unable to express an opinion on
the effectiveness of our internal controls, we could lose investor confidence in the accuracy and completeness of our financial
reports, which would cause the price of our common stock to decline.
56
Our CEO has control over key decision
making as a result of his control of a majority of our voting stock.
Mr. Richarde, one of
our founders, our Chairman, and our CEO, owns approximately 67% of the outstanding shares of common stock. As a result, Mr. Richarde
has the ability to control the outcome of matters submitted to our stockholders for approval, including the election of directors
and any merger, consolidation, or sale of all or substantially all of our assets. This concentrated control could delay, defer,
or prevent a change of control, merger, consolidation, or sale of all or substantially all of our assets that our stockholders
support, or conversely this concentrated control could result in the consummation of such a transaction that our other stockholders
do not support. In addition, Mr. Richarde has the ability to control the management and major strategic investments of our company
as a result of his position as our CEO and his ability to control the election or replacement of our directors. In the event of
his death, the shares of our capital stock that he owns will be transferred to the persons or entities that he designates. As a
board member and officer, Mr. Richarde 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. Richarde is entitled
to vote his shares in his own interests, which may not always be in the interests of our stockholders generally.
We have no independent directors.
The Company has no
independent directors and is governed by a Board of Directors consisting of its CEO and CFO. As a result, inherent conflicts of
interest may arise which could only be resolved by a vote of a majority of disinterested shareholders. Shareholder service agencies
and rights groups strongly encourage companies to have a majority of independent directors which increases the likelihood of better
corporate governance decisions. While the Company intends to actively recruit one to three independent directors there is no assurance
we will successfully do so.
We do not expect to pay any dividends
for the foreseeable future.
We do not anticipate
paying any dividends to our shareholders for the foreseeable future. Shareholders must be prepared to rely on sales of their common
stock after price appreciation to earn an investment return, which may never occur. Any determination to pay dividends in the future
will be made at the discretion of our Board of Directors and will depend on our results of operations, financial conditions, contractual
restrictions, restrictions imposed by applicable laws and other factors that our Board deems relevant.
ITEM 3.02 Unregistered Sales of Equity
Securities
Pursuant to the Merger,
the Registrant is issuing 55,383,452 shares of its common stock. These securities will be issued by the Registrant in reliance
upon the exemption from registration under Section 4(2) and Regulation D of the Securities Act of 1933, as amended.
Market
for Common Equity and Related Stockholder Matters; Description Of Securities
Overview
The Company's Articles
of Incorporation provide that the Company has the authority to issue 560 million shares of capital stock, which are currently divided
into two classes as follows: 480 million shares of common stock, par value of $0.0001 per share; and 80 million shares of preferred
stock, also with a par value of $0.0001 per share. Immediately prior to the Merger, and following its recent 8:1 forward stock
split, the Company had 11,200,224 shares of common stock outstanding, and no shares of preferred stock outstanding. As of May 31,
2012, and prior to the Merger, the Company had 43,810,011 Units outstanding.
57
The Common Stock
Voting.
Holders
of the common stock are entitled to one vote per share on all matters to be voted on by the Company's shareholders. The Company's
bylaws provide that a majority of the outstanding shares of the corporation entitled to vote constitute a quorum at a meeting of
the shareholders.
Dividends
. The
Company's Board of Directors, in its sole discretion, may declare and pay dividends on the common stock, payable in cash or other
consideration, out of funds legally available, if all dividends due on any preferred stock have been declared and paid. The Company
has not paid any cash dividends on its common stock and does not plan to pay any cash dividends on its common stock for the foreseeable
future.
Liquidation, Subdivision,
or Combination
. In the event of any liquidation, dissolution or winding up of the Company or upon the distribution of its assets,
all assets and funds remaining after payment in full of the Company's debts and liabilities, and after the payment to holders of
any then outstanding preferred stock of the full preferential amounts to which they were entitled, would be divided and distributed
among holders of the common stock.
Equity Compensation Plans
None.
Market Price of and Dividends on
the Registrant's Common Equity and Related Stockholder Matters
NB received a listing
on the Pink Sheets under the symbol "NBMF" in February 2007 and moved to the OTC Bulletin Board in August 2007. To date,
NB stock has been thinly traded.
On March 1, 2012, NB
effectuated a forward split of its issued and outstanding common shares, whereby every old share of common stock will be exchanged
for eight new shares of NB's common stock. As a result, the issued and outstanding shares of common stock increased from 1,400,028
prior to the split to 11,200,224 following the forward split. In connection with the stock split NB also increased the number of
its authorized shares of common stock from 60,000,000 shares to 480,000,000 shares and its preferred stock from 10,000,000 to 80,000,000
shares.
The following table
sets forth, for the calendar periods indicated, the range of the high and low last reported bid prices of NB common stock, as reported
by the OTC Bulletin Board.  The quotations represent inter-dealer prices without retail mark-ups, mark-downs or commissions,
and may not necessarily represent actual transactions.  The quotations may be rounded for presentation. There is an absence
of an established trading market for NB's common stock, as the market is limited, sporadic and highly volatile, which may affect
the prices listed below.
2012
High Bid
Low Bid
First Quarter 1-1-12 to 3-31-12
$
3.85
$
0.25
2011
High Bid
Low Bid
Fourth Quarter 10-1-11 to 12-31-11
$
0.02
$
0.25
Third Quarter 7-1-11 to 9-30-11
$
0.02
$
0.09
Second Quarter 4-1-11 to 6-30-11
$
0.04
$
0.04
First Quarter 1-1-11 to 3-31-11
$
0.01
$
0.03
58
2010
High Bid
Low Bid
Fourth Quarter 10-1-10 to 12-31-10
$
0.03
$
0.03
Third Quarter 7-1-10 to 9-30-10
$
0.03
$
0.03
Second Quarter 4-1-10 to 6-30-10
$
0.03
$
0.03
First Quarter 1-1-10 to 3-31-10
$
N/A
$
N/A
* N/A indicates no recorded trading activity during the period presented.
There is limited trading
activity in NB's securities, and there can be no assurance a regular trading market for our common stock will be sustained. On
June 4, 2012, the closing price per share of NB common stock on the OTC Bulletin Board was $2.50.
The last trading day
before the Merger was announced was July 18, 2011. On that date the closing price for NB shares on the OTC Bulletin Board was N/A
as the stock had not been traded. NB has never paid cash dividends on its capital stock. NB currently intends to retain all earnings,
if any, to finance the growth and development of its business. NB does not anticipate paying any cash dividends in the foreseeable
future. As of May 31, 2012, NB had approximately 117 shareholders of record, exclusive of shares held in street name.
Recent Sales of Unregistered
Securities
None by the Registrant,
other than the securities issued pursuant to the Merger.
On formation, Xhibit
issued 10 Units to two of its founders, and 814,800 Units to a third founder. In August 2011, Xhibit issued 26,345,200 Units to
two of its founders in exchange for the contribution of their equity in Stacked Digital, LLC, SpyFire Interactive, LLC, and Hrizzo,
LLC. Subsequent to this exchange, Hrizzo, LLC was returned to one of the founders in exchange for cancellation of 7,578,411 units.
In August through October
2011, Xhibit issued 1,050,000 Units to three accredited investors in exchange for cash of $875,000.
In November 2011, Xhibit
issued 1,747,882 Units to three employees in exchange for services rendered.
In May 2012, Xhibit
issued 21,905,000 Units to the 11 former members of Social Bounce LLC upon Xhibit's acquisition of Social Bounce LLC.
All of the above securities
were issued in reliance upon the exemption from registration under Section 4(2) and/or Regulation D of the Securities Act of 1933,
as amended.
Item 4.01. Changes in Registrant's Certifying
Accountant
On June 4, 2012, the
Board of Directors of the Company dismissed Weaver Martin & Samyn, LLC ("WM&S"), the registered independent public
accounting firm for the Company, as the Company's independent auditors effective immediately. The dismissal of WM&S was a result
of the Company's acquisition of Xhibit as the Company's wholly owned operating subsidiary.
59
In connection with
the audit of the Company's financial statements for the fiscal years ended December 31, 2011 and 2010, and through June 4, 2012,
there were no disagreements between the Company and WM&S on any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which if not resolved to WM&S's satisfaction, would have caused WM&S to make
reference the subject matter of the disagreement in connection with its audit reports on the Company's financial statements. None
of the reportable events set forth in Item 304(a)(1)(iv) or (v) of Regulation S-K occurred during the period in which WM&S
served as the Company's independent registered public accounting firm.
The audit reports of
WM&S on the Company's financial statements as of and for the fiscal years ended December 31, 2011 and 2010 did not contain
an adverse opinion or disclaimer of opinion, however, each of the audit reports was modified to note that the significant net losses
incurred raised substantial doubt about the Company's ability to continue as a going concern and that the financial statements
for each of those fiscal years did not include adjustments that might result from the outcome of those uncertainties.
The Company provided
WM&S a copy of this report prior to its filing with the Securities and Exchange Commission and requested that WM&S furnish
a letter addressed to the Securities and Exchange Commission stating whether WM&S agrees with the statements made in this Item
4.01. A copy of the letter is filed as an exhibit to this Form 8-K.
On June 4, 2012, the
Board of Directors of the Company approved the engagement of Farber Hass Hurley LLP ("FHH") to serve as the Company's
independent registered public accounting firm for the Company's fiscal year ending December 31, 2012. The decision to change the
Company's independent registered public accounting firm was the result of the Board of Directors' determination that it was in
the best interests of the Company following the Company's acquisition of Xhibit as the Company's wholly owned operating subsidiary,
as FHH has been serving as Xhibit's auditor.
Prior to June 4, 2012,
the date that FHH was retained as the independent registered public accounting firm of the Company:
(1) The Company did
not consult FHH regarding either the application of accounting principles to a specified transaction, either completed or proposed,
or the type of audit opinion that might be rendered on the Company's financial statements;
(2) Neither a written
report nor oral advice was provided to the Company by FHH that they concluded was an important factor considered by the Company
in reaching a decision as to the accounting, auditing or financial reporting issue; and
(3) The Company did
not consult FHH regarding any matter that was either the subject of a "disagreement" (as defined in Item 304(a)(1)(iv)
of Regulation S-K and the related instructions) or any of the reportable events set forth in Item 304(a)(1)(v) of Regulation S-K.
ITEM 5.01 Changes in Control of Registrant
Following the Merger,
the holders of all of the common stock of NB before the Merger only own 16.8% of the common stock of the Company. The former holders
of Units in Xhibit now own 83.2% of the common stock of the Company.
ITEM 5.02 Departure of Directors or
Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
In conjunction with
the Merger, and effective as of June 4, 2012 (the effective date of the Merger), Derold Kelley resigned from his positions as Chief
Executive Officer, Chief Financial Officer, President and sole director of the Registrant.
Effective as of June
4, 2012, Chris Richarde and Michael J. Schifsky were appointed as directors by the resigning sole director. The Board has not yet
determined on which Board committees these two directors will serve, although it expects to do so at its next scheduled meeting
after the Board establishes which committees the Company will form. Further information about the new Board members may be found
below.
60
Effective as of June
4, 2012, Chris Richarde was appointed as Chief Executive Officer and President of the Registrant and Michael J. Schifsky was appointed
as Chief Financial Officer and Treasurer of the Company. Also effective June 4, 2012, the Board determined that Dzenis Softic,
Xhibit's CTO, and Darin Toone, Xhibit's COO, should be considered executive officers of the Registrant. The Registrant has entered
into employment agreements with Mr. Richarde and Mr. Schifsky, and Mr. Softic and Mr. Toone have employment agreements with Xhibit.
Further information about these officers may be found below.
The Company's directors,
as named above, will serve until the next annual meeting of the Company's shareholders or until their successors are duly elected
and have qualified. Directors will be elected for one-year terms at the annual shareholders meeting. There is no arrangement or
understanding between any of the directors or officers of the Company and any other person pursuant to which any director or officer
was or is to be selected as a director or officer, and there is no arrangement, plan or understanding as to whether non-management
shareholders will exercise their voting rights to continue to elect the current directors to the Company's board. There are also
no arrangements, agreements or understandings between non-management shareholders that may directly or indirectly participate in
or influence the management of the Company's affairs.
There are no agreements
or understandings for any officer or director to resign at the request of another person, and none of the officers or directors
is acting on behalf of, or will act at the direction of, any other person. There are no family relationships among our executive
officers and directors.
Management
NB's management and
directors and their respective ages as of the date of this report are set forth in the table below. Also provided is a brief description
of the experience of each director and officer during the past five years and directorships (if any) held by each director in other
companies.
Name
Age
Position
Term of Office*
Chris Richarde
28
CEO, Chairman
Annual
Michael J. Schifsky
51
CFO, Director
Annual
Dzenis Softic
32
CTO, Xhibit
Darin Toone
42
COO, Xhibit
*  For directors
only
Chris Richarde
was the co-founder and has served as the Chief Executive Officer of Xhibit LLC since July 2011. Mr. Richarde has over 13 years
of industry experience in the field of internet marketing. In 2005, Mr. Richarde founded and from 2005, he has served as CEO of
SpyFire Interactive, LLC, a results-based digital marketing and advertising agency. In April 2010, Mr. Richarde co-founded Stacked
Digital, LLC, an online email marketing and lead generation company. Both SpyFire and Stacked Digital were acquired by Xhibit in
August 2011. Mr. Richarde brings his perspective and experience as Xhibit's co-founder and CEO to his proposed service on the Board
of Directors. In 2003, Mr. Richarde pled guilty to two counts of felony reckless driving in Washoe County, Nevada, stemming from
a vehicular crash in June 2002 when the vehicle he was driving went out of control and crashed into a tree, resulting in the death
of one person and substantial bodily harm to two others. At the scene of the car accident, Mr. Richarde had his blood drawn
and no alcohol was found in his system. Mr. Richarde was sentenced to five years probation, of which one year was served under
house arrest, and restitution. A related civil suit was settled in March 2012, as well.
61
Michael Schifsky
has been the Chief Financial Officer of Xhibit LLC since July 2011. Mr. Schifsky has over 25 years of financial and operational
management experience. His background includes executive roles in organizations ranging from large established public companies
to small and mid-sized rapid growth enterprises where he gained critical experience in leadership, organizational development,
capital formation, mergers and acquisitions, SEC reporting, and corporate governance. Mr. Schifsky played a key role in the early
phase of successful acquisition program that propelled Airgas, Inc. from a $200 million company to what is today a highly successful
$4.5 billion NYSE traded industrial gas distributor.
From September 2009
to July 2011, Mr. Schifsky served as Chief Financial Officer of Millennium Energy Group, an early stage high tech energy storage
solutions provider for the alternative energy and telecom industries. From April 2008 to August 2009, he served as interim Chief
Financial Officer for MD Helicopters, a manufacturer of light and medium duty helicopters. From December 2006 to April 2008, he
served as Chief Financial Officer for Clear Choice Financial, a full service mortgage company. From April 2004 to December 2006,
Mr. Schifsky was an independent consultant providing financial advisory and consulting services to such notable companies as American
Express, Apollo Group, Amcor Ltd, and American Skiing Company.
From July 2010 to August
2011, Mr. Schifsky served on the Board of Directors of Big Bear Mining Corp., a U.S. based mineral exploration company. Mr. Schifsky
began his career in Philadelphia office of Ernst and Young, an international public accounting firm where he earned his CPA. He
holds a B.S. in accountancy from Villanova University. Mr. Schifsky brings extensive financial and operational management experience
to his proposed service on the Board of Directors.
Dzenis Softic
has been Xhibit's Chief Technology Officer since October 2011 and is responsible for all product and software development efforts
for the Company. Mr. Softic is a successful Internet technology entrepreneur with over 12 years of relevant industry experience.
In 2003 Mr. Softic founded and served as CEO of VoloMP, an email marketing and software company, until he sold the company to Ybrant
in 2006. In 2006, Mr. Softic founded ABC Internet Media, an email marketing and technology company, and served as CEO until 2009
and remains the sole owner as of the date of this filing. From 2009 to 2010, Mr. Softic was the Chief Technology Officer for JumpOnIt.com,
a daily coupon site for the Australian market, where he managed a team of accomplished developers and built a highly successful
daily coupon site from the ground up. In November 2010 LivingSocial bought a $5 million controlling equity position in JumpOnIt.com,
which made Living Social the largest social shopping player in Australia. In 2010, Mr. Softic returned to VoloMP as Chief Operating
Officer to drive increased market share and profitability, until he joined Xhibit in 2011.
Darin E. Toone
has served as COO for Xhibit since September 2011 and plays an important role in developing advertiser relationships for Xhibit.
Prior to joining Xhibit, Mr. Toone was an Internet media entrepreneur cofounding several Internet media and product development
companies where he began marketing his own products and services online by developing direct response marketing campaigns. From
2004 to 2010 Mr. Toone served as Co-Founder and CEO of Producer Media LLC and Stage 6 Media LLC, companies that provided online
business tools for at-home and small business owners. In 2008 through September 2011, Mr. Toone began developing products and services
in the diet and fitness vertical market and served as Vice President and Cofounder of OZone Holdings, LLC and WAT Works, LLC. OZone
Holdings is an online fitness company known for providing results oriented 20-minute daily workout programs delivered to its online
community through OZone's innovative online portal. WAT Works was the marketing arm for OZone that developed marketing channels
for online sales of diet and fitness products. Mr. Toone holds a BS degree in Behavioral Science and Health from the University
of Utah.
62
Significant Employees
Certain significant
employees of Xhibit and its subsidiaries and their respective ages as of the date of this report are set forth in the table below.
Also provided is a brief description of the experience of each significant employee during the past five years.
Name
Age
Position and Company
Steven Hubbard
29
Director of Business Development, Xhibit
Viet Le
29
Director of Interactive Development, Xhibit
Mirco Pasqulaini
36
Digital Creative Architect, Xhibit
Viet D. Le
has served as Xhibit's
President of Web Development since January 2012. Prior to joining Xhibit, Mr. Le founded HEYVIET Interactive, a Detroit-based digital
boutique agency, and served as its President from 2008 to 2011. Mr. Le utilized his hybrid of strong creative and development skill-sets
to build and manage a local team of talent to create websites, apps, motion graphics and rich media for worldwide advertising agencies
such as: Doner, MRM Worldwide, Campbell Ewald and Sarkissian Mason. Mr. Le was responsible for creating out-of-the box interactive
concepts, managing client expectations, and executing development with the highest level of standards. Prior to founding HEYVIET,
Mr. Le held a senior creative position at Doner Advertising from 2006 to 2008 and was responsible for executing the interactive
creative process from start to finish. Doner later became a HEYVIET client in 2008.
Steven S. Hubbard
is one of Xhibit's
co-founders and has served as the Director of Business Development since August 2011. Prior to joining Xhibit, from 2007 to 2010,
Mr. Hubbard was the Director of Business Development for The Grid Records, a provider of production and publishing services to
many of the world's leading entertainment brands, where he established strategic marketing partnerships with major celebrities
and athletes. Also, during his tenure at The Grid Records, in 2008 Mr. Hubbard co-founded The Grid Productions
,
a
music publisher,
where he served as Director of Business until 2011. At The Grid Productions, Mr. Hubbard successfully
assembled a group of investors, secured publishing assets and structured numerous licensing partnerships with major music labels,
film studios and television studios. Mr. Hubbard holds a BS in Business and Communications from Arizona State University. While
at Arizona State University, Mr. Hubbard studied marketing, e-commerce, and entrepreneurship.
Mirco Pasqualini
has been the Creative
Digital Architect of Xhibit's digital marketing and social influence platforms since October 2011. Prior to joining Xhibit, from
2010 to 2011, Mr. Pasqualini served as the Interactive Experience and Creative Director for the award winning Mobile & Emerging
Platforms Group of R/GA, an international digital advertising agency. From 2009 to 2010, Mr. Pasqualini served as Creative Director
for Arc Worldwide in Turin, Italy designing innovative digital products for globally recognized brands such as Nike, MasterCard,
The Wall Street Journal, Fiat and Chrysler. From 2003 to 2008, Mr. Pasqualini was a freelance consultant providing design and implementation
services for digital interactive projects to various high profile clients.
During his 13 years of industry experience,
Mr. Pasqualini has received numerous industry awards including the Cannes Lions and has been featured in prominent digital communication
publications such as Communication Arts magazine and Creative magazine for his pioneering work in redefining the future of the
mobile social experience and interactive television on the web.
Mr. Pasqualini received a Certificate of
Business Technology from the Instituto Tecnico Commerciale in Venice, Italy where his research and studies concentrated on information
technology systems and business management.
63
Executive Compensation
The following summary compensation table
sets forth information concerning compensation for services rendered in all capacities during Xhibit's past two fiscal years awarded
to, earned by or paid to each of the following individuals by Xhibit or its subsidiaries. Salary and other compensation for these
officers, employees and former officers are set by Xhibit's Manager, except for employee compensation which is set by officers
of Xhibit.
Summary Compensation Table
Nonqualified
Non-equity
deferred
Stock
Option
incentive plan
compensation
All other
Salary
Bonus
awards
awards
compensation
earnings
compensation
Total
Name and principal position
Year
($)
($)
($)
($)
($)
($)
($)(1)
($)
Chris Richarde,
2011
131,650
-
-
-
-
-
1,400,914
1,532,564
CEO of Xhibit LLC
2010
85,250
-
-
-
-
-
854,891
940,141
Dzenis Softic
2011
-
-
1,318.384
-
-
-
-
1,318,384
Chief Technology Officer of Xhibit LLC
-
-
-
-
-
-
-
-
Jason Hrissikopoulos,
2011
120,000
-
-
-
-
-
560,377
680,377
President of Stacked Digital, LLC
2010
60,000
-
-
-
-
-
221,881
281,881
Rich Tarjeft
2011
-
-
125,000
-
-
-
-
125,000
Director of Publisher Relations of SpyFire Interactive, LLC
-
-
-
-
-
-
-
(1)
Consists of distributions received as a result of the listed individual's ownership of equity in
Xhibit, and not as compensation.
Employment Agreements
NB has entered into
at-will employment agreements with its new CEO, Chris Richarde, and its new CFO, Michael Schifsky, effective as of the closing
of the Merger. Mr. Richarde's base salary is $350,000 annually, and Mr. Schifsky's is $204,000 annually. Both Mr. Richarde and
Mr. Schifsky have no severance arrangements and are eligible for an annual bonus to be established in the future by the Board.
Darin Toone serves
as Xhibit's Chief Operating Officer under an at-will employment agreement with a base salary of $210,000 per year.
Dzenis Softic serves
as Xhibit's Chief Technology Officer under an at-will employment agreement with a base salary of $4,800 per year. Mr. Softic was
granted 1,582,060 Units in Xhibit as an incentive to receive the nominal salary he is paid and for transfer of certain intellectual
property.
Director Compensation
As both of our directors
are also officers, they do not receive any additional compensation for their service on this Board.
Compensation Committee Interlocks
and Insider Participation
As a smaller reporting company, the Company
is not required to provide this disclosure.
Securities Ownership of Certain
Beneficial Owners and Management
The following table
sets forth certain information regarding the beneficial ownership of the Company's common stock as of June 4, 2012 for (a) each
person known by the Company to be a beneficial owner of five percent or more of the outstanding common stock of the Company, (b)
each named executive officer, director and nominee for director of the Company, and (c) all directors and named executive officers
of the Company as a group. As of June 4, 2012, the Company had 66,583,676 shares of common stock and no shares of preferred stock
outstanding.
64
COMMON STOCK SHARE OWNERSHIP AS OF JUNE
4, 2012
Name and Address of
Beneficial Owner
(1)
Amount of
Common Shares
Owned
Options or
Warrants
Exercisable
Within 60 Days
of June 4, 2012
Total Common
Shares
Beneficially
Owned
Percent of
Common
Shares
Owned
(2)
Chris Richarde, CEO
44,440,064
-
44,440,064
66.74
%
Michael Schifsky, CFO
1,214,173
-
1,214,173
1.82
%
Dzenis Softic, CTO
2,000,000
-
2,000,000
3.00
%
Darin Toone, COO
700,000
-
700,000
1.05
%
All Officers and Directors as a group (4 persons)
48,354,237
-
48,354,237
72.62
%
(1)
Except as otherwise
noted, the address for each of these individuals is c/o Xhibit, LLC, 80 E. Rio Salado Parkway, Suite 115, Tempe, AZ 85281.
(2)
Percentage ownership
is based on 66,583,676 shares of Common Stock outstanding on June 4, 2012.
Certain Relationships and Related
Transactions
A
promissory note in the amount of $333,516.16 dated as of August 9, 2011 payable to Chris Richarde was paid in full as of April
10, 2012. Approximately $111,000 of this amount was forgiven in exchange for personal expenses not reimbursable by the Company.
The
Unit Exchange Agreement by and between Xhibit LLC, Hrizzo, LLC, SpyFire Interactive, LLC, and Stacked Digital, LLC dated August
8, 2011 allocated units to Chris Richarde and Jason Hrissikopoulos based on this respective ownership of the Companies acquired
by Xhibit LLC. Later, Mr. Hrissikopoulos agreed to take back Hrizzo, LLC and reduce the number of units allocated to him in exchange
for the cancellation of a substantial part of the units originally issued to him and cancellation of a promissory note as well.
Mr. Richarde was later issued additional units in exchange for the transfer of Social Bounce, LLC to the Company. None of these
transfers was reviewed by or subject to a fairness opinion from an independent investment banker or any other party but were instead
determined by the parties themselves. There is no assurance that an independent valuation may not have allocated the units differently.
Inherent conflicts of interest may have impacted the determination of how the units were valued.
ABC
Internet Media, a firm which provides software services and programming located in Bosnia owned by Dzenis Softic, Xhibit's
CTO, has been paid over $120,000 for services rendered to it over the past year. Management plans to retain several of these employees
full time in its software developers division in Bosnia once the subsidiary is incorporated there. However, until this transition
is complete the Company may be paying substantial amounts to this company.
The Company has also
entered into two promissory notes: one in the amount of $500,000 with a member of Xhibit who is also the father of an employee
and
the second in the amount of $200,000 with a member of Xhibit, each due in September 2012 paying simple interest of 10%.
65
Director
Independence
Using the standards
of the NYSE Amex, which the Company is not subject to, the Company's Board has determined that no director qualifies under such
standards as an independent director. The Company did not consider any relationship or transaction between itself and its directors
not already disclosed in this report in making this determination.
Indemnification of Directors
and Officers
The Company's Articles
of Incorporation provides to directors and officers indemnification to the full extent provided by law, and provide that, to the
extent permitted by Nevada law, a director will not be personally liable for monetary damages to the Company or its shareholders
for breach of his or her fiduciary duty as a director, except for liability for certain actions that may not be limited under Nevada
law.
Insofar as indemnification
for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons pursuant
to the foregoing provisions, or otherwise, in the opinion of the Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable.
Item 5.06.   Change in Shell Company Status
The information set
forth in Item 2.01 of this Current Report on Form 8-K is incorporated into this Item 5.06 in its entirety by reference.
ITEM 8.01
Other Events
As a result of the
Merger, the Registrant has moved its principal executive offices to 80 E. Rio Salado Parkway, Suite 115, Tempe, AZ 85281.
On June 6, 2012, the
Company issued a press release announcing the closing of the Merger. A copy of the Company's press release is attached hereto as
Exhibit 99.1 and incorporated therein by this reference.
ITEM 9.01 Exhibits
(a)
Financial
Statements of Business Acquired
Audited Financial Statements
of Xhibit, LLC for the years ended December 31, 2011 and 2010, filed herewith
Reviewed Financial Statement
of Xhibit, LLC for the quarters ended March 31, 2012 and 2011, filed herewith.
(b)
Pro Forma
Financial Information
Filed herewith.
66
(c)
Exhibits
2.1     Merger Agreement dated
as of April 23, 2012, by and among NB Manufacturing, Inc., NB Manufacturing Subsidiary, LLC, Xhibit, LLC and a certain director
and officer of NB, incorporated by reference to the Form 8-K filed on April 18, 2012.
2.2     Amendment to Merger Agreement
dated as of May 23, 2012 by and among NB Manufacturing, Inc., NB Manufacturing Subsidiary, LLC, Xhibit LLC, and a certain director
and officer of NB, filed herewith.
2.3     Articles of Merger, filed
with the Nevada Secretary of State on June 4, 2012, filed herewith.
10.1   List Management Agreement
between SpyFire Interactive LLC and AdCafe LLC dated August 6, 2012, filed herewith.
10.2   Exclusivity Agreement
between SpyFire Interactive LLC and Education Success dba AdCafe dated June 24, 2011, filed herewith.
10.3   Insertion Order Standard
Terms and Conditions between SpyFire Interactive and AdCafe, LLC dated June 24, 2011, filed herewith.
10.4   Unit Exchange Agreement
dated August 9, 2011, by and among Xhibit, LLC, Hrizzo, LLC Spyfire Interactive, LLC and Stacked Digital, LLC, filed herewith.
10.5   Settlement Agreement between
Xhibit, LLC and Jason Hrissikopoulos dated January 4, 2012, filed herewith.
10.6   Amendment #1 to Settlement
Agreement between Xhibit, LLC and Jason Hrissikopoulos dated January 17, 2012, filed herewith.
10.7   Promissory Note of Xhibit
LLC payable to Paul Hrissikopoulos dated March 27, 2012, filed herewith.
10.8   Promissory Note of Xhibit
LLC payable to Larry Eiteljorg dated May 29, 2012, filed herewith.
16.1   Letter from Weaver Martin
& Samyn, LLC dated June 4, 2012, filed herewith.
23.1   Consent of Farber Hass
Hurley LLP dated June 5, 2012, filed herewith.
99.1   Press release of NB Manufacturing,
Inc. dated June 7, 2012, filed herewith.
67
SIGNATURES
Pursuant to the requirements
of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
Dated: June 6, 2012
NB Manufacturing, Inc., a Nevada corporation
By:
/s/ Chris Richarde
Chris Richarde, CEO
By:
/s/ Michael Schifsky
Michael Schifsky, CFO
68
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
To the Members
Xhibit, LLC
We have audited the accompanying consolidated
balance sheet of Xhibit, LLC (the "Company"), as of December 31, 2011, and the related consolidated statements of income,
members' equity and cash flows for the year then ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit
in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.
The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.
Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's
internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred
to above present fairly, in all material respects, the financial position of Xhibit, LLC, as of December 31, 2011, and the results
of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the
United States of America.
/s/ Farber Hass Hurley LLP
Camarillo, California
May 17, 2012
XHIBIT, LLC
CONSOLIDATED STATEMENT OF OPERATIONS
Year Ended December 31, 2011
2011
Revenues
$
6,351,384
Cost of revenues
3,760,553
Gross profit
2,590,831
Operating expenses:
Sales and marketing
388,589
General and administrative
2,481,846
Research and development
49,820
Total operating expenses
2,920,255
Loss from operations
(329,424
)
Interest expense
6,579
Net Loss
$
(336,003
)
The accompanying notes are an integral
part of these financial statements.
XHIBIT, LLC
CONSOLIDATED BALANCE SHEET
December 31, 2011
2011
Assets
Current Assets:
Cash
$
241,077
Accounts receivable, net
606,203
Prepaid expenses
197,297
Accounts receivable, related party
8,750
Total current assets
1,053,327
Other Assets
Security deposit
32,731
Property and equipment, net
31,036
Total Assets
$
1,117,094
Liabilities and Members' Equity
Current Liabilities:
Accounts payable and accrued expenses
$
357,890
Accounts payable, related parties
14,820
Accrued interest, related party
6,579
Note payable, related party
225,665
Total current liabilities
604,954
Other liabilities
12,759
Members' Equity
499,381
Total Liabilities and Members' Equity
$
1,117,094
The accompanying notes are an integral
part of these financial statements.
XHIBIT, LLC
CONSOLIDATED STATEMENT OF CASH
FLOWS
Year Ended December 31, 2011
2011
Cash flows from operating activities:
Net loss
$
(336,003
)
Depreciation
3,498
Stock-based compensation
1,456,568
Adjustments to reconcile net loss to net cash provided by operating activities:
Accounts receivable
(398,587
)
Prepaid expenses
(172,297
)
Other assets
(32,731
)
Accounts receivable, related party
(8,750
)
Accounts payable and accrued expenses
358,991
Accounts payable, related parties
14,820
Other liabilities
12,759
Net cash provided by (used in) operating activities
898,268
Cash flows from investing activities:
Purchases of property and equipment
(31,949
)
Net cash provided by (used in) investing activities
(31,949
)
Cash flows from financing activities:
Net proceeds from note payable
225,665
Member capital contribution
1,180,748
Distributions to members
(2,128,288
)
Net cash provided by (used in) financing activities
(721,875
)
-
Net increase in cash
144,444
Cash, beginning of year
96,633
Cash, end of year
$
241,077
Supplemental disclosure of Non-Cash Investing Actvity:
Acquisition of Spyfire Interactive, LLC with units
$
249,517
Acquisition of Stacked Digital, LLC with units
$
56,920
Cash paid for:
Interest
-
The accompanying notes are an integral
part of these financial statements.
XHIBIT, LLC
CONSOLIDATED STATEMENT OF MEMBERS'
EQUITY
Members'
Equity
Balance - December 31, 2010
$
326,356
Contributions from members
1,180,748
Units issued for noncash compensation
1,456,568
Distribution to member
(2,128,288
)
Net loss
(336,003
)
Balance - December 31, 2011
$
499,381
The accompanying notes are an integral
part of these financial statements.,
XHIBIT, LLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2011
NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Organization and Description of Business
Xhibit, LLC ("Xhibit" or "the Company")
was organized on July 18, 2011 as a Nevada limited liability company. On August 9, 2011 Xhibit entered into a Unit Exchange Agreement
whereby the members of of SpyFire Interactive, LLC ("SpyFire") and Stacked Digital, LLC ("Stacked") exchanged
100% of their membership units for 18,292,319 of the Company's units. Concurrent with this transaction, SpyFire and Stacked
became wholly-owned subsidiaries of the Company. There is common ownership and management among all three companies. The Company,
through its subsidiaries, is an online marketing and advertising company providing targeted and measurable online advertising campaigns
and programs for a broad base of advertisers and advertising agency customers. The Company enables marketers to advertise and sell
their products and services through major online marketing channels including display advertising and affiliate marketing networks.
Basis of Presentation and Consolidation
The consolidated financial statements have been prepared on
an accrual basis of accounting. This basis of accounting recognizes revenues when earned and expenses when incurred and conforms
with U.S. generally accepted accounting principles (GAAP). The consolidated financial statements include the accounts of the Company
and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated. The consolidated financial
statements for 2011 represent the operations of Xhibit since inception and SpyFire and Stacked since January 1, 2011. See Notes
7 and 8.
Use of Estimates
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires management to make estimates and assumptions that affect
the amounts reported in the financial statements and accompanying notes. These estimates are based on management's knowledge
about current events and expectations about actions we may undertake in the future. Actual results could differ from those estimates.
Concentrations and Credit Risk
Financial instruments that potentially subject the Company to
significant concentration of credit risk consist primarily of cash and accounts receivable. All cash balances are maintained in
a single bank and may from time to time exceed Federal Deposit Insurance Corporation ("FDIC") insurance limits. Regarding
trade accounts receivable, the Company minimizes its credit risk by performing credit evaluations of its customers and or limiting the amount of credit
extended. Accounts receivable balances are carried net of any allowances for doubtful accounts.
XHIBIT, LLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2011
NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (Continued)
Concentrations and Credit Risk (Continued)
Two customers in 2011 represented approximately 57% (46% and
11%) of total revenues. The accounts receivable from four customers were approximately 76% (29%, 19%, 15% and 13%) of total accounts
receivable as of December 31, 2011. No other customers represented greater than 10% of total revenues in 2011 or total accounts
receivable at December 31, 2011.
Financial Instruments
The carrying value of the Company's financial instruments,
including cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and note payable approximate fair
value because of the short maturities of those instruments.
Cash and Cash Equivalents
For purposes of the consolidated statement of cash flows, the
Company considers all short-term investments with original maturity of three months or less to be cash equivalents.
Accounts Receivable and Allowance for Doubtful Accounts
The Company carries its accounts receivable at cost, less an
allowance for doubtful accounts. On a period basis, management evaluates accounts receivable balances and establishes an allowance
for doubtful accounts based on history of past write-offs, collections and current credit considerations. Interest is not accrued
on overdue receivables nor is collateral obtained on any amounts due.
Management determined that the allowance for doubtful accounts
was $0 at December 31, 2011.
Prepaid Expenses
Prepaid expenses represent primarily prepaid rent for 2012.
See Note 4.
XHIBIT, LLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2011
NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (Continued)
Computers and Office Equipment
Computers and office equipment are carried at cost, less accumulated
depreciation. Maintenance and repairs are expensed as incurred. Depreciation is computed using the straight-line method over the
estimated useful lives of the assets. The estimated useful lives for computers office equipment are three and five years, respectively.
Revenue Recognition
The Company recognizes revenue when the following criteria have
been met: persuasive evidence of an arrangement exists, no significant Company obligations remain, collection of the related receivable
is reasonably assured, and the fees are fixed or determinable. The Company recognizes revenue at the time services are performed
and sales are generated on behalf of their customers. Revenue is presented net of discounts and allowances.
Advertising
Advertising costs are expensed as incurred. Such expenses for
the year ended December 31, 2011 were $271,856.
Research and Development Costs
Research and development costs are expensed as incurred. Research
and development expenses were $49,820 for the year ended December 31, 2011. See Note 6.
Stock-Based Compensation
The Company grants units for services and recognizes compensation
expense on the value of the services or value of the units issued, whichever is more readily determinable.
Income Taxes
The Company is a limited liability company, and therefore is
not subject to income tax, as any income or loss is allocated to and included in the personal income tax return of its members.
Accordingly, no provision is made for income taxes in the financial statements.
XHIBIT, LLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2011
NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (Continued)
Segment Reporting
The Company operates in one segment, internet marketing. All
revenues and operations are within the United States.
New Accounting Standards
There were no recently issued accounting standards that are
expected to have a material impact on the financial statements of the Company.
NOTE 2 - PROPERTY AND EQUIPMENT
Property and equipment balance as of December 31, 2011 is as
follows:
Computers and Office Equipment
$
40,295
Accumulated Depreciation
(8,811
)
Total
$
31,484
Depreciation expense for the year ended December 31, 2011 was
$3,498.
NOTE 3 – NOTE PAYABLE RELATED PARTY
On August 9, 2011 the Company issued a promissory note in the
amount of $333,516 to one of its members. The note carries a simple interest rate of 5% per annum and was due and payable on September
30, 2011. The maturity date on the balance due at December 31, 2011 ($225,665) was extended to June 30, 2012. On April 10, 2012,
the Note along with all accrued interest was paid in full.
XHIBIT, LLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2011
NOTE 4 – COMMITMENTS AND CONTINGENCIES
On November 9, 2011 the Company entered into a lease agreement
for corporate office space in Tempe, Arizona. Under the terms of the agreement, the Company made a payment of $250,000 in 2011
for prepaid rent to be applied to the first (9) nine months' rent beginning with the commencement date of June 1, 2012. Future
minimum lease payments as of December 31, 2011 for the next five years and thereafter are as follows:
Year ending December 31,
Amount
2012
$
125,022
2013
347,183
2014
368,923
2015
400,545
2016
432,167
Thereafter
668,015
Total
$
2,341,855
NOTE 5 - MEMBERSHIP INTERESTS
As specified in the Company's limited liability company
agreement, the Company is authorized to issue additional units as need. Each unit represents a pro rata ownership interest in the
Company's profit, losses and distributions. Prior to the acquisition by the Company, the founders of Spyfire and Stacked
contributed $298,748 and $7,500, respectively, to equity.
On August 9, 2011, the Company issued 814,810 units to three
individuals in connection with the formation of the Company. These units have been recorded as Founders' units of the Company.
On August 24, 2011, the Company issued 300,000 units in exchange
for $250,000. In October 2011, the Company issued 750,000 units in exchange for $625,000.
On November 17, 2011, the Company issued 1,747,882 units to
employees for services rendered. The units had a fair market value of $1,456,568 on the date of issuance. As such, the Company
has included this amount as non-cash compensation expense in the statement of income for the year ended December 31, 2011.
As of December 31, 2011, the Company had 21,905,011 membership
units issued and outstanding held by ten individuals.
XHIBIT, LLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2011
NOTE 6 – RELATED PARTY TRANSACTIONS
During 2011, the Company paid Hrizzo, LLC ("Hrizzo")
$1,250 for certain customer data lists and advanced the company $8,750 for general working capital. Hrizzo is owned 100% one of
the Company's members. Also during 2011, the Company paid $49,820 to a software development company that is owned by its
Chief Technology Officer.
NOTE 7 – ACQUISITION OF SPYFIRE, LLC AND STACKED DIGITAL,
LLC
On August 9, 2011, the Company completed its acquisition of
SpyFire and Stacked. The Company issued 15,251,941 Company units for the acquisition of SpyFire and 3,040,378 Company units for
the acquisition of Stacked. Due to the common ownership between SpyFire and Stacked (the acquired companies) the assets and liabilities
have been recorded at their historical cost basis as of the acquisition date. Below is a summary of the net assets acquired for
each company:
SPYFIRE
Cash
$
57,071
Accounts Receivable
227,289
Property and Equipment
5,144
Other Assets
4,973
294,477
Liabilities Assumed
44,960
Net Assets Acquired
$
249,517
STACKED
Cash
$
32,567
Accounts Receivable
65,580
Property and Equipment
3,733
Other Assets
0
101,880
Liabilities Assumed
44,960
Net Assets Acquired
$
56,920
XHIBIT, LLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2011
NOTE 8 – SUBSEQUENT EVENTS (UNAUDITED)
On April 12, 2012 the Company entered into a definitive merger
agreement with NB Manufacturing, Inc. ("NBM"), a publically traded shell company currently traded on the OTCBB under
the symbol NBMF. Under the terms of the Merger Agreement, NB and Xhibit propose to engage in a reverse triangular merger resulting
in Xhibit becoming a wholly-owned subsidiary of NBM and the members of Xhibit becoming the majority owners of NBM, holding approximately
83% of the total outstanding shares.
Completion of the merger is contingent upon both parties satisfying
certain conditions in order for the Agreement to become effective.
On March 27, 2012 the Company issued a Promissory Note in the
amount of $500,000 to the father of one of its members. The Promissory Note bears interest at a simple rate of 10% and is due and
payable on September 30, 2012.
The Company is negotiating a merger agreement with Social Bounce,
LLC, an internet social media company owned by the Company's majority shareholder, whereby the Company will issue 21,905,011
of its units to acquire a 100% interest in Social Bounce. The merger is expected to close in May 2012.
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
To the Sole Member
SpyFire Interactive, LLC
We have audited the accompanying balance sheets
of SpyFire Interactive, LLC (the "Company"), as of December 31, 2010 and 2009, and the related statements of income,
member's equity and cash flows for the years then ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audits
in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.
The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.
Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's
internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred
to above present fairly, in all material respects, the financial position of SpyFire Interactive, LLC, as of December 31, 2010
and 2009, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles
generally accepted in the United States of America.
Camarillo, California
February 3, 2011
SPYFIRE INTERACTIVE, LLC
BALANCE SHEETS
December 31,
2010
2009
Assets
Current Assets
Cash
$
87,042
$
5,054
Accounts receivable
122,504
20,538
Accounts receivable, related party
-
6,000
Total current assets
209,546
31,592
Other assets
Computer and equipment, net
2,585
-
Total Assets
$
212,131
$
31,592
Liabilities and Member's Equity
Current Liabilities
Accounts payable and accrued expenses
$
349
$
7,044
Member's Equity
211,782
24,548
Total Liabilities and Member's Equity
$
212,131
$
31,592
See accompanying notes to the financial
statements.
SPYFIRE INTERACTIVE, LLC
STATEMENTS OF INCOME
Year Ended December 31,
2010
2009
Revenues
$
1,971,406
$
215,268
Cost of revenues
702,424
104,834
Gross profit
1,268,982
110,434
Operating expenses:
Sales and marketing
30,445
-
General and administrative
198,304
54,840
Total operating expenses
228,749
54,840
Net Income
$
1,040,233
$
55,594
See accompanying notes to the financial
statements.
SPYFIRE INTERACTIVE, LLC
STATEMENT OF MEMBER'S EQUITY
Member's
Equity
Balance - December 31, 2008
$
28,336
Contributions from member
48,185
Distribution to member
(107,567
)
Net income
55,594
Balance - December 31, 2009
24,548
Contributions from member
413,820
Distribution to member
(1,266,819
)
Net income
1,040,233
Balance - December 31, 2010
$
211,782
See accompanying notes to the financial
statements.
SPYFIRE INTERACTIVE, LLC
STATEMENTS OF CASH FLOWS
Year Ended December 31,
2010
2009
Cash flows from operating activities:
Net income
$
1,040,233
$
55,594
Depreciation
1,293
-
Adjustments to reconcile net income to net cash provided by operating activities:
Changes in accounts receivable
(95,966
)
(5,756
)
Changes in accounts receivable, related party
-
(6,000
)
Accounts payable and accrued expenses
(6,695
)
4,299
Net cash provided by operating activities
938,865
48,137
Cash flows from investing activities:
Purchase of computer
(3,878
)
-
Net cash used in investing activities
(3,878
)
-
Cash flows from financing activities:
Member capital contribution
413,820
48,185
Distribution to member
(1,266,819
)
(107,567
)
Net cash used in financing activities
(852,999
)
(59,382
)
Net increase in cash
81,988
(11,245
)
Cash, beginning of year
5,054
16,299
Cash, end of year
$
87,042
$
5,054
See accompanying notes to the financial
statements.
SPYFIRE INTERACTIVE, LLC
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2010 AND 2009
NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Organization
SpyFire Interactive, LLC (the "Company") was organized
in October 2005 as a Nevada limited liability company. The Company is an online marketing and advertising company providing targeted
and measurable online advertising campaigns and programs for a broad base of advertisers and advertising agency customers. The
Company enables marketers to advertise and sell their products and services through major online marketing channels including display
advertising and affiliate marketing networks.
Basis of Presentation
The financial statements have been prepared on an accrual basis
of accounting. This basis of accounting recognizes revenues when earned and expenses when incurred, with conforms to accounting
principles generally accepted in the United States of America. Management has evaluated subsequent events through February 3, 2012,
the date on which the financial statements were available to be issued.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers
all short-term investments with original maturity of three months or less to be cash equivalents.
Allowance for Doubtful Accounts
The Company carries its accounts receivable at cost, less an
allowance for doubtful accounts. On a period basis, management evaluates accounts receivable balances and establishes and allowance
for doubtful accounts based on history of past write-offs, collections and current credit considerations. Interest is not accrued
on overdue receivables nor is collateral obtained on any amounts due.
Management determined that the allowance for doubtful accounts
was $0 at December 31, 2010 and 2009.
Credit Risk
Financial instruments that potentially subject the Company to
significant concentration of credit risk consist primarily of cash and accounts receivable. All cash balances are maintained in
a single bank and may from time to time exceed Federal Deposit Insurance Corporation ("FDIC") insurance limits. Regarding
trade accounts receivable, the Company minimizes its credit risk by performing credit evaluations of its customers and or limiting
the amount of credit extended. Accounts receivable balances are carried net of any allowances for doubtful accounts.
Computers and Office Equipment
Computers and Office Equipment is carried at cost, less accumulated
depreciation. Maintenance and repairs are expensed as incurred. Computers and office equipment that is retired, damaged beyond
repair or, and the related gain or loss, if any, is taken into income currently. Depreciation is computed using the straight-line
method over the estimated useful lives of the assets. The estimated useful lives for computers and office equipment are three and
five years, respectively.
Use of Estimates
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America 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 Instruments
The carrying value of the Company's financial instruments,
including cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate fair value because
of the short maturities of those instruments.
Revenue Recognition
The Company recognizes revenue when the following criteria have
been met: persuasive evidence of an arrangement exists, no significant Company obligations remain, collection of the related receivable
is reasonably assured, and the fees are fixed or determinable. The Company recognizes revenue at the time services are performed
and sales are generated on behalf of their customers. Revenue is presented net of discounts and allowances.
Income Taxes
The Company is a limited liability company, and therefore is
not subject to income tax, as any income or loss is allocated to, and included in, the personal income tax return of its single
member. Accordingly, no provision is made for income taxes in the financial statements.
NOTE 2 - COMPUTER AND OFFICE EQUIPMENT
Computers and office equipment balances as of December 31, 2010
and 2009 are as follows:
2010
2009
Computers and Office Equipment
$
7,878
$
4,000
Accumulated Depreciation
(5,293
)
(4,000
)
Total
$
2,585
$
-
Depreciation expense for the years ended December 31, 2010 and
2009 was $1,293 and zero, respectively.
NOTE 3 - MEMBERSHIP INTERESTS
As of December 31, 2010 and 2009, the Company had 10,000,000
membership units issued and outstanding. All units were held by a single member.
NOTE 4 – RELATED PARTY TRANSACTIONS
During 2010, the Company entered into certain transactions with
Stacked Digital, LLC ("Stacked"),Hrizzo, LLC ("Hrizzo"), and Eclipse LLC ("Eclipse"), each
a related party. Stacked is owned 50% by the sole member of the Company and 50% by the sole member Hrizzo. Eclipse is owned 100%
by the sole member of Hrizzo. During 2010, Stacked paid the Company $25,000 for certain consulting services; the Company paid Hrizzo,
LLC $24,500 for customer data lists; and Eclipse paid the Company $12,000 for data purchases.
During 2009, Eclipse entered into a revenue transaction to purchase
$6,000 of data from the Company. This amount was still owed at 12/31/09, and is included in the Accounts Receivable, related party
balance on the balance sheet.
NOTE 5—CONCENTRATIONS
The Company receives significant portions of its revenue from
a couple of large businesses. Should any of these customers' businesses fail, the Company's business would be adversely
affected. As of December 31, 2010, two customers represented approximately 51% and 17%, respectively, of trade receivables. For
the year ended December 31, 2010, two customers represented approximately 25%, and 10%, respectively, of net sales.
As of December 31, 2009, four customers represented approximately
29%, 28%, 19%, and 16%, respectively, of trade receivables. For the year ended December 31, 2009, one customer represented approximately
13% of net sales.
NOTE 6 – SUBSEQUENT EVENT
On August 9, 2011 the sole member of the Company entered into
a Unit Exchange Agreement with Xhibit, LLC ("Xhibit") whereby Xhibit acquired 100% of the issued and outstanding membership
interests of the Company. Upon completion of the Unit Exchange Agreement, the sole member of the Company now has a controlling
interest in Xhibit.
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
To the Members
Stacked Digital, LLC
We have audited the accompanying balance sheet
of Stacked Digital, LLC (the "Company"), as of December 31, 2010, and the related statements of income, members'
equity and cash flows for the year then ended. These financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit
in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.
The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.
Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's
internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred
to above present fairly, in all material respects, the financial position of Stacked Digital, LLC, as of December 31, 2010, and
the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted
in the United States of America.
Camarillo, California
February 3, 2012
STACKED DIGITAL, LLC
BALANCE SHEET
AS OF DECEMBER 31, 2010
Assets
Current assets
Cash
$
9,591
Accounts receivable
85,112
Prepaid expense
25,000
Total current assets
119,703
Total Assets
$
119,703
Liabilities and Members' Equity
Accounts payable
5,129
Members' equity
114,574
Total Liabilities and Members' Equity
$
119,703
See accompanying notes to the financial
statements.
STACKED DIGITAL, LLC
STATEMENT OF INCOME
APRIL 12, 2010 (DATE OF INCEPTION) TO
DECEMBER 31, 2010
Revenues
$
396,314
Cost of revenues
86,474
Gross profit
309,840
Operating expenses:
Sales and marketing
163,280
General and administrative
32,441
Total operating expenses
195,721
Net Income
$
114,119
See accompanying notes to the financial
statements.
STACKED DIGITAL, LLC
STATEMENT OF MEMBERS' EQUITY
Members'
Equity
Balance - April 12, 2010 (date of inception)
$
-
Member contributions
500
Member distributions
(45
)
Net income
114,119
Balance - December 31, 2010
$
114,574
See accompanying notes to the financial
statements.
STACKED DIGITAL, LLC
STATEMENT OF CASH FLOWS
APRIL 12, 2010 (DATE OF INCEPTION) TO
DECEMBER 31, 2010
Cash flows from operating activities:
Net income (loss)
$
114,119
Adjustments to reconcile net income to net cash provided by operating activities:
Changes in accounts receivable
(85,112
)
Changes in accounts payable
5,129
Prepaid expenses
(25,000
)
Net cash provided by operating activities
9,136
Cash flows from financing activities:
Member capital contribution
500
Distribution to member
(45
)
Net cash provided by financing activities
455
Net increase in cash
9,591
Cash, beginning of period
-
Cash, end of year
$
9,591
See accompanying notes to the financial
statements.
STACKED DIGITAL, LLC
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2010
NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Organization
Stacked Digital, LLC (the "Company") was organized
on April 12, 2010 as a Washington limited liability company. The Company conducts focused permission-based email marketing campaigns
designed to drive customer traffic to its client's websites.
Basis of Presentation
The financial statements have been prepared on an accrual basis
of accounting. This basis of accounting recognizes revenues when earned and expenses when incurred, with conforms to accounting
principles generally accepted in the United States of America. Management has evaluated subsequent events through February 3, 2012,
the date on which the financial statements were available to be issued.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers
all short-term investments with original maturity of three months or less to be cash equivalents.
Allowance for Doubtful Accounts
The Company carries its accounts receivable at cost, less an
allowance for doubtful accounts. On a period basis, management evaluates accounts receivable balances and establishes and allowance
for doubtful accounts based on history of past write-offs, collections and current credit considerations. Interest is not accrued
on overdue receivables nor is collateral obtained on any amounts due.
Management determined that the allowance for doubtful accounts
was $0 at December 31, 2010.
Credit Risk
Financial instruments that potentially subject the Company to
significant concentration of credit risk consist primarily of cash and accounts receivable. All cash balances are maintained in
a single bank and may from time to time exceed Federal Deposit Insurance Corporation ("FDIC") insurance limits. Regarding
trade accounts receivable, the Company minimizes its credit risk by performing credit evaluations of its customers and or limiting
the amount of credit extended. Accounts receivable balances are carried net of any allowances for doubtful accounts.
Use of Estimates
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America 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 Instruments
The carrying value of the Company's financial instruments,
including cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate fair value because
of the short maturities of those instruments.
Revenue Recognition
The Company recognizes revenue when the following criteria have
been met: persuasive evidence of an arrangement exists, no significant Company obligations remain, collection of the related receivable
is reasonably assured, and the fees are fixed or determinable. The Company recognizes revenue at the time services are performed
and sales are generated on behalf of their customers. Revenue is presented net of discounts and allowances.
Income Taxes
The Company is a limited liability company, and therefore is
not subject to income tax, as any income or loss is allocated to and included in the personal income tax returns of its two members.
Accordingly, no provision is made for income taxes in the financial statements.
NOTE 2 - MEMBERSHIP INTERESTS
As of December 31, 2010, the Company had 10,000 membership units
issued and outstanding held by two individuals, each holding a 50% interest.
NOTE 3 – RELATED PARTY TRANSACTIONS
During 2010 the Company entered into certain transactions with
SpyFire Interactive, LLC ("SpyFire"), and Hrizzo, LLC ("Hrizzo"), each a related party. One of the members
of the Company is also the sole member of SpyFire, and the other member of the Company is also the sole member of Hrizzo. During
2010, the Company paid SpyFire $25,000 for certain consulting services, and received approximately $15,000 from SpyFire for data
purchases. Also during 2010, the Company paid Hrizzo $25,000 for data purchases.
NOTE 4 – CONCENTRATIONS
The Company receives significant portions of its revenue from
a few large customers. Should any of these customers' businesses fail, the Company's business would be adversely affected.
As of December 31, 2010, four customers represented approximately 41%, 21%, 20%, and 10%, respectively, of trade receivables. For
the year ended December 31, 2010, two customers represented approximately 25% and 22%, respectively, of net sales.
NOTE 5 – SUBSEQUENT EVENT
On August 9, 2011 the members of the Company entered into a
Unit Exchange Agreement with Xhibit, LLC ("Xhibit") whereby Xhibit acquired 100% of the issued and outstanding membership
interests of the Company. Upon completion of the Unit Exchange Agreement, one of the members of the Company now has a controlling
interest in Xhibit, LLC.
Condensed Consolidated Statement
of Operations of Xhibit, LLC for the Quarter Ended March 31, 2012 and Condensed Combined Statement of Operations for SpyFire Interactive,
LLC and Stacked Digital, LLC for the Quarter Ended March 31, 2011
Three-month Period
Ended March 31,
2012
2011
Revenues
$
2,162,334
$
870,315
Cost of revenues
1,427,340
274,398
Gross profit
734,994
595,917
Operating expenses:
Sales and marketing
165,983
31,988
General and administrative
670,662
98,715
Research and development
87,326
9,000
Total operating expenses
923,971
139,703
Income (loss) from operations
(188,977
)
456,214
Interest expense
4,561
-
Net Income (Loss)
$
(193,538
)
$
456,214
Xhibit, LLC
Condensed Consolidated Balance
Sheets
March 31, 2012
December 31, 2011
Assets
Current Assets:
Cash
$
569,563
$
241,077
Accounts receivable, net
644,563
606,203
Prepaid expenses
128,742
197,297
Accounts receivable, related party
8,150
8,750
Total current assets
1,351,018
1,053,327
Other assets:
Security deposit
32,731
32,731
Property and equipment, net
78,600
31,036
Total Assets
$
1,462,349
$
1,117,094
Liabilities and Members' Equity
Current Liabilities:
Accounts payable and accrued expenses
$
414,911
$
357,890
Accounts payable, related party
-
14,820
Accrued interest, related party
11,140
6,579
Notes payable, related party
725,665
225,665
Total current liabilities
1,151,716
604,954
Other liabilities
31,897
12,759
Members' Equity
278,736
499,381
Total Liabilities and Members' Equity
$
1,462,349
$
1,117,094
Condensed Consolidated Statement
of Cash Flows of Xhibit, LLC for the Quarter Ended March 31, 2012 and Condensed Combined Statement of Cash Flows for SpyFire Interactive,
LLC and Stacked Digital, LLC for the Quarter Ended March 31, 2011
Three-month Period
Ended March 31,
2012
2011
Cash flows from operating activities:
Net income (loss)
$
(193,538
)
$
456,214
Depreciation
5,539
687
Adjustments to reconcile net income to net cash provided by operating activities:
Accounts receivable
(36,427
)
(123,814
)
Prepaid expenses
68,555
25,000
Accounts receivable, related party
600
-
Accounts payable and accrued expenses
78,787
173,283
Accounts payable, related party
(14,820
)
-
Net cash provided by (used in) operating activities
(91,304
)
531,370
Cash flows from investing activities:
Purchases of property and equipment
(53,103
)
(3,733
)
Net cash used in investing activities
(53,103
)
(3,733
)
Cash flows from financing activities:
Net proceeds from note payable
500,000
-
Member capital contribution
-
7,500
Distributions to member
(27,107
)
(333,003
)
Net cash provided by (used in) financing activities
472,893
(325,503
)
Net increase in cash
328,486
202,134
Cash, beginning of year
241,077
96,633
Cash, end of period
$
569,563
$
298,767
Xhibit, LLC
Consolidated Statement of Members'
Equity
For the Quarter Ended March
31, 2012
Balance - December 31, 2011
$
499,381
Contributions from member
-
Distribution to member
(27,107
)
Net income
(193,538
)
Balance - March 31, 2012
$
278,736
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS OF XHIBIT, LLC FOR THE QUARTER ENDED MARCH 31, 2012 AND THE BALANCE SHEET DATED DECEMBER 31, 2011 AND THE CONDENSED
COMBINED FINANCIAL STATEMENTS OF OPERATIONS AND CASH FLOWS OF SPYFIRE INTERACTIVE, LLC AND STACKED DIGITAL, LLC FOR THE QUARTER
ENDED MARCH 31, 2011
NOTE 1 – THE COMPANY AND BASIS OF PRESENTATION
Organization and Description of Business
Xhibit, LLC ("Xhibit" or "the Company")
was organized on July 18, 2011 as a Nevada limited liability company. On August 9, 2011 Xhibit entered into a Unit Exchange Agreement
whereby the members of SpyFire Interactive, LLC ("SpyFire") and Stacked Digital, LLC ("Stacked") exchanged
100% of their membership units for 18,292,319 of the Company's units. Concurrent with this transaction, SpyFire and Stacked
became wholly-owned subsidiaries of the Company. There is common ownership and management among all three companies. The Company,
through its subsidiaries, is an online marketing and advertising company providing targeted and measurable online advertising campaigns
and programs for a broad base of advertisers and advertising agency customers. The Company enables marketers to advertise and sell
their products and services through major online marketing channels including display advertising and affiliate marketing networks.
Basis of Presentation
The condensed consolidated financial statements of Xhibit, LLC
for the quarter ended March 31, 2012 and the consolidated balance sheet of Xhibit, LLC at December 31, 2011 have been prepared
on an accrual basis of accounting. This basis of accounting recognizes revenues when earned and expenses when incurred and conforms
with U.S. generally accepted accounting principles (GAAP). The condensed consolidated financial statements of Xhibit include the
accounts of the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated
in consolidation.
The condensed combined statements of operations and statements
of cash flows of SpyFire Interactive, LLC and Stacked Digital, LLC for quarter ended March 31, 2011 have been prepared on an accrual
basis of accounting. This basis of accounting recognizes revenues when earned and expenses when incurred and conforms with U.S.
generally accepted accounting principles (GAAP). All significant balances and transactions between SpyFire and Stacked have been
eliminated. The condensed combined statements of operations and statements of cash flow of SpyFire and Stacked have been presented
for comparative purposes only and are not necessarily indicative of the consolidated financial position had the acquisition been
effective as of January 1, 2011.
NOTE 2 – PROPERTY AND EQUIPMENT
Property and equipment consist of the following at March 31,
2012 and December 31, 2011:
March 31, 2012
December 31, 2011
Computers and office equipment
$
46,125
$
30,501
Software
1,854
-
Office furniture
44,951
9,327
Property and equipment, gross
92,930
39,828
Less: accumulated depreciation
(14,330
)
(8,792
)
Total property and equipment, net
$
78,600
$
31,036
NOTE 3 – NOTES PAYABLE
On August 9, 2011 the Company issued a promissory note in the
amount of $333,516 to one of its members. The note carries a simple interest rate of 5% per annum and was due and payable on September
30, 2011. The maturity date on the balance due at December 31, 2011 ($225,665) was extended to June 30, 2012. On April 10, 2012,
the Note along with all accrued interest was paid in full.
On March 27, 2012 the Company issued a Promissory Note in the
amount of $500,000 to one of its members. The Promissory Note bears interest at a simple rate of 10% and is due and payable on
September 30, 2012.
NOTE 4 - MEMBERSHIP INTERESTS
As of March 31, 2012, the Company had 21,905,011 membership
units issued and outstanding held by ten individuals.
NOTE 5 – SUBSEQUENT EVENTS
On April 12, 2012 the Company entered into a definitive merger
agreement with NB Manufacturing, Inc. ("NBM"), a publically traded shell company currently traded on the OTCBB under
the symbol NBMF. Under the terms of the Merger Agreement, NB and Xhibit propose to engage in a reverse triangular merger resulting
in Xhibit becoming a wholly-owned subsidiary of NBM and the members of Xhibit becoming the majority owners of NBM, holding approximately
83% of the total outstanding shares. Completion of the merger is contingent upon both parties satisfying certain conditions in
order for the Agreement to become effective.
The Company is negotiating a merger agreement with Social Bounce,
LLC, an internet social media company owned by the Company's majority shareholder, whereby the Company will issue 21,905,011
of its units to acquire a 100% interest in Social Bounce. The merger is expected to close in May 2012.
XHIBIT LLC
PRO FORMA CONDENSED COMBINED FINANCIAL
STATEMENTS (UNAUDITED)
The following unaudited pro forma condensed
combined balance sheet assumes the Merger of NB Manufacturing, Inc. ("NBM"), a Nevada corporation, and Xhibit, LLC
("Xhibit"), a Nevada limited liability corporation, and the related transactions described in the notes hereto had
occurred on March 31, 2012. The unaudited pro forma condensed combined balance sheet as of March 31, 2012 is based on the unaudited
historical balance sheet of NBM and the unaudited consolidated balance sheet of Xhibit as of March 31, 2012.
The following unaudited pro forma condensed
combined statement of operations for the year ended December 31, 2011 assumes the merger between NMB and Xhibit had occurred on
January 1, 2011. The statement is based on the audited statements of operations of NBM and Xhibit for the year ended December 31,
2011. The unaudited profroma condensed combined statement of operations for the quarter ended March 31, 2012 assumes the merger
had occurred on January 1, 2011. The statement is based on the unaudited statements of operations of NMB and Xhibit for the quarter
ended March 31, 2012.
The Merger will be accounted for as a reverse
merger in which Xhibit is the accounting acquirer, a capital transaction in substance. The parties believe that Xhibit is the accounting
acquirer for accounting purposes for the following reasons: (i) current Xhibit officers will control the management of the combined
companies, (ii) designees of Xhibit will control the Board of Directors and (iii) current Xhibit shareholders will be the largest
group of shareholders of the combined company following the merger and are likely to vote together, although there is no formal
agreement among them. The accounting treatment utilizes the structure of the combined company and the combined company's
assets and liabilities will be recorded at their historical cost. The legal status of NBM as the surviving corporation will not
change as a result of the accounting treatment.
The unaudited pro forma condensed combined
financial statements include all material adjustments believed to be necessary to reflect the recapitalization with Xhibit and
its wholly owned subsidiaries.
The pro forma condensed combined financial
statements should be read in conjunction with the separate financial statements and related notes thereto of NBM and Xhibit. These
pro forma financial statements are not necessarily indicative of the combined financial position, had the acquisition occurred
at the end of the periods indicated above, or the combined results of operations which might have existed for the periods indicated
or the results of operations as they may be in the future.
XHIBIT, LLC & NB MANUFACTURING, INC.
UNAUDITED CONDENSED COMBINED PROFORMA
BALANCE SHEET
For the Three Months Ended March 31,
2012
NB
Manufacturing,
Proforma
Combined
Xhibt
Inc.
Adjustments
Proforma
Assets
Current Assets
Cash
$
569,563
-
$
569,563
Accounts receivable, net
644,563
-
644,563
Prepaid expense
128,742
-
128,742
Accounts receivable, related party
8,150
-
8,150
Total current assets
1,351,018
-
-
1,351,018
Other Assets
Security deposit
32,731
-
32,731
Property and equipment, net
78,600
78,600
Total Assets
$
1,462,349
$
-
$
-
$
1,462,349
Liabilities and Members'/Shareholders' Equity
Current Liabilities
Accounts payable and accrued expenses
$
426,051
$
5,000
$
431,051
Notes payable, related party
725,665
-
725,665
Total current liabilites
1,151,716
5,000
1,156,716
Other liabilities
31,897
31,897
Members'/Shareholdrers' Equity
Common stock
1,120
5,538
(1)
6,658
Additional paid in capital
198,101
665,241
(2)
863,342
Retained earnings (deficit)
(204,221
)
204,221
(2)
-
Members' capital
875,000
(875,000
)
(2)
-
Retained earnings (deficit)
(596,264
)
(596,264
)
Total members'/shareholders' equity (deficit)
278,736
(5,000
)
273,736
Total Liabilities and Members'/Shareholders' Equity
$
1,462,349
$
-
$
1,462,349
XHIBIT, LLC & NB MANUFACTURING, INC.
UNAUDITED CONDENSED COMBINED PROFORMA
STATEMENT OF OPERATIONS
Year Ended December 31, 2011
NB
Manufacturing,
Pro Forma
Combined
Xhibt, LLC
Inc.
Adjustments
Pro Forma
Revenues
$
6,351,384
$
6,351,384
Cost of revenues
3,760,553
3,760,553
Gross profit
2,590,831
2,590,831
Operating expenses:
Sales and marketing
388,589
388,589
General and administrative
2,481,846
$
27,152
2,508,998
Research and development
49,820
49,820
Total operating expenses
2,920,255
27,152
2,947,407
Loss from operations
(329,424
)
(27,152
)
(356,576
)
Interest expense, related party
6,579
1,716
8,295
Net Loss
$
(336,003
)
$
(28,868
)
$
(364,871
)
XHIBIT, LLC & NB MANUFACTURING, INC.
UNAUDITED CONDENSED COMBINED PROFORMA
STATEMENT OF OPERATIONS
For the Three Months Ended March 31,
2012
NB
Manufacturing,
Proforma
Combined
Xhibt, LLC
Inc.
Adjustments
Proforma
Revenues
$
2,162,334
$
2,162,334
Cost of revenues
1,427,340
1,427,340
Gross profit
734,994
734,994
Operating expenses:
Sales and marketing
165,983
165,983
General and administrative
670,662
$
10,130
680,792
Research and development
87,326
87,326
Total operating expenses
923,971
10,130
934,101
Income from operations
(188,977
)
(10,130
)
(199,107
)
Interest expense
4,561
4,561
Net Income
$
(193,538
)
$
(10,130
)
$
(203,668
)
PROFORMA ADJUSTMENTS TO THE UNAUDITED CONDENSED COMBINED
FINANCIAL STATEMENTS
(1)
To reflect the recapitalization of Xhibit through the issuance of 55,383,452 shares at par ($5,538)
of NBM in connection with the Merger.
(2)
To reflect the net adjustment to additional paid in capital for the elimination of the Members'
Capital of Xhibit and Retained Earnings of NBM in connection with the recapitalization.