Quarterly Report (10-q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

o	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15( d ) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended May 31, 2015

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________ to _______________

Commission file number 000-54536

PREFERRED RESTAURANT BRANDS, INC.

(Exact name of registrant as specified in its charter)

Florida	80-0608195
State or other jurisdiction of incorporation or organization	(I.R.S. Employer Identification No.)

c/o KCI Investments, LLC 4033 South Dean Martin Drive; Las Vegas, NV	89103
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (702) 834-7101

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes o No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). x Yes o No

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

Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) o Yes x No

As of August 20, 2015 issuer had 46,739,366 shares of common stock issued and outstanding.

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION	4

Item 1: Financial Statements	4

NOTE 1—ORGANIZATION AND NATURE OF BUSINESS	7

NOTE 2—GOING CONCERN	7

NOTE 3—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	8

NOTE 4—PROPERTY AND EQUIPMENT	9

NOTE 5—ASSET SALES AND PURCHASES	10

NOTE 6—INTANGIBLE ASSETS	10

NOTE 7—RELATED PARTY TRANSACTIONS	11

NOTE 8—DEBT	12

NOTE 9—CONVERTIBLE NOTES PAYABLE	13

NOTE 10—DERIVATIVE LIABILITY	13

NOTE 11—CLASS B MEMBERSHIP UNITS	14

NOTE 12—STOCKHOLDERS’ DEFICIT	15

NOTE 13—STOCK OPTIONS AND WARRANTS	16

NOTE 14—SUBSEQUENT EVENTS	17

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	18

FORWARD LOOKING INFORMATION	18

OVERVIEW	19

Item 3. Quantitative and Qualitative Disclosures about Market Risk	23

Item 4. Controls and Procedures.	23

PART II - OTHER INFORMATION	24

Item 1. Legal Proceedings	24

Item 1A. Risk Factors	24

Item 2. Unregistered Sale of Equity Securities and Use of Proceeds	24

Item 3. Defaults upon Senior Securities	24

Item 4. Mine Safety Disclosures	24

Item 5. Other Information	24

Item 6. Exhibits	24

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

Certain statements in this report contain or may contain forward-looking statements that are subject to known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These forward-looking statements were based on various factors and were derived utilizing numerous assumptions and other factors that could cause our actual results to differ materially from those in the forward-looking statements. These factors include, but are not limited to, our ability to implement our business plan and generate revenues, economic, political and market conditions and fluctuations, government and industry regulation, U.S. and global competition, and other factors. Most of these factors are difficult to predict accurately and are generally beyond our control. You should consider the areas of risk described in connection with any forward-looking statements that may be made herein. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. Readers should carefully review this in its entirety, including but not limited to our financial statements and the notes thereto. Except for our ongoing obligations to disclose material information under the Federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events.

PART I - FINANCIAL INFORMATION

Item 1: Financial Statements

PREFERRED RESTAURANT BRANDS, INC. AND SUBSIDIARIES
(FORMERLY DIXIE FOODS INTERNATIONAL, INC.)
CONDENSED CONSOLIDATED BALANCE SHEETS

	May 31,			August 31,
	2015			2014
	(Unaudited)
ASSETS

CURRENT ASSETS:
Cash	$	34,241		$	24,033
Accounts receivable		146,751			75,216
Other receivables		-			4,632
Food inventory		99,679			103,367
Prepaid expenses		305,951			111,678
Debt issuance costs, net		116,640			-
Total Current Assets		703,262			318,926

Prepaid franchise and territory rights fees, net		681,986			897,846
Property and equipment, net		4,029,839			3,418,743

TOTAL ASSETS	$	5,415,087		$	4,635,515

LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES:
Accounts payable and accrued expenses	$	4,525,024		$	933,507
Deferred revenue		39,835			95,186
Loans payable		-			-
Related party notes payable		1,365,287			-
Short-term notes payable, net of discounts		7,428,027			7,366,299
Short-term convertible notes payable		1,172,484			300,000
Derivative liability		1,067,472			-
Total Current Liabilities		15,598,129			8,694,992

Long-term notes payable		567,211			500,000
Long-term convertible notes payable		550,000			550,000

TOTAL LIABILITIES		16,715,340			9,744,992

Class B membership units, no par value, 8 units authorized, 7 and 2 units issued and outstanding, respectively		3,500,000			1,000,000

STOCKHOLDERS' DEFICIT:
Preferred stock, $0.001 par value, 14,999,999 shares authorized, no shares issued and outstanding		-			-
Series Class B preferred stock, $0.001 par value, 1 share authorized, 1 and -0- shares issued and outstanding, respectively		118,092			-
Common stock, $0.001 par value, 150,000,000 shares authorized, 46,339,366 and 42,570,975 shares issued and outstanding		46,340			42,572
Additional paid-in capital		18,412,719			14,311,918
Accumulated deficit		(33,377,404	)		(20,463,967	)
TOTAL STOCKHOLDERS' DEFICIT		(14,800,253	)		(6,109,477	)

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	5,415,087		$	4,635,515

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

PREFERRED RESTAURANT BRANDS, INC. AND SUBSIDIARIES
(FORMERLY DIXIE FOODS INTERNATIONAL, INC.)
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	Three Months Ended May 31,						Nine Months Ended May 31,
	2015			2014			2015			2014

REVENUE	$	2,185,433		$	1,851,020		$	6,110,079		$	4,468,839

OPERATING EXPENSES:
Restaurant operating costs:
Food, beverage and packaging		689,944			960,394			2,238,728			1,915,101
Labor and related		829,004			514,259			2,227,821			1,204,159
Occupancy		169,607			164,579			964,921			461,053
Other restaurant operating		271,098			179,132			1,435,933			710,601
Total Restaurant Operating Expenses		1,959,653			1,818,364			6,867,403			4,290,914

Income (Loss) from Restaurant Operations		225,780			32,656			(757,324	)		177,925

General and administrative		2,401,136			131,088			7,022,470			1,193,936
Depreciation and amortization		135,416			239,112			341,435			359,079
Pre-opening costs		35,573			8,512			508,977			318,072
Total		2,572,125			378,712			7,872,882			1,871,087

LOSS FROM OPERATIONS		(2,346,345	)		(346,056	)		(8,630,206	)		(1,693,162	)

OTHER INCOME (EXPENSES):
Loss on sale of assets		-			-			(63,280	)		-
Interest expense		(874,664	)		(77,691	)		(5,721,405	)		(383,133	)
Derivative gain (expense)		688,197			-			1,496,437			301,140
Other income (expense)		42,867			(2,988	)		5,017			(2,988	)
TOTAL OTHER INCOME (EXPENSE)		(143,600	)		(80,679	)		(4,283,231	)		(84,981	)

LOSS BEFORE PROVISION FOR INCOME TAXES		(2,489,945	)		(426,735	)		(12,913,437	)		(1,778,143	)

PROVISION FOR INCOME TAXES		-			-			-			-

NET LOSS	$	(2,489,945	)	$	(426,735	)	$	(12,913,437	)	$	(1,778,143	)

NET LOSS PER SHARE - BASIC AND DILUTED	$	(0.05	)	$	(0.01	)	$	(0.29	)	$	(0.04	)

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING:
Basic and diluted		45,775,720			42,570,975			44,377,770			42,570,975

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

PREFERRED RESTAURANT BRANDS, INC. AND SUBSIDIARIES
(FORMERLY DIXIE FOODS INTERNATIONAL, INC.)
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Nine Months Ended May 31,
	2015			2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(12,913,437	)	$	(1,878,143	)
Adjustments to reconcile change in net loss to net cash used in operating activities:
Depreciation and amortization		983,071			726,726
Loss on sale of assets		63,280			-
Expenses paid on behalf of the Company by related parties		89,760			-
Fair value of warrants issued for interest expense on debt		-			717,207
Amortization of debt discounts and debt issuance costs		337,830			519,718
Change in derivative liability		1,005,240			(301,140	)
Services credited for exercise of warrants and stock options		-			(75,000	)
Stock issued in connection with execution of notes payable		621,597			-
Stock and warrants granted for loan modifications		8,800			-
Vesting of stock options granted		2,491,149			47,652
Common stock issued for services		983,022			-
Changes in operating assets and liabilities:
Accounts and other receivables, net		(71,535	)		(40,764	)
Food inventory		11,720			(5,992	)
Deposits and prepaid expenses		(184,857	)		(39,554	)
Debt issuance costs		(116,640	)		-
Accounts payable and accrued liabilities		3,616,678			38,740
Deferred revenue		(55,351	)		(14,177	)
NET CASH USED IN OPERATING ACTIVITIES		(3,129,673	)		(304,727	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		(1,139,031	)		(636,796	)
Cash paid for territory and franchise rights		(37,500	)		(224,000	)
Cash paid for asset acquisition		(328,032	)		(107,187	)
Cash received in asset sales		25,000			-
NET CASH USED IN INVESTING ACTIVITIES		(1,479,563	)		(967,983	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from related party notes payable		1,275,880			530,367
Proceeds from notes payable		1,023,500			660,000
Repayments on notes payable		(1,131,016	)		(700,000	)
Proceeds from convertible notes payable		1,190,000			-
Repayments on convertible notes payable		(238,920	)		-
Proceeds from Class B membership units issued for cash		2,500,000			1,000,000
NET CASH PROVIDED BY FINANCING ACTIVITIES		4,619,444			1,490,367

NET CHANGE IN CASH		10,208			217,657

CASH, BEGINNING OF PERIOD		24,033			255,293

CASH, END OF PERIOD	$	34,241		$	472,950

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for interest	$	-		$	-
Cash paid for income taxes	$	-		$	-

NON-CASH INVESTING AND FINANCING ACTIVITIES:
Debt discounts on notes payable	$	83,450		$	-
Origination of derivative liabilities and issuance of preferred stock	$	182,190		$	-

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

PREFERRED RESTAURANT BRANDS, INC. AND SUBSIDIARIES

(FORMERLY DIXIE FOODS INTERNATIONAL, INC.)

Notes to Consolidated Financial Statements

NOTE 1—ORGANIZATION AND NATURE OF BUSINESS

Preferred Restaurant Brands, Inc. (the “Company”; OTCQB:”PRBI”) was formed in May 2010 as Dixie Foods, International, Inc. to operate a specialty food business for salad dressing, sauces and condiments. The Company was organized and still operates under the laws of the State of Florida. In November, 2014, the Company changed its name to “Preferred Restaurant Brands” and recently effected that change with FINRA, the SEC and other regulatory authorities. The fiscal year end for the Company and all of its subsidiaries is August 31. The Company has aggregated its operations into one reportable segment.

On June 4, 2014, the Company completed the purchase (the “Reverse Acquisition”) of KCI Investments, LLC (“KCI”), a Nevada limited liability company headquartered in Las Vegas, Nevada. In connection with the Reverse Acquisition, the Company acquired 100% of the issued and outstanding membership interests of KCI from KCI Holding I, LLC ("KCI Holding"), and an entity that, until the consummation of the Reverse Acquisition, held 100% of the membership interests in KCI. Currently, all of the operations of the Company are conducted under KCI or one of KCI's subsidiaries.

KCI was formed on November 8, 2004, but did not engage in any business operations until November 2010. Currently, KCI is engaged in developing, owning and operating a multi-brand chain of restaurants, currently under two franchise brands: Capriotti’s Sandwich Shops and Papa John’s. KCI also operates and is developing various other restaurant concepts. KCI and its various subsidiaries, currently operate 17 restaurants:

·	9 franchised Capriotti's Sandwich Shops:

·	six franchised Papa John’s pizza restaurants (four of which it opened in late calendar 2014 and two of which it acquired in February 2014, and

·	two proprietary, fine casual restaurants: Elements Kitchen & Martini Bar and Social Bistro & Wine Bar.

Additionally, the Company has in various stages of development and construction eight Papa John’s all of which it anticipates opening over the next 12 months subject to access to additional capital.

NOTE 2—GOING CONCERN

These financial statements have been prepared on a going concern basis, which implies that the Company will continue to realize its assets and discharge its liabilities in the normal course of business. As of May 31, 2015, the Company has a working capital deficit of $14,894,867 and an accumulated deficit of $33,377,404. The continuation of the Company as a going concern is dependent upon the continued financial support from its management, and its ability to: identify future investment opportunities and obtain the necessary debt or equity financing and generate profitable operations from the Company’s future operations. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management's plan is to obtain such resources for the Company by obtaining debt and/or equity capital from existing and/or new investors and/or creditors sufficient to meet its ongoing operating expenses, pending transactions and growth plans. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

NOTE 3—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Condensed Financial Statements

The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows at November 30, 2014 and for all periods presented have been made.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed consolidated financial statements be read in conjunction with the financial statements and notes thereto included in the Company's August 31, 2014 audited financial statements. The results of operations for the periods ended May 31, 2015 and 2014 are not necessarily indicative of the operating results for the full years.

Use of Estimates

The preparation of financial statements, in conformity with U.S. generally accepted accounting principles, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates under different assumptions or conditions.

Cash and Cash Equivalents

The Company considers all highly liquid investment instruments purchased with an initial maturity of three months or less to be cash equivalents.

Accounts Receivable

Accounts receivable primarily consists of receivables from undeposited funds from the Company’s credit card processor, third party gift card distributors, payroll-related tax receivables, vendor rebates and receivables arising from the normal course of business from catering sales. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable based on a specific review of account balances. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recoverability is considered remote.

Inventory

Inventory (consisting principally of food, beverages and supplies), is valued at the lower of first-in, first-out cost or market. Certain key ingredients bread, meats, vegetables, cheeses and beverages are purchased from a small number of suppliers.

Revenue Recognition

Revenue from restaurant sales is recognized when food and beverage products are sold. The Company reports revenue net of sales and use taxes collected from customers and remitted to governmental taxing authorities.

Income Taxes

The Company accounts for income taxes in accordance with Accounting Standards Codification Topic 740, Income Taxes ("Topic 740"), which requires the recognition of deferred tax liabilities and assets at currently enacted tax rates for the expected future tax consequences of events that have been included in the financial statements or tax returns. A valuation allowance is recognized to reduce the net deferred tax asset to an amount that is more likely than not to be realized.

Topic 740 provides guidance on the accounting for uncertainty in income taxes recognized in a company's financial statements. Topic 740 requires a company to determine whether it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the position. If the more likely-than-not threshold is met, a company must measure the tax position to determine the amount to recognize in the financial statements.

At the adoption date of November 1, 2007, the Company had no unrecognized tax benefit which would affect the effective tax rate if recognized. The Company includes interest and penalties arising from the underpayment of income taxes in the statements of operations in the provision for income taxes. As of May 31, 2015 and August 31, 2014 the Company had no accrued interest or penalties related to uncertain tax positions. The Company files an income tax return in the U.S. federal jurisdiction and the state of California. With few exceptions, the Company is no longer subject to U.S. federal, state, and local, or non-U.S. income tax examinations by tax authorities for years before 2008.

Basic and Diluted Loss per Common Share

Basic loss per common share is calculated by dividing the Company’s net loss applicable to shareholders by the weighted average number of shares during the period. Diluted loss per share is calculated by dividing the Company’s net loss available to shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is adjusted for any potentially dilutive debt or equity. There were 5,448,276 such shares outstanding as of May 31, 2015, which were excluded from the calculation of diluted loss per share as their effect would have been anti-dilutive.

New Accounting Pronouncements

The Company’s management has considered all recent accounting pronouncements. Management believes that these recent pronouncements will not have a material effect on the Company’s financial statements.

NOTE 4—PROPERTY AND EQUIPMENT

As of May 31, 2015 and August 31, 2014 the Company’s property and equipment consisted of the following:

	May 31, 2015			August 31, 2014
Building and leasehold improvements	$	3,428,387		$	3,161,646
Machinery and equipment		1,057,787			1,022,299
Furniture and fixtures		1,253,461			358,390
Less: Accumulated depreciation		(1,709,796	)		(1,123,52	)
Property and equipment, net	$	4,029,839		$	3,418,743

Depreciation expense included as a charge to income (including restaurant-related depreciation) recorded in “Other operating costs” was $620,449 and $440,139 for the nine months ended May 31, 2015 and 2014, respectively.

NOTE 5—ASSET SALES AND PURCHASES

Purchases

On February 18, 2015, the Company consummated the acquisition of two, franchised Papa John's locations in the Company's existing trade area in Northern California: one in Fresno and the other in Clovis. In total the Company paid the seller $320,000 in cash.

The total purchase price was allocated as follows:

Consideration paid:
Cash paid	$	320,000
Total purchase price	$	320,000

Consideration received:
Property and equipment - Fresno	$	35,000
Property and equipment - Clovis		35,000
Territory and franchise rights – Fresno		75,000
Territory and franchise rights – Clovis		75,000
Leasehold Improvements - Fresno		25,000
Leasehold Improvements - Clovis		25,000
Covenant not to compete - Fresno		25,000
Covenant not to compete - Clovis		25,000
Total assets acquired	$	320,000

Sale

On February 19, 2015, the Company consummated the sale of its Green Valley Ranch Capriotti’s Sandwich Shop (“GVR”) to another franchisee of Capriotti’s Sandwich Shops. Pursuant to the asset purchase agreement, the purchase price of the assets consisted of a one-time payment of $25,000 in cash.

The total sale price was allocated as follows:

Sale Consideration	$	25,000

Allocation Of Sale Consideration
Transaction-Related Expenses	$	691
GVR-Related Payables		21,081
Receivable For Net Cash Proceeds to Company		3,228
Total	$	25,000

NOTE 6—INTANGIBLE ASSETS

Intangible assets represent capitalized prepaid territory rights and franchise fees paid. The costs are amortized over the remaining life of the contract executed with the franchisor.

As of May 31, 2015 and August 31, 2014 the Company’s territory and franchise rights consisted of the following:

	May 31, 2015			August 31, 2014
Territory and franchise rights	$	1,965,297		$	1,926,194
Less: Accumulated amortization		(1,283,311	)		(1,028,348	)
Territory and franchise rights, net	$	681,986		$	897,846

Amortization expense on intangible assets included as a charge to income was $254,963 and $286,588 for the nine months ended May 31, 2015 and 2014, respectively.

Estimated amortization expense to be recorded for the next five years is as follows:

2015 (remaining)	$	214,937
2016		112,929
2017		110,108
2018		110,108
2019		110,108
Thereafter		23,796
Total future amortization	$	681,986

NOTE 7—RELATED PARTY TRANSACTIONS

As of August 31, 2014, the Company owed $-0- to related parties. During the nine month period ended May 31, 2015, related parties made cash loans of $2,382,906 and paid for Company expenses of $89,407. The Company made cash repayments of $1,107,027, leaving an ending balance due of $1,365,287 due to related parties at May 31, 2015. All related party loans bear no interest, are unsecured and are due on demand.

The Company’s CEO, Kenneth Antos, has personally guaranteed virtually all the outstanding obligations due by the Company. This includes: virtually all of the outstanding notes payables on all loans; leases with the various landlords, and all of the Company's obligations to franchisors.

NOTE 8—DEBT

As of May 31, 2015 and August 31, 2014 the Company’s notes payable consisted of the following:

	May 31,		August 31,
	2015		2014
Note payable bearing interest at 13.5% per annum, originated June 22, 2012, original maturity date of June 22, 2013. This note bears a default interest rate of 18.5%*.	$	2,950,000	$	2,700,000

Note payable bearing interest at 12.0% per annum, originated December 27, 2012, original maturity date of December 27, 2013. This note is in default and currently bears a default interest rate of 17.0% plus late fees1.		1,000,000		1,000,000

Note payable bearing interest at 12.0% per annum, originated February 1, 2013, original maturity date of August 1, 2014. This note is in default and currently bears a default interest rate of 17.0% plus late fees¹.		550,000		550,000

Note payable bearing interest at 12.0% per annum, originated February 1, 2013, original maturity date of August 1, 2014. This note is in default and currently bears a default interest rate of 17.0% plus late fees¹.		650,000		650,000

Note payable bearing interest at 12.0% per annum, originated February 1, 2013, original maturity date of August 1, 2014. This note is in default and currently bears a default interest rate of 17.0% plus late fees¹.		800,000		800,000

Note payable bearing interest at 12.0% per annum, originated October 30, 2013, original maturity date of November 30, 2013. This note is in default and currently bears a default interest rate of 17.0% plus late fees¹.		99,166		99,166

Note payable bearing interest at 13.3% per annum, originated August 13, 2013, original maturity date of August 1, 2014. This note is in default and currently bears a default interest rate of 18.3% plus late fees¹.		90,000		90,000

Note payable bearing interest at 12.0% per annum, originated June 7, 2013, original maturity date of June 7, 2016. This note is in default and currently bears a default interest rate of 17.0% plus late fees ¹.		500,000		500,000

Note payable bearing interest at 12% per annum, originated August 24, 2013, original maturity date of October 24, 2014. This note is in default and currently bears a default interest rate of 18.3% plus late fees¹.		8,858		8,656

Note payable originated October 2, 2014, original maturity date of October 16, 2014.		100,000		-

Note payable bearing interest at 10.0% per annum, originated December 4, 2013, due on October 15, 2014. This note is currently in default and bears a default interest rate of 15.0%.		560,000		560,000

Notes payable bearing interest at 5.0% per annum, originated August 31, 2014, payable upon demand.		80,000		80,000

Notes payable bearing interest at 18.0% per annum originated May 8, 2014, payable upon demand.		225,000		250,000

Notes payable bearing interest at 7.4% per annum, originated July 11, 2014 maturity date of April 13, 2015.		25,860		126,577

Notes payable bearing interest at 6.3% per annum, originated January 26, 2015, maturity date of February 2, 2019.		67,211		-

Notes payable bearing interest at 8.0% per annum, originated April 22, 2015 maturity date of June 30, 2015		250,000		-

Secured borrowings		39,143		449,722

Total notes payable	$	7,995,237	$	7,866,299
Less: current-term portion of notes payable		(7,428,027)		(7,366,299)
Long-term notes payable	$	567,211	$	500,000

In addition to the notes payable noted in the table above, on September 25, 2014, the Company entered into a note payable with a principal balance of $100,000, bearing an interest obligation of $5,000 per annum and due on October 9, 2014. The note was repaid in full during the period ended May 31, 2015 through the payment of $100,000 in cash.

Secured Borrowings

As of May 31, 2015, the Company has entered into various accounts receivable financing arrangements with third parties for a combined principal amount received in cash of $670,000. The terms of the arrangements require the Company to repay the principal balance plus an additional $252,650 for total remittance of $922,650. The terms of repayment require the Company to remit to the lender between 15 and 24 percent of all future receivables arising from credit card, debit card and prepaid transactions until such time as the total remittance is paid in full. These borrowing is secured by the assets of the Company.

The additional $252,650 will be recognized as interest expense over the estimated terms of the agreements. The terms are not fixed due to the variable repayment terms; however, management currently estimates such terms to be between approximately two (2) and eight (8) months. The ending principal balance of these borrowings at May 31, 2015 and August 31, 2014 was $39,142and $449,722, respectively (net of debt discounts of $8,895 and $161,899, respectively).

NOTE 9—CONVERTIBLE NOTES PAYABLE

As of May 31, 2015 and August 31, 2014 the Company’s convertible notes payable consisted of the following:

	May 31,		August 31,
	2015		2014
Convertible note payable bearing interest at 10.0% per annum, originated April 23, 2012, original maturity date of April 23, 2017. The note is convertible into common shares of KCI at $1.00 per share.	$	550,000	$	550,000

Convertible note payable bearing interest at 9.0% per annum, originated July 25, 2013, original maturity date of July 25, 2018. The note is convertible into common shares of the Company at $1.50 per share.		50,000		50,000

Convertible note payable bearing interest at the market interest rate plus 6.4% per annum, originated May 1, 2012, original maturity date of May 1, 2015. The note is convertible into common shares of KCI at $0.30 per share.		300,000		300,000

Convertible note payable bearing interest at 12.0% per annum, originated February 17, 2015, maturity date of February 16, 2016. The note is convertible upon the occurrence and continuance of an event of default for a 15 day period at 85 percent of the lowest average daily volume weighted average price of the Company's common shares during the five trading days immediately prior to the date of conversion.		682,484		-

Convertible note payable bearing interest at 0.0% per annum, originated April 21, 2013, original maturity date of May 29, 2015. The note is convertible into common shares of the Company at the lower of $0.0001 or 50% of the lowest market price for the 10 days prior to conversion date.		190,000		-

Total notes payable	$	1,722,484	$	850,000
Less: current portion		(1,172,484)		300,000

Long-term convertible notes payable	$	550,000	$	550,000

In addition to the notes payable noted in the table above, on December 31, 2014, the Company entered into a convertible note payable with a principal balance of $100,000, bearing interest at 18.0% per annum and due on demand. The note was convertible into common shares of the Company at the 65% of the lowest average daily volume weighted average price of the Company's common shares during the fifteen trading days immediately prior to the date of conversion. The note was repaid in full during the period ended May 31, 2015 through the payment of $110,000 in cash, inclusive of $10,000 of interest.

The intrinsic value of the beneficial conversion feature and the debt discount associated with all convertible debts were recorded based on the relative fair value of the equity in relation to the debt in accordance with ASC 470. The total initial beneficial conversion feature recorded for the convertible notes equaled $182,190 of which $103,594 was amortized during the period, leaving an ending balance of debt discount of $78,596 as of June 30, 2015.

NOTE 10—DERIVATIVE LIABILITY

Effective July 31, 2009, the Company adopted ASC 815 which defines determining whether an instrument (or embedded feature) is solely indexed to an entity’s own stock. The exercise price of certain warrants granted during the period ended February 15, 2015 are variable and subject to the fair value of the Company’s common stock on the date of exercise. As a result, the Company has determined that the exercise feature is not considered to be solely indexed to the Company’s own stock and is therefore not afforded equity treatment. In accordance with ASC 815, the Company has bifurcated the exercise feature of the instruments to be recorded as a derivative liability.

ASC 815 requires Company management to assess the fair market value of derivatives at each reporting period and recognize any change in the fair market value as items of other income or expense. The Company’s only asset or liability measured at fair value on a recurring basis is its derivative liability associated with these warrants.

At origination and subsequent revaluations, the Company valued the derivative liability using the Black-Scholes options pricing model under the following assumptions:

	February 28 2015

Risk-free interest rate		0.25% – 1.52	%
Expected options life		0.21 – 4.65
Expected dividend yield		-
Expected price volatility		185% – 407	%

During the period ended May 31, 2015, the Company’s derivative liability increased from $0 to $1,067,472 in conjunction with settlement of convertible notes payable, additions of new derivative liabilities and subsequent revaluations of existing derivative liabilities.

During the year ended August 31, 2014, the Company's derivative liability decreased from $604,553 to $0 and recognized a gain on derivative liability of $604,553 in conjunction with settlement of convertible notes payable, additions of new derivative liabilitites and subsequent revaluations of existing derivative liabilities.

NOTE 11—CLASS B MEMBERSHIP UNITS

The Company is authorized to issue up to eight (8) Class B membership units with no par value. As of May 31, 2015 and August 31, 2014, there were seven (7) and two (2) shares of Class B membership units issued and outstanding, respectively.

In all cases noted above, each Class B membership unit was sold for $500,000, plus for administrative costs payable to third parties. Each unit carries equal voting rights to the Class A membership units of each subsidiary. Each Class B unit is entitled to receive distributions equal to 0.5 percent to 3.0% of the value of the units held each year.

Adjudication and Redemption of Class B Membership Units

The Class B membership units are linked to approval of an EB-5 Visa, which requires a foreign investor to invest $1,000,000 (or at least $500,000 in a "Targeted Employment Area" - high unemployment or rural area), in projects that create at least 10 jobs for U.S. workers. The terms of the instrument state that the Class B membership units have an indefinite life; however, once adjudication is reached in the EB-5 Visa approval process, the managing member of the LLC may, in its sole discretion, elect to have the Company purchase, for fair market value, the unit holders Class B Units at any time following an offer by such member to sell his or her Class B Units. This election is optional on the part of the managing member and member has no rights to cause the managing member or the Company to repurchase or redeem such member’s Class B unit. As such, the units (1) are not mandatorily redeemable, (2) are redeemable at the sole discretion of the Company and (3) not redeemable at the sole option of the unit holder and the redemption must be agreed to by Company.

Denial of I-526 Petition

If the member’s I-526 Petition is denied with respect to that member’s investment in the company, and the member has not been previously expelled from the company, the member has the right, within fifteen days following the date of the I-526 Denial, to request that the company cancel that member’s entire interest in the Company and which time the Company will return the member’s capital contribution and administrative fee, without interest. As such and as the Class B units are not entitled to the distribution of profits and losses, the redeemable value of the membership interest are presented in the mezzanine section of the balance until such time as the I-526 petition is successfully approved after they value of the shares will be moved into permanent equity. No adjustments for noncontrolling interests have been made.

During the nine months ended May 31, 2015, Company subsidiaries issued 5 Class B membership units in exchange for total cash proceeds of $2,500,000 (not inclusive of $300,000 received for administrative fees due and payable to third parties).

During the year ended August 31, 2014, Company subsidiaries issued two (2) Class B membership units in exchange for total cash proceeds of $1,120,000 (inclusive of $60,000 received for administrative fees due and payable to third parties).

NOTE 12—STOCKHOLDERS’ DEFICIT

The Company’s authorized capital stock consists of 150,000,000 shares of common stock, $0.001 par value per share, and 15,000,000 shares of preferred stock, par value $0.001 per share. As of May 31, 2015 and August 31, 2014, there were 46,339,366 and 42,570,975 shares of common stock issued and outstanding, respectively, and one share of preferred stock issued and outstanding, respectively.

Preferred Stock

Our board of directors has the authority, without stockholder approval, to issue up to 14,999,999 shares of preferred stock, $0.001 par value, of which 1 share is designated as Series B Convertible Preferred Stock. The authorized preferred stock may be issued by the Board of Directors in one or more series and with the rights, privileges and limitations of the preferred stock determined by the Board of Directors. The rights, preferences, powers and limitations on different series of preferred stock may differ with respect to dividend rates, amounts payable on liquidation, voting rights, conversion rights, redemption provisions, sinking fund provisions, and other matters.

Series B Convertible Preferred Stock

The Company is authorized to issue one (1) share of Series B Convertible Preferred Stock with a stated value of $1.00 and a par value of $0.001. The terms of the Series B Preferred Stock are as follows:

(i)	Dividends – At issuance, there are no dividends due or payable on the Series B Preferred Stock. Any future terms with respect to dividends shall be determined by Board, consistent with the Company’s certificate of incorporation.

(ii)

Liquidation and Redemption Rights - In the event of any liquidation, dissolution or winding up of the affairs of the Company, whether voluntary or involuntary, the holder of Series B Preferred Stock is be entitled to receive assets of the Company, on parity with the holders Common Stock. The Series B Preferred shall not have any priority or preference with respect to any distribution of any Company assets.

(iii)

Rank – All shares of the Series B Preferred Stock rank:

a.	Senior to the Company’s common stock and any other class or series of capital stock of the Company subsequently created,

b.	Equal with any class or series of capital stock of the Company subsequently created,

c.	Junior to any class or series of capital stock of the Company subsequently created which are specifically designated to be ranked senior to the Series B Preferred Stock

(iv)

Upon an event of default in the convertible note payable executed in connection with the issuance of the share of Series B Preferred Stock, the share of Series B Preferred Stock has voting rights equal to the total issued and outstanding common stock eligible to vote at the time of the respective vote divided by forty nine one-hundredths (0.49) minus the total issued and outstanding shares of common stock eligible to vote at the time of the respective vote.

There were no shares of Series B Convertible Preferred Shares outstanding at any time during the year ended August 31, 2014. During the nine month period ended May 31, 2015, the Company issued one (1) share of Series B convertible preferred stock to a creditor in connection with the execution of a convertible note payable. In accordance with ASC 815 and ASC 470, the proceeds from the issuance of the convertible note payable were allocated between the embedded conversion option of the convertible note payable deemed to require derivative accounting due to its variable nature (as discussed in Note 9), and the host debt instrument and the preferred stock. The derivative was recorded at its fair value of $5,975 with the remaining proceeds of $1,000,000 being allocated between the preferred stock and host debt instrument based upon their relative fair values. The fair value of the preferred stock was determined by valuing the voting interest to which it would control upon default and then probability adjusting such valuation for the risk of default. The resulting allocation of proceeds attributed $118,024 to this preferred stock issuance.

Common Stock

During the nine month period ended May 31, 2015; the Company issued the following shares of its Common Stock:

·	In connection with the extension of certain agreements related to the reverse acquisition, the Company issued to certain shareholders of the Company, all of whom were shareholders prior to the reverse acquisition, 10,000 shares of common stock of the Company valued at $8,800. The value of the common stock was based on the market price of the stock on the date of issuance.

·	In connection with short-term loans made to the Company by two separate entities (one of which was repaid in full during the period ended May 31, 2015), the Company agreed that, for each two weeks that each such loan remains outstanding, the Company is required to issue 37,500 shares of its common stock - in addition to an initial grant of 37,500 shares to each lender. During the nine-month period ended May 31, 2015, the Company issued 1,074,844 shares valued at $965,017 in connection with these two loans. The value of the common stock was based on the market price of the stock on the date of issuance and has been recorded as interest expense in the Company’s statement of operations.

·	In connection with a short-term convertible loan made to the Company, the Company issued to the lenders 250,000 shares of the Company's common stock. On May 31, 2015, this note went into default due to non-payment and the Company issued an additional 150,000 shares of common stock to the lender to extend the maturity date.

·	The Company issued 2,283,547 shares of common stock to various entities and individuals for services valued at $983,023. The value of the common stock was based on the market price of the stock on the date of issuance.

During the year ended August 31, 2014, the Company issued 26,959,829 shares of common stock as follows:

Description	Shares Issued
Common stock issued for cash proceeds of $3,378,000		7,193,654
Common stock issued for services of $911,569		2,045,163
Cash received for exercise of options and warrants at $0.03 per share		3,909,226
Common stock issued for debt issuance costs		1,587,738
Common stock issued for debt modifications		1,373,914
Cash received and services credited for exercise of options and warrants at $0.03 per share		2,884,134
Common stock issued in reverse recapitalization		8,006,000
Total		26,959,829

NOTE 13—STOCK OPTIONS AND WARRANTS

Stock Options

During the nine month period May 31, 2015, the Company issued no new options to acquire its common stock.

During the year ended August 31, 2014, the Company granted 9,573,604 options to purchase common stock at $0.50 per share to the Company employees and consultants. 1,477,687 options vested immediately and 8,095,917 options vested 1/3 on each grant anniversary date for the subsequent three years. All options issued in 2014 expire on August 30, 2019. Subsequent to August 31, 2014, 100,000 of the nonvested options granted have been rescinded, thus, leaving 9,473,604 stock options outstanding and 1,477,686 stock options exercisable.

Stock compensation expense is recognized on a pro-rata basis over the vesting period of the options. During the nine month period ended May 31, 2015 the Company recognized $2,491,149 in compensation expense arising from options issued, leaving $7,428,969 of compensation expense on stock options to be recognized subsequent to May 31, 2015.

Warrants

During the nine months ended May 31, 2015, the Company issued 2,200,000 warrants to creditors to acquire its common stock:

·	1,950,000 to the Company's lender that has a first lien on all of the Company's assets - in connection with: (i) its December 2014 additional advance (1,450,000 Warrants exercisable at $0.84 per share) and (ii) its January 2015 loan modification in connection with the TCA loan (500,000 Warrants exercisable at $0.50 per share),

·	250,000 exercisable at $0.50 per share to a Director in connection with advances he made to the Company,

·	250,000 exercisable at $0.50 per share to an employee in connection with services rendered, and

·	692,521 exercisable at $0.72 per share to a debt holder for maturity date extensions.

In applying the Black-Scholes options pricing model to the options and warrant grants, the fair value of our share-based awards granted were estimated using the following assumptions for the periods indicated below:

	May 31, 2015

Risk-free interest rate		1.39	%
Expected options life		2.50
Expected dividend yield		-
Expected price volatility		173	%

A summary of the status of the Company’s stock options as of May 31, 2015 and changes during the period ended May 31, 2015 is presented below:

	Number of Options and Warrants

Outstanding at August 31, 2014		9,573,604

Options and warrants granted		3,142,512
Options and warrants exercised		-
Options and warrants forfeited or expired		(100,000	)
Outstanding at May 31, 2015		12,616,125
Exercisable at May 31, 2015		4,620,207

The following table summarizes information about options and warrants as of May 31, 2015:

Range of Exercise Prices	Number Outstanding	Weighted Average Remaining Contractual Life	Weighted Average Exercise Price	Number Exercisable	Weighted Average Exercise Price
$0.00 - $0.40	500,000	4.65	$0.40	500,000	$0.40
$0.41 - $0.60	9,723,604	4.23	$0.50	1,727,686	$0.50
$0.61 and up	2,142,521	4.49	$0.80	2,142,521	$0.80
	12,616,125	4.29	$0.55	4,620,207	$0.63

NOTE 14—SUBSEQUENT EVENTS

Store Closings

On March 13, 2015, the Company closed its Capriotti's Sandwich Shop in San Marcos, California. On April 8, 2015, the Company closed its Capriotti's Sandwich Shop in San Diego, California. Neither location was profitable. The Company currently is exploring alternative restaurant concepts for those locations.

Capriotti's Relationship

On June 29, 2015, the Company consummated an agreement with Capriotti's Sandwich Shops, Inc., the franchisor of the Company's Capriottti's Sandwich Shops, whereby:

·	Capriotti's Sandwich Shops, Inc. and the Company have agreed to terminate the Franchise Agreements and Area Development Agreements between these two parties;

·	the Company will continue to operate its existing Capriotti's Sandwich Shops during a mutually-agreed transition period, and

·	the Company will have an agreed time-frame to either sell its existing Capriotti's Sandwich Shops (some of which Capriotti's Sandwich Shops, Inc. has expressed interest in acquiring) or convert some of them to restaurants not under the Capriotti’s brand but under a brand proprietary to the Company.

Financing-Related Transactions

Subsequent to quarter end, the Company received $660,000 in EB-5 funding from two investors, $120,000 of which amounts to deposits for legal and other expenses to be remitted by the Company on behalf those investors. The Company also received a advance in the amount of $250,000 from a relative of another, pending EB5 investor. Such advance (to be treated as a bridge loan) is due to be repaid, along with interest @ 8.0%, on or before June 30, 2015.

Subsequent to May 31, 2015, the Company entered into a $190,000 short term loan, convertible under certain circumstances into shares of the Company's Common Stock. This loan was issued with a $40,000 original issue discount - to be charged as interest expense over the life of the loan. As additional consideration for this loan the Company issued to the lenders 250,000 shares of the Company's Common Stock. The Company subsequently issued an additional 150,000 shares of the Company's Common Stock to that lender in consideration of its extension of the maturity date. This loan was repaid out of proceeds of the loan noted immediately below.

On June 2, 2015, the Company entered into an agreement with an existing financing source pursuant to which the Company received $178,000 and agreed to repay that amount of principal balance plus an additional $78,320 (for total remittance of $256,320) by remitting to the lender 16% of all future receivables arising from credit card, debit card and prepaid transactions from some of its bank account until such time as the total remittance is paid in full. The additional $78,320 will be recognized as interest expense over the estimated term of the agreement. The term is not fixed due to the variable repayment terms; however, management currently estimates such term to be less than one year. Note that, out of the proceeds of this funding, as well as Company funds, the Company repaid the $190,000 short term loan noted immediately above.

On June 15, 2015, the Company entered into another $190,000 short term loan, convertible under certain circumstances into shares of the Company's Common Stock with the same lender as the loan noted two paragraphs above. Stock. This loan was issued with a $40,000 original issue discount - to be charged as interest expense over the life of the loan. As additional consideration for this loan the Company issued to the lenders 400,000 shares of the Company's Common Stock.

In March of 2015, the Company granted 361,759 shares of Common Stock to CEO Ken Antos in connection with both: investments he'd previously made to the Company and third-party loans guaranteed by Antos. This grant was on terms consistent with similar, prior transactions.

On June 29, 2015, On June 29, 2015, the Company entered into a short term loan agreement with the relative of a pending EB5 subscriber pursuant to which he advanced to the Company $235,000. The loan, plus interest @ 8.0%, is repayable August 1, 2015.

On June 30, 2015, the Company entered into an agreement with a new financing source pursuant to which the Company received $71,000 and agreed to repay that amount of principal balance plus an additional $26,980 (for total remittance of $97,980) by remitting to the lender 16% of all future receivables arising from credit card, debit card and prepaid transactions from one of its subsidiary bank account until such time as the total remittance is paid in full. The additional $26,980 will be recognized as interest expense over the estimated term of the agreement. The term is not fixed due to the variable repayment terms; however, management currently estimates such term to be less than six months.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

FORWARD LOOKING INFORMATION

The following discussion and analysis of the Company’s financial condition and results of operations should be read with the condensed financial statements and related notes contained in this quarterly report on Form 10-Q (“Form 10-Q”). All statements other than statements of historical fact included in this Form 10-Q are, or may be deemed to be, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements involve known and unknown risks, uncertainties and other factors that may cause the Company's actual results, levels of activity, performance or achievements to be materially different than any expressed or implied by these forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential," "continue," or the negative of these terms or other comparable terminology. Important factors that could cause actual results to differ materially from those discussed in such forward-looking statements include: 1. General economic factors including, but not limited to, changes in interest rates and trends in disposable income; 2. Information and technological advances; 3. Cost of products sold; 4. Competition; and 5. Success of marketing, advertising and promotional campaigns. The Company is subject to specific risks and uncertainties related to its business model, strategies, markets and legal and regulatory environment. You should carefully review the risks described in this Form 10-Q and in other documents the Company files from time to time with the SEC. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this Form 10-Q. The Company undertakes no obligation to publicly release any revisions to the forward-looking statements to reflect events or circumstances after the date of this document.

OVERVIEW

Business

The Company was formed in May 2010 as Dixie Foods International, Inc. to operate a specialty food business for salad dressing, sauces and condiments. The Company was organized and still operates under the laws of the State of Florida. In November of 2014, the Company changed its name to “Preferred Restaurant Brands” and recently completed the necessary documents with the FINRA, the SEC and other relevant regulatory authorities to effect this change. The Company's common stock now trades under the stock symbol "PRBI". The Company’s fiscal year-end is August 31. The Company operates from offices at 4033 South Dean Martin Drive; Las Vegas, NV 89013; and, its phone number is (702) 834-7101.

On January 6, 2012, the Company formed Dixie Sauce Co, Inc. (“Dixie Sauce”) as a wholly-owned subsidiary of the Company and transferred all assets and liabilities related to its specialty foods business to this subsidiary. Dixie Sauce currently conducts no operations.

Acquisition

On June 4, 2014, the Company completed the purchase (the “Reverse Acquisition”) of KCI Investments, LLC (“KCI”). In connection with the Reverse Acquisition, the Company acquired 100% of the issued and outstanding membership interests of KCI from KCI Holding I, LLC ("KCI Holding"), an entity that, until the consummation of the Reverse Acquisition, held 100% of the membership interests in KCI.

In exchange for the purchase of KCI by the Company, the Company issued to KCI Holding an aggregate of 34,508,976 shares of the Company's common stock. In addition, KCI Holding purchased and acquired from certain shareholders of the Company an aggregate of 6,305,400 shares of the Company's issued and outstanding common stock. As a result of the Reverse Acquisition, KCI became a wholly-owned subsidiary of the Company, and KCI Holding became a stockholder of the Company owning an aggregate of 40,814,376 shares of the Company's common stock, representing 96% of our issued and outstanding shares of common stock as of that date.

KCI’s Co-Manager and Chief Executive Officer, Ken Antos, now also serves as Chief Executive Officer and as Chairman of the Board of Directors of the Company. KCI’s Chief Financial Officer, Richard Groberg, now serves as the Company's Vice President, Chief Financial Officer and Board Secretary.

KCI Investments, LLC

KCI Investments, LLC, a Nevada limited liability company headquartered in Las Vegas, Nevada, was formed on November 8, 2004, but did not engage in any business operations until November 2010. Currently, KCI is engaged in developing, owning and operating a multi-brand chain of restaurants, currently under two franchise brands: Capriotti’s Sandwich Shops and Papa John’s. KCI also owns, operates and/or is developing various other restaurant concepts. KCI and its various subsidiaries, currently operate 17 restaurants:

·	9, franchised Capriotti's Sandwich Shops;

·	six (6) franchised Papa John's pizza shops: two of which it opened during the first quarter of fiscal 2015; two of which it opened December 27, 2014 and two of which it acquired on February 17, 2015), and

·	two proprietary, fine casual restaurants: Elements Kitchen & Martini Bar and Social Bistro & Wine Bar.

Additionally, the Company has in various stages of development and construction eight Papa John’s - all of which it anticipates opening over the next 12 months – subject to access to additional financing.

Location

Fixed Year (August 31, FYE)	2011	2012	2013	2014	Q1 2015	Q2 2015	Q3 2015

Opened in Period	0	3	5	4	2	2	1
Acquired in Period	0	1	1	0	0	2	0
Total Added In Year	0	4	6	4	2	4	1

Cumulative Added	0	4	10	14	16	20	21

Closed in Period	0	0	0	0	1	1	2
Cumulative Closed	0	0	0	0	1	2	4

Total Open	0	4	10	14	15	18	17

Results of Operations

Three months ended May 31, 2015 vs. May 31, 2014

Income from Restaurant Operations

Largely resulting from Revenue growth and Management’s continues to focus on tightening cost controls and selling higher margin item, the Company recognized Income from restaurant operations of $225,780 Q3-15 compared with a net loss from restaurant operations of $32,656 during Q3-14.

Revenue

During the three months ended May 31, 2015 (“Q3-15”), the Company reported Revenues of $2,185,433, up 18.1% from Revenues of $1,851,020 during the three months ended May 31, 2014 (“Q3-14”) and up 12.7% from Revenues of $1,939,412 in Q2-15, This growth resulted mainly from the impact of the PJ's Additions and two additional Capriotti's opened in 1st9-15 - more than offsetting: (i) the loss of Revenues from the four Capriotti's locations not operating during the Q3-15 but operating during the Q3-14 and (ii) lower same store sales ("SSS") growth. With regard to lower SSS, note that in the Q3-14 period, the Company utilized Groupon and other promotional efforts to gain brand awareness. These programs did generate additional sales; however, they were not profitable. Thus, the Company did not repeat these programs during Q3-15.

Food, Beverage and Packaging

Food, beverage and packaging expenses decreased to $689,944 (31.6% of Revenues) in Q3-15 from $960,394 (51.9% of Revenues) in Q3-14. This improvement, in absolute dollars and as a percentage of Revenues resulted from Management’s continued to focus on tightening cost controls and selling higher margin items.

Labor and Related

Labor and related expenses increased to $829,004 (37.9% of Revenues) in Q3-15, up from $514,259 (27.8% of Revenues) in Q3-14, largely because of the impact of labor for new locations, which must maintain minimum staffing levels during their ramp-up period, as well overall management for the Papa John’s brand. Note though that Labor and related expenses were improved from Q2-15 levels (38.8% of Revenues) due to significant reductions in payroll at the Company’s Capriotti’s locations and post-grand opening stabilization of the labor at the Company’s Papa John’s locations

Occupancy

Occupancy expenses decreased to $169,607 (7.8% of Revenues) in Q3-15, from $164,579 (8.9% of Revenues) in Q3-14, due largely to the improving performances of operating locations (all of which had high occupancy costs relative to Revenues).

Other Restaurant Expenses

Other restaurant expenses increased to $271,098 (12.4% of Revenues) in Q3-15, from $179,132 (9.7% of Revenues) in Q3-14, resulting largely from fixed costs associated with the Papa John’s locations.

General and Administrative,

The Company recorded general and administrative expenses of $2,401,136 in Q3-15 compared to $131,088 in Q3-14,. The increase from resulted largely from: (i) nonrecurring and/or noncash expenses related to fees paid in equity for professional services rendered; and (ii) the value of the vesting of options previously granted.

Depreciation

Depreciation and amortization decreased to $135,416 in Q3-15, from $239,112 in Q3-14, due to the impact on depreciation from write offs related to locations closed more than offsetting new depreciation related to new and pending restaurant openings.

Pre-opening Expenses

Pre-opening expenses equaled $35,573 in Q3-15, up from $8,512 in Q3-14, but down significantly from prior quarters of fiscal 2015 as the Company did not open any new locations other than its Social Bistro in April and, thus, didn’t incur significant Pre-opening Expenses.

Other Income and Expense

Total other expenses were $143,600 in Q3-15, compared to other expense of $80,679 in Q3-14, as Interest Expenses of $874,664 were partially offset by $688,197 of Derivative Gains.

Net Loss

As a result, the Company incurred a net loss of $2,489,945 during the three months ended May 31, 2015 compared to a net loss of $426,735 during the three months ended May 31, 2014.

Nine months ended May 31, 2015 vs May 31, 2014

Revenue

During the nine months ended May 31, 2015 (“1st9-15”), the Company reported Revenues of $6,110,079, up 36.7% from Revenues of $4,468,839 for the nine months ended May 31, 2014 (“1st9-14). This growth resulted mainly from the impact of the six additional Papa John's locations opened and acquired between October 2014 and February 2015 and two additional Capriotti's open during all of 1st9-15 but only partially during 1st9-14 - more than offsetting: (i) the loss of Revenues from the four Capriotti's locations not operating during the 1st9-15 but operating during the 1st9-14 and (ii) lower Same Store Sales growth ("SSS": growth of Revenues for restaurants open during the comparable periods). With regard to lower same store sales, note that in the 1st9-14 period, the Company utilized Groupon and other promotional efforts to gain brand awareness. These programs did generate additional sales; however, they were not profitable. Thus, the Company did not repeat these programs during the 1st9-15.

Food, Beverage and Packaging

Food, beverage and packaging expenses increased to $2,238,728 (36.5% of Revenues) in 1st9-15, up from $1,915,101 (42.9% of Revenues) in 1st9-14. While the total increased, it decreased as a percentage of Revenues as Management continues to focus on tightening cost controls and selling higher margin items.

Labor and Related

Labor and related expenses increased to $2,227,821 (36.5% of Revenues) in 1st9-15, up from $1,204,159 (26.9% of Revenues) in 1st9-14, largely because of the impact of labor for new locations, which must maintain minimum staffing levels during their ramp-up period, especially during grand opening promotions.

Occupancy

Occupancy expenses increased to $964,921 (15.8% of Revenues) in 1st9-15, up from $461,053 (10.3% of Revenues) in 1st9-14, also largely because of the burden of fixed rent and related overhead related to the new locations.

Other Restaurant Expenses

Other restaurant expenses increased to $1,435,933 (23.5% of Revenues) in 1st9-15, up from $710,601 (15.9% of Revenues) in 1st9-14, resulting largely from: significantly increased depreciation expenses and from largely nonrecurring marketing expenses related to the new locations.

Net Loss from Restaurant Operations

As a result, the Company incurred a Net loss from restaurant operations of $757,324 during the nine months ended May 31, 2015 compared to income from restaurant operations of $177,925 during the nine months ended May 31, 2014.

General and Administrative

The Company recorded general and administrative expenses of $7,022,470 in 1st9-15 compared to $1,193,936 in 1st9-14, resulting largely from: (i) nonrecurring and/or noncash expenses related to fees paid in equity for professional services rendered; and (ii) the value of the vesting of options previously granted.

Depreciation

Depreciation and amortization decreased to $341,435 in 1st9-15, down from $359,079 in 1st9-14, due to the impact on depreciation from write offs related to locations closed more than offsetting new depreciation related to new and pending restaurant openings.

Pre-opening Expenses

Pre-opening expenses increased to $508,977 in 1st9-15, up from $318,072 in 1st9-14 as a result of new restaurant openings.

Other Income and Expense

Total other income and expenses were $4,283,231 in 1st9-15, up from $84,981 in 1st9-14, due to an increase in interest expenses stemming from: (i) increases in interest bearing notes to fund operations and (ii) significant noncash charges related to the value of warrants and equity granted in connection with loans and extensions and modifications thereto. This increase was offset in part by a gain on changes in derivative liabilities of $1,496,437.

Net Loss

As a result, the Company incurred a net loss of $12,913,437 during the nine months ended May 31, 2015 compared to a net loss of $1,878,143 during the nine months ended May 31, 2014.

Liquidity and Capital Resources

During the nine months ended May 31, 2015, the Company's working capital deficit increased $6,518,801 to $14,894,867, from a deficit of $8,376,066 at August 31, 2014. The primary reasons for the increase in the working capital deficit were: (i) increased short term debt and payables resulting from delays in receiving subscribed financings and the cost of opening new locations, and (ii) the recognition of derivative liabilities related to certain equity issuances.

Cash Flows

Net cash used in operating activities was $3,129,673 during the nine months ended May 31, 2015, largely due to the reported net loss of $12,913,437, which was partially offset by various noncash items including: Depreciation and amortization; Loss on sale of assets; Amortization of debt discounts and debt issuance costs; Change in derivative liability, Stock issued in connection with execution of notes payable, Vesting of stock options granted and Common stock issued for services. During this period, net cash used in investing activities was $1,479,563, mostly related to the construction and acquisition of new restaurants, offset by the sale of one store for cash. Cash used in operating and investing activities was offset by $4,619,444 in Net Cash Provided by Financing Activities, which included approximately $2.1 million net proceeds from new debt (after debt repayments) and $2.5million of proceeds from the sale of Class B membership units in the Company’s EB-5-financed subsidiaries.

Recent Financing Transactions

During the three months ended May 31, 2015, the Company secured additional debt funds to support ongoing operations. On February 17, 2015, the Company borrowed $1,000,000 from TCA Global Credit Master Fund LLC 1 ("TCA"). The "TCA Loan" bears interest @ 12% per annum and has and original maturity date of February 17, 2016. The TCA Loan is scheduled to amortize monthly over one year. The Company utilized the proceeds of the TCA Loan, net of related transaction fees, to: fund the acquisition of two Papa John's locations; repay some obligations, and provide additional working capital.

Also, as noted above in Section 10: Subsequent Events, subsequent to quarter-end:

·	The Company received $660,000 in EB-5 funding from two investors, $120,000 of which amounts to deposits for legal and other expenses to be remitted by the Company on behalf those investors. The Company also received a advance in the amount of $250,000 from a relative of another, pending EB5 investor. Such advance (to be treated as a bridge loan) is due to be repaid, along with interest @ 8.0%, on or before June 30, 2015.

·	The Company entered into a $190,000 short term loan, convertible under certain circumstances into shares of the Company's Common Stock. This loan was issued with a $40,000 original issue discount - to be charged as interest expense over the life of the loan. As additional consideration for this loan the Company issued to the lenders 250,000 shares of the Company's Common Stock. The Company subsequently issued an additional 150,000 shares of the Company's Common Stock to that lender in consideration of its extension of the maturity date.

·	The Company entered into an agreement with an existing financing source pursuant to which the Company received $178,000 and agreed to repay that amount of principal balance plus an additional $78,320 (for total remittance of $256,320) by remitting to the lender 16% of all future receivables arising from credit card, debit card and prepaid transactions from some of its bank account until such time as the total remittance is paid in full. The additional $78,320 will be recognized as interest expense over the estimated term of the agreement. The term is not fixed due to the variable repayment terms; however, management currently estimates such term to be less than one year. Note that, out of the proceeds of this funding, as well as Company funds, the Company repaid the $190,000 short term loan noted immediately above.

·	The Company entered into another $190,000 short term loan, convertible under certain circumstances into shares of the Company's Common Stock with the same lender as the loan noted two paragraphs above. Stock. This loan was issued with a $40,000 original issue discount - to be charged as interest expense over the life of the loan. As additional consideration for this loan the Company issued to the lenders 400,000 shares of the Company's Common Stock.

·	The Company entered into a short term loan agreement with the relative of a pending EB5 subscriber pursuant to which he advanced to the Company $235,000. The loan, plus interest @ 8.0%, is repayable August 1, 2015.

·	The Company entered into an agreement with a new financing source pursuant to which the Company received $71,000 and agreed to repay that amount of principal balance plus an additional $26,980 (for total remittance of $97,980) by remitting to the lender 16% of all future receivables arising from credit card, debit card and prepaid transactions from one of its subsidiary bank account until such time as the total remittance is paid in full. The additional $26,980 will be recognized as interest expense over the estimated term of the agreement. The term is not fixed due to the variable repayment terms; however, management currently estimates such term to be less than six months.

Recent Acquisitions

Off Balance Sheet Arrangements

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

Critical Accounting Policies and Estimates

Management’s discussion and analysis of its financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates, including those related to the reported amounts of revenues and expenses and the valuation of our assets and contingencies. We believe our estimates and assumptions to be reasonable under the circumstances. However, actual results could differ from those estimates under different assumptions or conditions. Our financial statements are based on the assumption that we will continue as a going concern. If we are unable to continue as a going concern we would experience additional losses from the write-down of assets.

Going Concern

The continuation of the Company as a going concern is dependent upon the continued financial support from its management, and its ability to: identify future investment opportunities and obtain the necessary debt or equity financing and generate profitable operations from the Company’s future operations. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management's plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.

New Accounting Pronouncements

The company has adopted all recently issued accounting pronouncements. The adoption of the accounting pronouncements, including those not yet effective, is not anticipated to have a material effect on the financial position or results of operations of the Company.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

As a "smaller reporting company" defined in Item 10(f)(1) of Regulation S-K, we are electing scaled disclosure reporting obligations and therefore are not required to provide the information requested by this item.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended, as of November 30, 2014. Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded such controls and procedures were not effective as of November 30, 2014 to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Act is recorded, processed, summarized and reported within the time periods specified in the Commission's rules and forms and to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Changes in internal control over financial reporting

There were no changes in our internal controls over financial reporting that occurred during the quarter ended November 30, 2014 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

We are currently not a party to any pending legal proceeding. From time to time, we may receive claims of and become subject to routine litigation that is incidental to the business.

Item 1A. Risk Factors

Item 2. Unregistered Sale of Equity Securities and Use of Proceeds

Unregistered Sale of Equity Securities

During the nine month period ended May 31, 2015; the Company issued the following shares of its Common Stock:

·	In connection with the extension of certain agreements related to the reverse acquisition, the Company issued to certain shareholders of the Company, all of whom were shareholders prior to the reverse acquisition, 10,000 shares of common stock of the Company valued at $8,800. The value of the common stock was based on the market price of the stock on the date of issuance.

·	In connection with short-term loans made to the Company by two separate entities (one of which was repaid in full during the period ended May 31, 2015), the Company agreed that, for each two weeks that each such loan remains outstanding, the Company is required to issue 37,500 shares of its common stock - in addition to an initial grant of 37,500 shares to each lender. During the nine-month period ended May 31, 2015, the Company issued 1,074,844 shares valued at $965,017 in connection with these two loans. The value of the common stock was based on the market price of the stock on the date of issuance and has been recorded as interest expense in the Company’s statement of operations.

·	In connection with a short-term convertible loan made to the Company, the Company issued to the lenders 250,000 shares of the Company's common stock. On May 31, 2015, this note went into default due to non-payment and the Company issued an additional 150,000 shares of common stock to the lender to extend the maturity date.

·	The Company issued 2,283,547 shares of common stock to various entities and individuals for services valued at $983,023. The value of the common stock was based on the market price of the stock on the date of issuance.

The sales were exempt from registration under Section 4(A)(2) of the Securities Act of 1933. The securities were not offered publicly.

Item 3. Defaults upon Senior Securities

None other than as disclosed herein.

Item 4. Mine Safety Disclosures

Not applicable

Item 5. Other Information

None

Item 6. Exhibits

4.25	RBB Note and Securities Purchase Agreement

4.26	New Caprock Loan

4.27	2nd Convertible Promissory Note

4.28	Xiao Bridge Loans (includes most recent and April Loan documents)

4.35	Rapid Advance Loan

10.354	Capriotti’s Corp Termination Agreement

31.1	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1	Certification Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS	XBRL Instance Document.

101.SCH	XBRL Taxonomy Extension Schema Document.

101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB	XBRL Taxonomy Extension Labels Linkbase Document.

101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.

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 thereunto duly authorized.

Dated: August 19, 2015	PREFERRED RESTAURANT BRANDS, INC.

	/s/ KENNETH ANTOS
	Kenneth Antos,
	President and Chief Executive Officer
	(Principal Executive Officer)

Exhibit 4.31

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

Principal Amount: $190,000

Date: April 21, 2015

CONVERTIBLE PROMISSORY NOTE

Dixi Foods International, Inc., (hereinafter called the "Company" or "DJXI"), hereby promises to pay to the order of RBB Capital, LLC, a Delaware Limited Liability Company, or its registered assigns (the "Holder") the sum of $190,000, together with any interest as set forth herein, on or before May 29, 2015 (the "Maturity Date").

Any amount of principal or interest on this Note which is not paid when due shall bear interest at the rate of twenty two percent (22%) per annum from the due date thereof until the same is paid ("Default Interest"). Interest shall commence accruing on the date that the Note is fully paid and shall be computed on the basis of a 365-day year and the actual number of days elapsed. All payments due hereunder (to the extent not converted into common stock) shall be made in lawful money of the United States of America.

All payments shall be made at such address as the Holder shall hereafter give to the Company by written notice made in accordance with the provisions of this Note. Whenever any amount expressed to be due by the terms of this Note is due on any day which is not a business day, the same shall instead be due on the next succeeding day which is a business day and, in the case of any interest payment date which is not the date on which this Note is paid in full, the extension of the due date thereof shall not be taken into account for purposes of determining the amount of interest due on such date. As used in this Note, the term "business day" shall mean any day other than a Saturday, Sunday or a day on which commercial banks in the city of New York, New York are authorized or required by law or executive order to remain closed.

Each capitalized term used herein, and not otherwise defined, shall have the meaning ascribed thereto in the supporting documents of same date (attached hereto).

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

The following terms shall apply to this Note:

ARTICLE 1. CONVERSION RlGHTS

1.1 Optional Conversion. Following any Event of Default, the Holder shall have the right to convert all or any part of the outstanding and unpaid principal amount of this Note into fully paid and non- assessable shares of Common Stock, as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities of the Company into which such Common Stock shall hereafter be changed or reclassified at the conversion price (the "Conversion Price") determined as provided herein (a "Conversion"); provided, however, that in no event shall the Holder be entitled to convert any portion of this Note in excess of that portion of this Note upon conversion of which the sum of (I) the number of shares of Common Stock beneficially owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unconverted portion of the Notes or the unexercised or unconverted portion of any other security of the Company subject to a limitation on conversion or exercise analogous to the limitations contained herein) and (2) the number of shares of Common Stock issuable upon the conversion of the portion of this Note with respect to which the determination of this proviso is being made, would result in beneficial ownership by the Holder and its affiliates of more than 4.99% of the outstanding shares of Common Stock. For purposes of the proviso to the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and Regulations 13D-G thereunder, except as otherwise provided in clause (l) of such proviso, provided, further, however, that the limitations on conversion may be waived by the Holder upon, at the election of the Holder, not less than 61 days' prior notice to the Company, and the provisions of the conversion limitation shall continue to apply until such 61 st day (or such later date, as determined by the Holder, as may be specified in such notice of waiver). The number of shares of Common tock to be issued upon each conversion of this Note shall be determined by dividing the Conversion Amount (as defined below) by the applicable Conversion Price then in effect on the date specified in the notice of conversion, (the "Notice of Conversion"), delivered to the Company by the Holder in accordance with the Sections below; provided that the Notice of Conversion is submitted by facsimile or e-mail (or by other means resulting in, or reasonably expected to result in, notice) to the Company before 6:00 p.m., New York, New York time on such conversion date (the"Conversion Date").

The term "Conversion Amount" means, with respect to any conversion of this Note, the sum of(1) the principal amount of this Note to be converted in such conversion plus (2) at the Company's option, accrued and unpaid interest, if any, on such principal amount at the interest rates provided in this Note to the Conversion Date, (3) at the Company's option, Default Interest, if any, on the amounts referred to in the immediately preceding clauses (1) and/or (2) plus. (4) at the Holder's option, any amounts owed to the Holder.

1.2 Conversion Price.

(a) Calculation of Conversion Price. Holder, at its discretion, shall have the right to convert this Note in its entirety or in partes) into common stock of the Company valued at the lower of (i) .0001 or (ii) a Fifty Percent (50%) discount off of the lowest intra-day trading price for the Company's common stock during the Ten (10) trading days immediately preceding a conversion date, as reported by Quotestream.

(b) Conversion Price During Major Announcements. Notwithstanding anything contained in the preceding section to the contrary, in the event the Company (i) makes a public announcement that it intends to consolidate or merge with any other corporation (other than a merger inwhich the Company is the surviving or continuing corporation and its capital stock is unchanged) or sell or transfer all or substantially all of the assets of the Company or (ii) any person, group or entity (including the Company) publicly announces a tender offer to purchase 50% or more of the Company's Common Stock (or any other takeover scheme) (the date of the announcement referred to in clause (i) or (ii) is hereinafter referred to as the "Announcement Date"), then the Conversion Price shall, effective upon the Announcement Date and continuing through the Adjusted Conversion Price Termination Date (as defined below), be equal to the lower of (x) the Conversion Price which would have been applicable for a Conversion occurring on the Announcement Date and (y) the Conversion Price that would otherwise be in effect. From and after the Adjusted Conversion Price Termination Date, the Conversion Price shall be determined as set forth in this Section. For purposes hereof, "Adjusted Conversion Price Termination Date" shall mean, with respect to any proposed transaction or tender offer (or takeover scheme) for which a public announcement as contemplated by this Section has been made, the date upon which the Company (in the case of clause (i) above) or the person, group or entity (in the case of clause (ii) above) consummates or publicly announces the termination or abandonment of the proposed transaction or tender offer (or takeover scheme) which caused this Section 1.2(b) to become operative.

1.3 Authorized Shares. The Company covenants that during the period the conversion right exists the Company will reserve from its authorized and unissued Common Stock a sufficient number of shares, free from preemptive rights, to provide for the issuance of Common Stock upon the full conversion of this Note. The Company is required at all times to have authorized and reserved five times the number of shares that is actually issuable upon full conversion of the Note (based on the Conversion Price of the Notes in effect from time to time)(the "Reserved Amount"). The Reserved Amount shall be increased from time to time in accordance with the Company's obligations.

The Company represents that upon issuance, such shares will be duly and validly issued, fully paid and non-assessable. In addition, if the Company shall issue any securities or make any change to its capital structure which would change the number of shares of Common Stock into which the Notes shall be convertible at the then current Conversion Price, the Company shall at the same time make proper provision so that thereafter there shall be a sufficient number of shares of Common Stock authorized and reserved, free from preemptive rights, for conversion of the outstanding Notes.

The Company (i) acknowledges that it will irrevocably instruct its transfer agent to issue certificates for the Common Stock issuable upon conversion of this Note, and (ii) agrees that its issuance of this Note shall constitute full authority to its officers and agents who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for shares of Common Stock in accordance with the terms and conditions of this Note.

If, at any time the Company does not maintain the Reserved Amount it will be considered an Event of Default as defined in this Note.

1.4 Method of Conversion.

(a) Mechanics of Conversion. This Note may be converted by the by (A) submitting to the Company a Notice of Conversion (by facsimile, e-mail or other reasonable means of communication dispatched on the Conversion Date prior to 6:00 p.m., New York, New York time).

(b) Surrender of Note Upon Conversion. Notwithstanding anything to the contrary set forth herein, upon conversion of this Note in accordance with the terms hereof, the Holder shall not be required to physically surrender this Note to the Company unless the entire unpaid principal amount of this Note is so converted. The Holder and the Company shall maintain records showing the principal amount so converted and the dates of such conversions or shall use such other method, reasonably satisfactory to the Holder and the Company, so as not to require physical surrender of this Note upon each such conversion. In the event of any dispute or discrepancy, such records of the Company shall,primajacie, be controlling and determinative in the absence of manifest error. The Holder and any assignee, by acceptance of this Note, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of a portion of this Note, the unpaid and unconverted principal amount of this Note represented by this Note may be less than the amount stated on the face hereof.

(c) Payment of Taxes. The Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the issue and delivery of shares of Common Stock or other securities or property on conversion of this Note in a name other than that of the Holder (or in street name), and the Company shall not be required to issue or deliver any such shares or other securities or property unless and until the person or persons (other than the Holder or the custodian in whose street name such hares are to be held for the Holder's account) requesting the issuance thereof shall have paid to the Company the amount of any such tax or shall have established to the satisfaction of the Company that such tax has been paid.

(d) Delivery of Common Stock Upon Conversion. Upon receipt by the Company from the Holder of a facsimile transmission or e-mail (or other reasonable means of communication) of a Notice of Conversion meeting the requirements for conversion as provided in this Section, the Company shall issue and deliver or cause to be issued and delivered to or upon the order of the Holder certificates for the Common Stock issuable upon such conversion within three (3) business days after such receipt (the "Deadline") (and, solely in the case of conversion of the entire unpaid principal amount hereof, surrender of this Note) in accordance with the terms hereof and the Purchase Agreement.

Within Five (5) business days of having received certificate(s) for common stock pursuant to a Notice of Conversion, Holder may elect to rescind the Notice of Conversion and return the shares, at Holder's expense, to the Company's Transfer Agent. In the event of such rescission, the principal amount outstanding under this Note shall be adjusted to include the Conversion Amount which was deducted from the Note as part of the rescinded Notice of Conversion.

(e) Obligation of Company to Deliver Common Stock. Upon receipt by the Company of a Notice of Conversion, the Holder shall be deemed to be the holder of record of the Common Stock issuable upon such conversion, the outstanding principal amount and the amount of accrued and unpaid interest on this Note shall be reduced to reflect such conversion, and, unless the Company defaults on its obligations under this Article I, all rights with respect to the portion of this Note being so converted shall forthwith terminate except the right to receive the Common Stock or other securities, cash or other assets, as herein provided, on such conversion. If the Holder shall have given a Notice of Conversion as provided herein, the Company's obligation to issue and deliver the certificates for Common Stock shall be absolute and unconditional, irrespective of the absence of any action by the Holder to enforce the same, any waiver or consent with respect to any provision thereof, the recovery of any judgment against any person or any action to enforce the same, any failure or delay in the enforcement of any other obligation of the Company to the holder of record, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder of any obligation to the Company, and irrespective of any other circumstance which might otherwise limit such obligation of the Company to the Holder in connection with such conversion. The Conversion Date specified in the Notice of Conversion shall be the Conversion Date so long as the Notice of Conversion is received by the Company before 6:00 p.m., New York, New York time, on such date.

(f) Delivery of Common Stock by Electronic Transfer. In lieu of delivering physical certificates representing the Common Stock issuable upon conversion, provided the Company is participating in the Depository Trust Company ("DTC") Fast Automated Securities Transfer ("FAST") program, upon request of the Holder and its compliance with the provisions contained in Section 1.1 and in this Section 1.4, the Company shall use its best efforts to cause its transfer agent to electronically transmit the Common Stock issuable upon conversion to the Holder by crediting the account of Holder's Broker with DTC through its Deposit Withdrawal Agent Commission ("OW AC") system.

(g) Failure to Deliver Common Stock Prior to Deadline. Without in any way limiting the Holder's right to pursue other remedies, including actual damages and/or equitable relief, the parties agree that if delivery of the Common Stock issuable upon conversion of this Note is not delivered by the Deadline the Company shall pay to the Holder $2,000 per day in cash, for each day beyond the Deadline that the Company fails to deliver such Common Stock. Such cash amount shall be paid to Holder by the fifth day of the month following the month in which it has accrued or, at the option of the Holder (by written notice to the Company by the first day of the month following the month in which it has accrued), shall be added to the principal amount of this Note, in which event interest shall accrue thereon in accordance with the terms of this Note and such additional principal amount shall be convertible into Common Stock in accordance with the terms of this Note. The Company agrees that the right to convert is a valuable right to the Holder. The damages resulting from a failure, attempt to frustrate, interference with such conversion right are difficult if not impossible to qualify. Accordingly the parties acknowledge that the liquidated damages provision contained in this Section are justified. Any delay or failure of performance by the Company hereunder shall be excused if and to the extent caused by Force Majeure. For purposes of this agreement, Force Majeure shall mean a cause or event that is not reasonably foreseeable and/or caused by the Company, including acts of God, fires, floods, explosions, riots wars, hurricanes, etc.

1.5 Concerning the Shares. The shares of Common Stock issuable upon conversion of this Note may not be sold or transferred unless (i) such shares are sold pursuant to an effective registration statement under the Act or (ii) the Company or its transfer agent shall have been furnished with an opinion of counsel (which opinion shall be in form, substance and scope customary for opinions of counsel in comparable transactions) to the effect that the shares to be sold or transferred may be sold or transferred pursuant to an exemption from such registration or (ii i) such shares are sold or transferred pursuant to Rule 144 under the Act (or a successor rule) ("Rule 144") or (iv) such shares are transferred to an "affiliate" (as defined in Rule 144) of the Company who agrees to sell or otherwise transfer the shares only in accordance with this Section 1.5 and who is an Accredited Investor. Except as otherwise provided herein (and subject to the removal provisions set forth below), until such time as the shares of Common Stock issuable upon conversion of this Note have been registered under the Act or otherwise may be sold pursuant to Rule 144 without any restriction as to the number of securities as of a particular date that can then be immediately sold, each certificate for shares of Common Stock issuable upon conversion of this Note that has not been so included in an effective registration statement or that has not been sold pursuant to an effective registration statement or an exemption that permits removal of the legend, shall bear a legend substantially in the following form, as appropriate:

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

The legend set forth above shall be removed and the Company shall issue to the Holder a new certificate therefore free of any transfer legend if (i) the Company or its transfer agent shall have received an opinion of counsel, in form, substance and scope customary for opinions of counsel in comparable transactions, to the effect that a public sale or transfer of such Common Stock may be made without registration under the Act, which opinion shall be accepted by the Company so that the sale or transfer is effected or (ii) in the case of the Common Stock issuable upon conversion of this Note, such security is registered for sale by the Holder under an effective registration statement filed under the Act or otherwise may be sold pursuant to Rule 144 without any restriction as to the number of securities as of a particular date that can then be immediately sold. In the event that the Company does not accept the opinion of counsel provided by the Buyer with respect to the transfer of Securities pursuant to an exemption from registration, such as Rule 144 or Regulation S, at the Deadl ine, it wi II be considered an Event of Default pursuant to this note.

1.6 Effect of Certain Events.

(a) Effect of Merger, Consolidation, Etc. At the option of the Holder, the sale, conveyance or disposition of all or substantially all of the assets of the Company, the effectuation by the Company of a transaction or series of related transactions in which more than50% of the voting power of the Company is disposed of, or the consolidation, merger or other business combination of the Company with or into any other Person (as defined below) or Persons when the Company is not the survivor shall either: (i) be deemed to be an Event of Default (as defined in Article III) pursuant to which the Company shall be required to pay to the Holder upon the consummation of and as a condition to such transaction an amount equal to the Default Amount (as defined in Article III) or (ii) be treated pursuant to Section 1.6(b) hereof. "Person" shall mean any individual, corporation, limited liability company, partnership, association, trust or other entity or organization.

(b) Adjustment Due to Merger, Consolidation, Etc. If, at any time when this Note is issued and outstanding and prior to conversion of all of the Notes, there shall be any merger, consolidation, exchange of shares, recapitalization, reorganization, or other similar event, as a result of which shares of Common Stock of the Company shall be changed into the same or a different number of shares of another class or classes of stock or securities of the Company or another entity, or in case of any sale or conveyance of all or substantially all of the assets of the Company other than in connection with a plan of complete liquidation of the Company, then the Holder of this Note shall thereafter have the right to receive upon conversion of this Note, upon the basis and upon the terms and conditions specified herein and in lieu of the shares of Common Stock immediately theretofore issuable upon conversion, such stock, securities or assets which the Holder would have been entitled to receive in such transaction had this Note been converted in full immediately prior to such transaction (without regard to any limitations on conversion set forth herein), and in any such case appropriate provisions shall be made with respect to the rights and interests of the Holder of this Note to the end that the provisions hereof (including, without limitation, provisions for adjustment of the Conversion Price and of the number of shares issuable upon conversion of the Note) shall thereafter be applicable, as nearly as may be practicable in relation to any securities or assets thereafter deliverable upon the conversion hereof. The Company shall not affect any transaction described in this Section 1.6(b) unless (a) it first gives, to the extent practicable, thirty (30) days prior written notice (but in any event at least fifteen (15) days prior written notice) of the record date of the special meeting of shareholders to approve, or if there is no such record date, the consummation of, such merger, consolidation, exchange of shares, recapitalization, reorganization or other similar event or sale of assets (during which time the Holder shall be entitled to convert this Note) and (b) the resulting successor or acquiring entity (if not the Company) assumes by written instrument the obligations of this Section 1.6(b). The above provisions shall similarly apply to successive consolidations, mergers, sales, transfers or share exchanges.

(c) Adjustment Due to Distribution. If the Company shall declare or make any distribution of its assets (or rights to acquire its assets) to holders of Common Stock as a dividend, stock repurchase, by way of return of capital or otherwise (including any dividend or distribution to the Company's shareholders in cash or shares (or rights to acquire shares) of capital stock of a subsidiary (i.e., a spin-off)) (a "Distribution"), then the Holder of this Note shall be entitled, upon any conversion of this Note after the date of record for determining shareholders entitled to such Distribution, to receive the amount of such assets which would have been payable to the Holder with respect to the shares of Common Stock issuable upon such conversion had such Holder been the holder of such shares of Common Stock on the record date for the determination of shareholders entitled to such Distribution.

(d) Adjustment Due to Dilutive Issuance. If, at any time when any Notes are issued and outstanding, the Borrower issues or sells, or in accordance with this Section 1.6(d) hereof is deemed to have issued or sold, any shares of Common Stock in connection with a financing transaction based on a variable price formula (the "Alternative Variable Price Formula") that is more favorable to the investor in such financing transaction than the formula for calculating the Conversion Price in effect on the date of such issuance (or deemed issuance) of such shares of Common Stock (a "Dilutive Issuance"), then immediately upon the Dilutive Issuance, the formula for the Conversion Price will be adjusted to match the Alternative Variable Price Formula. If it is unclear whether the Alternative Variable Price Formula is better or worse, then Holder, in its sole discretion, may elect at the time of such issuance whether to switch to the Alternative Variable Price Formula or not.

(e) Purchase Rights. If, at any time when any Notes are issued and outstanding, the Company issues any convertible securities or rights to purchase stock, warrants, securities or other property (the "Purchase Rights") pro rata to the record holders of any class of Common Stock, then the Holder of this Note will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which such Holder could have acquired if such Holder had held the number of shares of Common Stock acquirable upon complete conversion of this Note (without regard to any limitations on conversion contained herein) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights or, if no such record is taken, the date as of which the record holders of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights.

(f) Notice of Adjustments. Upon the occurrence of each adjustment or readjustment of the Conversion Price as a result of the events described in this Section 1.6, the Company, at its expense, shall promptly compute such adjustment or readjustment and prepare and furnish to the Holder of a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Company shall, upon the written request at any time of the Holder, furnish to such Holder a like certificate setting forth (i) such adjustment or readjustment, (ii) the Conversion Price at the time in effect and (iii) the number of shares of Common Stock and the amount, if any, of other securities or property which at the time would be received upon conversion of the Note.

1.7 Trading Market Limitations. Unless permitted by the applicable rules and regulations of the principal securities market on which the Common Stock is then listed or traded, in no event shall the Company issue upon conversion of or otherwise pursuant to this Note and the other Notes issued pursuant to the Purchase Agreement more than the maximum number of shares of Common Stock that the Company can issue pursuant to any rule of the principal United States securities market on which the Common Stock is then traded (the "Maximum Share Amount"), which shall be 4.99% of the total shares outstanding on the Closing Date (as defined in the Purchase Agreement), subject to equitable adjustment from time to time for stock splits, stock dividends, combinations, capital reorganizations and similar events relating to the Common Stock occurring after the date hereof. Once the Maximum Share Amount has been issued, if the Company fails to eliminate any prohibitions under applicable law or the rules or regulations of any stock exchange, interdealer quotation system or other self-regulatory organization with jurisdiction over the Company or any of its securities on the Company's ability to issue shares of Common Stock in excess of the Maximum Share Amount, in lieu of any further right to convert this Note, this will be considered an Event of Default under Section 3.3 of the Note.

1.8 Status as Shareholder. Upon submission of a Notice of Conversion by a Holder, (i) the shares covered thereby (other than the shares, if any, which cannot be issued because their issuance would exceed such Holder's allocated portion of the Reserved Amount or Maximum Share Amount) shall be deemed converted into shares of Common Stock and (ii) the Holder's rights as a Holder of such converted portion of this Note shall cease and terminate, excepting only the right to receive certificates for such shares of Common Stock and to any remedies provided herein or otherwise available at law or in equity to such Holder because of a failure by the Company to comply with the terms of this Note. Notwithstanding the foregoing, if a Holder has not received certificates for all shares of Common Stock prior to the tenth (10th) business day after the expiration of the Deadline with respect to a conversion of any portion of this Note for any reason, then (unless the Holder otherwise elects to retain its status as a holder of Common Stock by so notifying the Company) the Holder shall regain the rights of a Holder of this Note with respect to such unconverted portions of this Note and the Company shall, as soon as practicable, return such unconverted Note to the Holder or, if the Note has not been surrendered, adjust its records to reflect that such portion of this Note has not been converted. In all cases, the Holder shall retain all of its rights and remedies (including, without limitation, (i) the right to receive Conversion Default Payments pursuant to Section 1.3 to the extent required thereby for such Conversion Default and any subsequent Conversion Default and (ii) the right to have the Conversion Price with respect to subsequent conversions determined in accordance with Section 1.3) for the Company's failure to convert this Note.

1.9 Omit.

ARTICLE II. CERTAIN COVENANTS

2.1 Distributions on Capital Stock. So long as the Company shall have any obligation under this Note, the Company shall not without the Holder's written consent (a) pay, declare or set apart for such payment, any dividend or other distribution (whether in cash, property or other securities) on shares of capital stock other than dividends on shares of Common Stock solely in the form of additional shares of Common Stock or (b) directly or indirectly or through any subsidiary make any other payment or distribution in respect of its capital stock except for distributions pursuant to any shareholders' rights plan which is approved by a majority of the Company's disinterested directors.

2.2 Restriction on Stock Repurchases. So long as the Company shall have any obligation under this Note, the Company shall not without the Holder's written consent redeem, repurchase or otherwise acquire (whether for cash or in exchange for property or other securities or otherwise) in anyone transaction or series of related transactions any shares of capital stock of the Company or any warrants, rights or options to purchase or acquire any such shares.

2.3 Borrowings. So long as the Issuer shall have any obligation under this Note, the Jssuer shall not, without the Holder's written consent, create, incur, assume guarantee, endorse, contingently agree to purchase or otherwise become liable upon the obligation of any person, firm, partnership, joint venture or corporation, except by the endorsement of negotiable instruments for deposit or collection, or suffer to exist any liability for borrowed money, except (a) borrowings in existence or committed on the date hereof and of which the Jssuer has informed Holder in writing prior to the date hereof (b) indebtedness to trade creditors or financial institutions incurred in the ordinary course of business or (c) borrowings, the proceeds of which shall be used to repay this Note.

2.4 Sale of Assets. So long as the Company shall have any obligation under this Note, the Company shall not, without the Holder's written consent, sell, lease or otherwise dispose of any significant portion of its assets outside the ordinary course of business. Any consent to the disposition of any assets may be conditioned on a specified use of the proceeds of disposition.

2.5 Advances and Loans. So long as the Company shall have any obligation under this Note, the Company shall not, without the Holder's written consent, lend money, give credit or make advances to any person, firm, joint venture or corporation, including, without limitation, officers, directors, employees, subsidiaries and affiliates of the Company, except loans, credits or advances (a) in existence or committed on the date hereof and which the Company has informed Holder in writing prior to the date hereof, (b) made in the ordinary course of business or (c) not in excess of $100,000.

ARTICLE III. EVENTS OF DEFAULT

If any of the following events of default (each, an "Event of Default") shall occur:

3.1 Failure to Pay Principal or Interest. The Company fails to pay the principal hereof or interest thereon when due on this Note, whether at maturity, upon acceleration or otherwise.

3.2 Conversion and the Shares. The Company fails to issue shares of Common Stock to the Holder (or announces or threatens in writing that it will not honor its obligation to do so) upon exercise by the Holder of the conversion rights of the Holder in accordance with the terms of this Note, fails to transfer or cause its transfer agent to transfer (issue) (electronically or in certificated form) any certificate for shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note, the Company directs its transfer agent not to transfer or delays, impairs, and/or hinders its transfer agent in transferring (or issuing) (electronically or in certificated form) any certificate for shares of Common Stock to be issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note, or fails to remove (or directs its transfer agent not to remove or impairs, delays, and/or hinders its transfer agent from removing) any restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on any certificate for any shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note (or makes any written announcement, statement or threat that it does not intend to honor the obligations described in this paragraph) and any such failure shall continue uncured (or any written announcement, statement or threat not to honor its obligations shall not be rescinded in writing) for three (3) business days after the Holder shall have delivered a Notice of Conversion. It is an obligation of the Company to remain current in its obligations to its transfer agent. It shall be an event of default of this Note, if a conversion of this Note is delayed, hindered or frustrated due to a balance owed by the Company to its transfer agent. If at the option of the Holder, the Holder advances any funds to the Company's transfer agent in order to process a conversion, such advanced funds shall be paid by the Company to the Holder within forty eight (48) hours of a demand from the Holder.

3.3 Breach of Covenants. The Company breaches any material covenant or other material term or condition contained in this Note and any collateral documents including but not limited to the Purchase Agreement and such breach continues for a period of ten (10) days after written notice thereof to the Company from the Holder.

3.4 Breach of Representations and Warranties. Any representation or warranty of the Company made herein or in any agreement, statement or certificate given in writing pursuant hereto or in connection herewith (including, without limitation, the Purchase Agreement), shall be false or misleading in any material respect when made and the breach of which has (or with the passage of time will have) a material adverse effect on the rights of the Holder with respect to this Note or the Purchase Agreement.

3.5 Receiver or Trustee. The Company or any subsidiary of the Company shall make an assignment for the benefit of creditors, or apply for or consent to the appointment of a receiver or trustee for it or for a substantial part of its property or business, or such a receiver or trustee shall otherwise be appointed.

3.6 Judgments. Any money judgment, writ or similar process shall be entered or filed against the Company or any subsidiary of the Company or any of its property or other assets for more than $50,000, and shall remain unvacated, unbonded or unstayed for a period of twenty (20) days unless otherwise consented to by the Holder, which consent will not be unreasonably withheld.

3.7 Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings, voluntary or involuntary, for relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Company or any subsidiary of the Company.

3.8 Delisting of Common Stock. The Company shall fail to maintain the listing of the Common Stock on the OTC Markets or an equivalent replacement exchange, the Nasdaq National Market, the Nasdaq Small Cap Market, the New York Stock Exchange, or the American Stock Exchange.

3.9 Failure to Comply with the Exchange Act. The Company shall fail to comply with the reporting requirements of the Exchange Act.3.10 Liquidation. Any dissolution, liquidation, or winding up of Company or any substantial portion of its business.

3.11 Cessation of Operations. Any cessation of operations by Company or Company admits it is otherwise generally unable to pay its debts as such debts become due, provided, however, that any disclosure of the Company's ability to continue as a "going concern" shall not be an admission that the Company cannot pay its debts as they become due.

3.12 Maintenance of Assets. The failure by Company to maintain any material intellectual property rights, personal, real property or other assets which are necessary to conduct its business (whether now or in the future).

3.13 Financial Statement Restatement. The restatement of any financial statements filed by the Company with the SEC for any date or period from two years prior to the Jssue Date of this Note and until this Note is no longer outstanding, if the result of such restatement would, by comparison to the original financial statement, have constituted a material adverse effect on the rights of the Holder with respect to this Note or supporting documents.

3.14 Reverse Splits. The Company effectuates a reverse split of its Common Stock without at least twenty (20) days prior written notice to the Holder.

3.15 Replacement of Transfer Agent. In the event that the Company proposes to replace its transfer agent, the Company fails to provide, prior to the effective date of such replacement, a fully executed Irrevocable Transfer Agent Instructions in a form as initially delivered pursuant to the Purchase Agreement (including but not limited to the provision to irrevocably reserve shares of Common Stock in the Reserved Amount) signed by the successor transfer agent to Company and the Company.

3.16 Cross-Default. Notwithstanding anything to the contrary contained in this Note or the other related or companion documents, a breach or default by the Company of any covenant or other term or condition contained in any of the Other Agreements, after the passage of all applicable notice and cure or grace periods, shall, at the option of the Company, be considered a default under this Note and the Other Agreements, in which event the Holder shall be entitled (but in no event required) to apply all rights and remedies of the Holder under the terms of this Note and the Other Agreements by reason of a default under said Other Agreement or hereunder. "Other Agreements" means, collectively, all agreements and instruments between, among or by: (1) the Company, and, or for the benefit of, (2) the Holder and any affiliate of the Holder, including, without limitation, promissory notes; provided, however, the term "Other Agreements" shall not include the related or companion documents to this Note. Each of the loan transactions will be cross-defaulted with each other loan transaction and with all other existing and future debt of Company to the Holder.

Upon the occurrence and during the continuation of any Event of Default specified in Section 3.1 (solely with respect to failure to pay the principal hereof or interest thereon when due at the Maturity Date), the Note shall become immediately due and payable and the Company shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to the Default Sum (as defined herein). UPON THE OCCURRENCE AND DURING THE CONTINUATION OF ANY EVENT OF DEFAULT SPECIFIED IN SECTION 3.2, THE NOTE SHALL BECOME IMMEDIATELY DUE AND PAYABLE AND THE COMPANY SHALL PAY TO THE HOLDER, IN FULL SATISFACTION OF ITS OBLLGATTONS HEREUNDER, AN AMOUNT EQUAL TO: (Y) THE DEFAULT SUM (AS DEFINED HERE.IN); MULl'IPLlED BY (Z) TWO (2). Upon the occurrence and during the continuation of any Event of Default specified in Sections 3.1 (solely with respect to failure to pay the principal hereof or interest thereon when due on this Note upon a Trading Market Prepayment Event pursuant to Section 1.7 or upon acceleration), 3.3, 3.4, 3.6, 3.8, 3.9, 3.11, 3.12, 3.13, 3.14, and/or 3.15 exercisable through the delivery of written notice to the Company by such Holders (the "Default Notice"), and upon the occurrence of an Event of Default specified the remaining sections of Articles III (other than failure to pay the principal hereof or interest thereon at the Maturity Date specified in Section 3,1 hereof), the Note shall become immediately due and payable and the Company shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to the greater of (i) 150% times the sum of (w) the then outstanding principal amount of this Note ~ (x) accrued and unpaid interest on the unpaid principal amount of this Note to the date of payment (the "Mandatory Prepayment Date") plus (y) Default Interest, if any, on the amounts referred to in clauses (w) and/or (x) plus (z) any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof (the then outstanding principal amount of this Note to the date of payment ~ the amounts referred to in clauses (x), (y) and (z) shall collectively be known as the "Default Sum") or (ii) the "parity value" of the Default Sum to be prepaid, where parity value means (a) the highest number of shares of Common Stock issuable upon conversion of or otherwise pursuant to such Default Sum in accordance with Article I, treating the Trading Day immediately preceding the Mandatory Prepayment Date as the "Conversion Date" for purposes of determining the lowest applicable Conversion Price, unless the Default Event arises as a result of a breach in respect of a specific Conversion Date in which case such Conversion Date shall be the Conversion Date), multiplied by (b) the highest Closing Price for the Common Stock during the period beginning on the date of first occurrence of the Event of Default and ending one day prior to the Mandatory Prepayment Date (the "Default Amount") and all other amounts payable hereunder shall immediately become due and payable, all without demand, presentment or notice, all of which hereby are expressly waived, together with all costs, including, without limitation, legal fees and expenses, of collection, and the Holder shall be entitled to exercise all other rights and remedies available at law or in equity.

If the Company fails to pay the Default Amount within five (5) business days of written notice that such amount is due and payable, then the Holder shall have the right at any time, so long as the Company remains in default (and so long and to the extent that there are sufficient authorized shares), to require the Company, upon written notice, to immediately issue, in lieu of the Default Amount, the number of shares of Common Stock of the Company equal to the Default Amount divided by the Conversion Price then in effect.

ARTICLE IV. MISCELLANEOUS

4.1 Failure or Indulgence Not Waiver. No failure or delay on the part of the Holder in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privileges. All rights and remedies existing hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available.

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

If to the Company, to:

_______________

If to the Holder:

RBB Capital, LLC.

200 Stonehinge Lane

Suite 3

Carle Place, NY 11514

718.530.0182

4.3 Amendments. This Note and any provision hereof may only be amended by an instrument in writing signed by the Company and the Holder. The term "Note" and all reference thereto, as used throughout this instrument, shall mean this instrument (and the other Notes issued pursuant to the Purchase Agreement) as originally executed, or if later amended or supplemented, then as so amended or supplemented.

4.4 Assignability. This Note shall be binding upon the Company and its successors and assigns, and shall inure to be the benefit of the Holder and its successors and assigns. Notwithstanding anything in this Note to the contrary, this Note may be pledged as collateral in connection with a bona fide margin account or other lending arrangement.

4.5 Cost of Collection. If default is made in the payment of this Note, the Company shall pay the Holder hereof costs of collection, including reasonable attorneys' fees.

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

4.7 Certain Amounts. Whenever pursuant to this Note the Company is required to pay an amount in excess of the outstanding principal amount (or the portion thereof required to be paid at that time) plus accrued and unpaid interest plus Default Interest on such interest, the Company and the Holder agree that the actual damages to the Holder from the receipt of cash payment on this Note may be difficult to determine and the amount to be so paid by the Company represents stipulated damages and not a penalty and is intended to compensate the Holder in part for loss of the opportunity to convert this Note and to earn a return from the sale of shares of Common Stock acquired upon conversion of this Note at a price in excess of the price paid for such shares pursuant to this Note. The Company and the Holder hereby agree that such amount of stipulated damages is not plainly disproportionate to the possible loss to the Holder from the receipt of a cash payment without the opportunity to convert this Note into shares of Common Stock.

4.8 Purchase Agreement. By its acceptance of this Note, each party agrees to be bound by the applicable terms of the Securities Purchase Agreement and supporting documents of same date.

4.9 Notice of Corporate Events. Except as otherwise provided below, the Holder of this Note shall have no rights as a Holder of Common Stock unless and only to the extent that it converts this Note into Common Stock. The Company shall provide the Holder with prior notification of any meeting of the Company's shareholders (and copies of proxy materials and other information sent to shareholders). In the event of any taking by the Company of a record of its shareholders for the purpose of determining shareholders who are entitled to receive payment of any dividend or other distribution, any right to subscribe for, purchase or otherwise acquire (including by way of merger, consolidation, reclassification or recapitalization) any share of any class or any other securities or property, or to receive any other right, or for the purpose of determining shareholders who are entitled to vote in connection with any proposed sale, lease or conveyance of all or substantially all of the assets of the Company or any proposed liquidation, dissolution or winding up of the Company, the Company shall mail a notice to the Holder, at least twenty (20) days prior to the record date specified therein (or thirty (30) days prior to the consummation of the transaction or event, whichever is earlier), of the date on which any such record is to be taken for the purpose of such dividend, distribution, right or other event, and a brief statement regarding the amount and character of such dividend, distribution, right or other event to the extent known at such time. The Company shall make a public announcement of any event requiring notification to the Holder hereunder substantially simultaneously with the notification to the Holder in accordance with the terms of this Section 4.9.

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

IN WITNESS WHEREOF, Company has caused this Note to be signed in its name by its duly authorized officer:

SECURITIES PURCHASE AGREEMENT

THIS PURCHASE AGREEMENT ("Agreement") is made as of the 21st day of April, 2015 by and between Dixi Foods International, lnc.,(the "Company"), and RBB Capital, LLC (the "Investor").

Recitals

A. The Investor wishes to purchase from the Company, and the Company wishes to sell and issue to the Investor, upon the terms and conditions stated in this Agreement:

1. A $190,000 Convertible Promissory Note (the :Note”) in the form attached hereto as

Exhibit A; and

2.250,000 shares of the Common stock of the Company.

In consideration of the mutual promises made herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. Definitions. In addition to those terms defined above and elsewhere in this Agreement, for the purposes of this Agreement, the following terms shall have the meanings set forth below:

"Affiliate" means, with respect to any Person, any other Person which directly or indirectly through one or more intermediaries Controls, is controlled by, or is under common control with, such Person.

"Business Day" means a day, other than a Saturday or Sunday, on which banks in New York City are open for the general transaction of business.

"Common Stock Equivalents" means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Common stock, including without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.

"Company's Knowledge" means the actual knowledge of the executive officers (as defined in Rule 405 under the 1933 Act) of the Company, alter due inquiry.

"Confidential Information" means trade secrets, confidential information and know-how (including but not limited to ideas, formulae, compositions, processes, procedures and techniques, research and development information, computer program code, performance specifications, support documentation, drawings, specifications, designs, business and marketing plans, and customer and supplier lists and related information).

"Control" (including the terms "controlling", "controlled by" or "under common control with") means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

"Intellectual Property" means all of the following: (i) patents, patent applications, patent disclosures and inventions (whether or not patentable and whether or not reduced to practice); (ii) trademarks, service marks, trade dress, trade names, corporate names, logos, slogans and Internet domain names, together with all goodwill associated with each of the foregoing; (iii) copyrights and copyrightable works; (iv) registrations, applications and renewals for any of the foregoing; and (v) proprietary computer software (including but not limited to data, data bases and documentation).

"Material Adverse Effect" means a material adverse effect on (i) the assets, liabilities, results of operations, condition (financial or otherwise). business, or prospects of the Company and its Subsidiaries taken as a whole, or (ii) the ability of the Company to perform its obiligations under the Transaction Documents.

"Person" means an individual, corporation, partnership, limited liability company, trust, business trust, association, joint stock company, joint venture. sole proprietorship, unincorporated organization, governmental authority or any other form of entity not specifically listed herein.

"Purchase Price" means one hundred and fifty thousand dollars ($150,000). "SEC" means the United States Securities and Exchange Commission.

"Securities" means the Convertible Note common shares issuable at its conversion and the 250,000 shares of the Common Stock of the Company.

"Subsidiary" of any Person means another Person, an amount of the voting securities, other voting ownership or voting partnership interests of which is sufficient to elect at least a majority of its Board of Directors or other governing body (or. if there are no such voting interests, 50% or more of the equity interests of which) is owned directly or indirectly by such first Person.

"Transaction Documents" means this Agreement, the Ole, the Company Representation Letter, the Irrevocable Transfer Agent Instruction, and supporting documents of same date.

"1933 Act" means the Securities Act of 1933, as amended, or any successor statute, and the rules and regulations promulgated thereunder.

"1934 Act" means the Securities Exchange Act of 1934, as amended, or any successor statute, and the rule and regulations promulgated thereunder.

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2. Purchase and Sale of the Securities. Subject to the terms and conditions of this Agreement, the Company shall sell and issue to the Investor a convertible note in the principal amount of$190,000 and 250,000 shares of the Common Stock of the Company.

3. Closing. Upon confirmation that the other conditions to closing specified herein have been satisfied or duly waived by the Investor, the Company shall deliver to the Investor, a Note registered the name of the Investor, together with the 250,000 shares and the Investor shall cause a wire transfer in same day funds to be sent to the account of the Company as instructed in writing by the Company, in an amount representing the Purchase Price for the Note(the "Closing Date").

4. Representations and Warranties of the Company. The Company hereby represents and warrants to the Investor that, except as set forth in the schedules delivered herewith (collectively, the "Disclosure Schedules"):

4.1 Organization. Good Standing and Qualification. Each of the Company and its Subsidiaries is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation and has all requisite corporate power and authority to carryon its business as now conducted and to own its properties. Each of the Company and its Subsidiaries is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property makes such qualification or leasing necessary unless the failure to so qualify has not and could not reasonably be expected to have a Material Adverse Effect. The Company's Subsidiaries are listed on the Company's public disclosures filed with the EC.

4.2 Authorization, The Company has full power and authority and, has taken all requisite action on the part of the Company, its officers, directors and stockholders necessary for (i) the authorization, execution and delivery of the Transaction Documents, (i i) authorization of the performance of all obligations of the Company hereunder or thereunder, and (iii) the authorization, issuance (or reservation for issuance) and delivery of the Securities. The Transaction Documents constitute the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability, relating to or affecting creditors' rights generally.

4.3 Capitalization. As of the date hereof, the the authorized capital stock of the Company on the date hereof is____; (b) the number of shares of capital stock issued and outstanding is ____; (c) the number of shares of capital stock issuable pursuant to the Company's stock plans is____ ; and (d) the number of shares of capital stock issuable and reserved for issuance pursuant to securities (other than the Securities) exercisable for, or convertible into or exchangeable for any shares of capital stock or the Company are____ . All of the issued and outstanding shares of the Company's capital stock have been duly authorized and validly issued and are fully paid, nonassessable and free of pre-emptive rights.

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All of the issued and outstanding shares of capital stock of each Subsidiary have been duly authorized and validly issued and are fully paid, non assesable and free of pre-emptive rights, were issued in full compliance with applicable state and federal securities law and any rights of third parties and are owned by the Company, beneficially and of record, subject to no lien, encumbrance or other adverse claim. No Person is entitled to pre-emptive or similar statutory or contractual rights with respect to any securities of the Company. Other than described herein and in the Company's periodic reports filed with the SEC, there are no outstanding warrants, options, convertible securities or other rights, agreements or arrangements of any character under which the Company or any of its Subsidiaries is or may be obligated to issue any equity securities of any kind and except as contemplated by this Agreement, neither the Company nor any of its Subsidiaries is currently in negotiations for the issuance of any equity securities of any kind.

The issuance and sale of the Securities hereunder will not obligate the Company to issue shares of Common Stock or other securities to any other Person (other than the Investor) and will not result in the adjustment of the exercise, conversion, exchange or reset price of any outstanding security.

The Company does not have outstanding stockholder purchase rights or "poison pill" or any similar arrangement in effect giving any Person the right to purchase any equity interest in the Company upon the occurrence of certain events.

4.4 Valid Issuance. The issued Securities have been duly and validly authorized and, when issued and paid for pursuant to this Agreement, shall be free and clear of all encumbrances and restrictions (other than those created by the Investor), except for restrictions on transfer set forth in the Transaction Documents or imposed by applicable securities laws. Upon the due conversion of the Debenture, the Converted hares will be validly issued, fully paid and non-assessable free and clear of all encumbrances and restrictions, except for restrictions on transfer set forth in the Transaction Documents or imposed by applicable securities laws and except for those created by the Investor. The Company has reserved a sufficient number of shares of Common lock for issuance upon the exercise of the Debenture, free and clear of all encumbrances and restrictions, except for restrictions on transfer set forth in the Transaction Documents or imposed by applicable securities laws and except for those created by the Investor.

4.5 Consents. The execution, delivery and performance by the Company of the Transaction Documents, and the offer, issuance and sale of the Securities require no consent of, action by or in respect of, or filing with, any Person, governmental body, agency, or official other than filings that have been made pursuant to applicable state securities laws, and post-sale filings pursuant to applicable state and federal securities laws which the Company undertakes to file within the applicable time periods. subject to the accuracy of the representations and warranties of the Investor set forth in Section 5 hereof, the Company has taken all action necessary to exempt (i) the issuance and sale of the Securities, (ii) the issuance of the Shares upon due conversion of the Debenture, and (iii) the other transactions contemplated by the Transaction Documents from the provisions of any shareholder rights plan or other "poison pill" arrangement, any anti-takeover, business combination or control share law or statute binding on the Company or to which the Company or any of its assets and properties may be subject and any provision of the Company's Articles of Incorporation or By-laws that is or could reasonably be expected to become applicable to the Investor as a result of the transactions contemplated hereby, including without limitation, the issuance of the Securities and the ownership, disposition or voting of the Securities by the Investor or the exercise of any right granted to the Investor pursuant to this Agreement or the other Transaction Documents.

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4.6 Delivery of SEC Filings: Business. The Company has made available to the Investor through the EDGAR system, true and complete copies of the Company's most recent Annual Report on Form 10-K for its last fiscal year (the"10-K"), and all other reports filed by the Company pursuant to the 1934 Act since the filing of the 10-K and prior to the date hereof (collectively, the "SEC Filings"). The SEC Filings are the only filings required of the Company pursuant to the 1934 Act for such period. The Company and its Subsidiaries are engaged in all material respects only in the business described in the SEC Filings and the SEC Filings contain a complete and accurate description in all material respects of the business of the Company and its Subsidiaries, taken as a whole.

4.7 Use of Proceeds. The net proceeds of the sale of the Note hereunder shall be used by the Company for working capital and general corporate purposes. The Company agrees that it shall not use the funds from this Agreement, at any time, to lend money, give credit or make advances to any officers, directors, employees, Subsidiaries and affiliates of the Company.

4.8 No Conflict Breach, Violation or Default. The execution, delivery and performance of the Transaction Documents by the Company and the issuance and sale of the Securities will not conflict with or result in a breach or violation of any of the terms and provisions of, or constitute a default under (i) the Company's Articles of Incorporation or the Company's Bylaws, both as in effect on the date hereof (true and complete copies of which have been made available to the Investor through the EDGAR system), or (ii)(a) any statute, rule, regulation or order of any governmental agency or body or any court, domestic or foreign, having jurisdiction over the Company, any Subsidiary or any of their respective assets or properties, or (b) any agreement or instrument to which the Company or any Subsidiary is a party or by which the Company or a Subsidiary is bound or to which any of their respective assets or properties is subject.

4.9 Brokers and Finders.0 Person will have, as a result of the transactions contemplated by the Transaction Documents, any valid right, interest or claim against or upon the Company, any Subsidiary or an Investor for any commission, fee or other compensation pursuant to any agreement, arrangement or understanding entered into by or on behalf of the Company.

4.10 No Directed Selling Efforts or General Solicitation. Neither the Company nor any Person acting on its behalf has conducted any general solicitation or general advertising (as those terms are used in Regulation D) in connection with the offer or sale of any of the Securities.

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4.11 No Integrated Offering. Neither the Company nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers or sales of any Company security or solicited any offers to buy any security, under circumstances that would adversely affect reliance by the Company on Section 4(2) for the exemption from registration for the transactions contemplated hereby or would require registration of the Securities under the 1933 Act.

4.12 Private Placement. The offer and sale of the Securities to the Investor as contemplated hereby is exempt from the registration requirements of the 1933 Act.

5. Representations and Warranties of the Investor. The Investor hereby represents and warrants to the Company that:

5.1 Organization and Existence. Such Investor is a validly existing corporation, limited partnership or limited liability company and has all requisite corporate, partnership or limited liability company power and authority to invest in the Securities pursuant to this Agreement.

5.2 Authorization. The execution, delivery and performance by such Investor of the Transaction Documents to which such Investor is a party have been duly authorized and will each constitute the valid and legally binding obligation of such Investor, enforceable against such Investor in accordance with their respective terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability, relating to or affecting creditors' rights generally.

5.3 Purchase Entirely for Own Account. The Securities to be received by such Investor hereunder will be acquired for such Investor's own account, not as nominee or agent, and not with a view to the resale or distribution of any part thereof in violation of the 1933

Act, and such Investor has no present intention of selling, granting any participation in, or

otherwise distributing the same in violation of the 1933 Act without prejudice, however, to such Investor's right at all times to sell or otherwise dispose of all or any part of such Securities in compliance with applicable federal and state securities laws. Nothing contained herein shall be deemed a representation or warranty by such Investor to hold the Securities for any period of time. Such Investor is not a broker-dealer registered with the SEC under the 1934 Act or an entity engaged in a business that would require it to be so registered.

5.4 Investment Experience. Such Investor acknowledges that it can bear the economic risk and complete loss of its investment in the Securities and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment contemplated hereby.

5.5 Disclosure of Information. Such Investor has had an opportunity to receive all information related to the Company requested by it and to ask questions of and receive answers from the Company regarding the Company, its business and the terms and conditions of the offering of the Securities. Such Investor acknowledges receipt of copies of the SEC Filings. Neither such inquiries nor any other due diligence investigation conducted by such Investor shall modify, amend or affect such Investor's right to rely on the Company's representations and warranties contained in this Agreement.

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5.6 Restricted Securities. Such Investor understands that the Securities are characterized as "restricted securities" under the US .. federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that under such laws and applicable regulations such securities may be resold without registration under the 1933 Act only in certain limited circumstances.

5.7 Legends. It is understood that, except as provided below, certificates evidencing the Securities may bear the following or any similar legend:

(a) "The securities represented hereby may not be transferred unless (i) such securities have been registered for sale pursuant to the Securities Act of 1933, as amended, (ii) such securities may be sold pursuant to Rule 144(i), or (iii) the Company has received an opinion of counsel reasonably satisfactory to it that such transfer may lawfully be made without registration under the Securities Act of 1933 or qualification under applicable state securities laws."

(b) If required by the authorities of any state in connection with the issuance of sale of the Securities, the legend required by such state authority.

5.8 Accredited Investor. Such Investor is an accredited investor as defined in Rule 50 I(a) of Regulation D, as amended, under the 1933 Act.

5.9 No General Solicitation. Such Investor did not learn of the investment in the Securities as a result of any public advertising or general solicitation.

5.10 Brokers and Finders.No Person will have, as a result of the transactions contemplated by the Transaction Documents, any valid right, interest or claim against or upon the Company, any Subsidiary or an Investor for any commission, fee or other compensation pursuant to any agreement, arrangement or understanding entered into by or on behalf of such Investor.

6. Conditions to Closing.

6.1 Conditions to the Investor's Obligations. The obligation of the Investor to purchase the Note at Closing is subject to the fulfillment to such Investor's satisfaction, on or prior to the Closing Date, of the following conditions, any of which may be waived by the Investor:

(a) The representations and warranties made by the Company in Section 4 hereof qualified as to materiality shall be true and correct at all times prior to and on the Closing Date, except to the extent any such representation or warranty expressly speaks as of an earlier date, in which case such representation or warranty shall be true and correct as of such earlier date, and, the representations and warranties made by the Company in Section 4 hereof not qualified as to materiality shall be true and correct in all material respects at all times prior to and on the Closing Date, except to the extent any such representation or warranty expressly speaks as of an earlier date, in which case such representation or warranty shall be true and correct in all material respects as of such earlier date. The Company shall have performed in all material respects all obligations and conditions herein required to be performed or observed by it on or prior to the Closing Date.

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(b) The Company shall have obtained any and all consents, permits, approvals, registrations and waivers necessary or appropriate for consummation of the purchase and sale of the Securities, and the consummation of the other transactions contemplated by the Transaction Documents, all of which shall be in full force and effect.

(c) No judgment, writ, order, injunction, award or decree of or by any court, or judge, justice or magistrate, including any bankruptcy court or judge, or any order of or by any governmental authority, shall have been issued, and no action or proceeding shall have been instituted by any governmental authority, enjoining or preventing the consummation of the transactions contemplated hereby or in the other Transaction Documents.

(d) The Company shall have executed and delivered the Convertible

Note and supporting documentation.

(e) The Company shall have executed and delivered the Irrevocable

Transfer Agent Instructions.

(f) No stop order or suspension of trading shall have been imposed by the public markets on which the Company's common stock is traded or quoted, the SEC or any other governmental or regulatory body with respect to public trading in the Common lock.

6.2 Conditions to Obligations of the Company. The Company's obligation to sell and issue the Note at Closing is subject to the fulfillment to the satisfaction of the Company on or prior to the Closing Date of the following conditions, any of which may be waived by the Company:

(a) The representations and warranties made by the Investor in Section 5 hereof, other than the representations and warranties contained in Sections 5.3, 5.4, 5.5, 5.6,5.7, 5.8 and 5.9 (the "Investment Representations"), shall be true and correct in all material respects when made, and shall be true and correct in all material respects on the Closing Date with the same force and effect as if they had been made on and as of said date. The Investment Representations shall be true and correct in all respects when made, and shall be true and correct in all respects on the Closing Date with the same force and effect as if they had been made on and as of said date. The Investor shall have performed in all material respects all obligations and conditions herein required to be performed or observed by them on or prior to the Closing Date.

(b) The Investor shall have delivered the Purchase Price to the Company in accordance with the schedule outlined herein.

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6.3 Termination of Obligations to Effect Closing: Effects.

(a) The obligations of the Company, on the one hand, and the Investor, on the other hand, to effect the Closing shall terminate as follows:

Investor;

(i) Upon the mutual written consent of the Company and the Investor.

(ii) By the Company if any of the conditions set forth in Section 6.2 shall have become incapable of fulfillment, and shall not have been waived by the Company;

(iii) By the Investor if any of the conditions set forth in Section

6.1 shall have become incapable of fulfillment, and shall not have been waived by the Investor; or provided, however, that, except in the case of clause (i) above. the party seeking to terminate its obligation to effect the Closing shall not then be in breach of any of its representations, warranties, covenants or agreements contained in this Agreement or the other Transaction Documents if such breach has resulted in the circumstances giving rise to such party's seeking to terminate its obligation to effect the Closing.

7. Survival and Indemnification.

7.1 Survival. The representations, warranties, covenants and agreements contained in this Agreement shall survive the Closing of the transactions contemplated by this Agreement.

7.2 Indemnification. The Company agrees to indemnify and hold harmless each Investor and its Affiliates and their respective directors, officers, employees and agents from and against any and all losses, claims, damages, liabilities and expenses (including without limitation reasonable attorney fees and disbursements and other expenses incurred in connection with investigating, preparing or defending any action, claim or proceeding, pending or threatened and the costs of enforcement thereof) (collectively, "Losses") to which such Person may become subject as a result of any breach of representation, warranty, covenant or agreement made by or to be performed on the part of the Company under the Transaction Documents, and will reimburse any such Person for all such amounts as they are incurred by such Person.

7.3 Conduct of Indemnification Proceedings. Promptly after receipt by any Person (the "Indemnified Person") of notice of any demand, claim or circumstances which would or might give rise to a claim or the commencement of any action, proceeding or investigation in respect of which indemnity may be sought pursuant to Section 7.2, such Indemnified Person shall promptly notify the Company in writing and the Company shall assume the defense thereof, including the employment of counsel reasonably satisfactory to such Indemnified Person, and shall assume the payment of all fees and expenses; provided, however, that the failure of any Indemnified Person so to notify the Company shall not relieve the Company of its obligations hereunder except to the extent that the Company is materially prejudiced by such failure to notify. In any such proceeding, any Indemnified Person shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Person unless: (i) the Company and the Indemnified Person shall have mutually agreed to the retention of such counsel; or (ii) in the reasonable judgment of counsel to such Indemnified Person representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. The Company shall not be liable for any settlement of any proceeding effected without its written consent, which consent shall not be unreasonably withheld, but if settled with such consent, or if there be a final judgment for the plaintiff, the Company shall indemnify and hold harmless such Indemnified Person from and against any loss or liability (to the extent stated above) by reason of such settlement or judgment. Without the prior written consent of the Indemnified Person, which consent shall not be unreasonably withheld, the Company shall not affect any settlement of any pending or threatened proceeding in respect of which any Indemnified Person is or could have been a party and indemnity could have been sought hereunder by such Indemnified Party, unless such settlement includes an unconditional release of such Indemnified Person from all liability arising out of such proceeding.

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8. Miscellaneous.

8.1 Successors and Assigns. This Agreement may not be assigned by a party hereto without the prior written consent of the Company or the Investor, as applicable, provided, however, that an Investor may assign its rights and delegate its duties hereunder in whole or in part to an Affiliate or to a third party acquiring some or all of its Securities in a private transaction without the prior written consent of the Company, after notice duly given by such Investor to the Company. The provisions of this Agreement shall inure to the benefit of and be binding upon the respective permitted successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

8.2 Counterparts; This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. This Agreement may also be executed via facsimile, which shall be deemed an original.

8.3 Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

8.4 Notices. Unless otherwise provided, any notice required or permitted under this Agreement shall be given in writing and shall be deemed effectively given as hereinafter described (i) if given by personal delivery, then such notice shall be deemed given upon such delivery, (ii) if given by fax, then such notice shall be deemed given upon receipt of confirmation of complete transmittal, (iii) if given by mail, then such notice shall be deemed given upon the earlier of (A) receipt of such notice by the recipient or (8) three days after such notice is deposited in first class mail, postage prepaid, and (iv) if given by an internationally recognized overnight air courier, then such notice shall be deemed given one business day after delivery to such carrier. All notices shall be addressed to the party to be notified at the address as follows, or at such other address as such party may designate by ten days' advance written notice to the other party:

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If to the Company:

Dixi Foods International, Inc.

_______________

Attn:___________

Fax:____________

Tel:____________

If to the Investor:

RBB Capital, LLC

200 tonehinge Lane, uite 3

Carle Place, NY 11514

718.530.0182

8.5 Expenses. The parties hereto shall pay their own costs and expenses in connection herewith. In the event that legal proceedings are commenced by any party to this Agreement against another party to this Agreement in connection with this Agreement or the other Transaction Documents, the party or parties which do not prevail in such proceedings shall severally, but not jointly, pay their pro rata share of the reasonable attorneys' fees and other reasonable out-of-pocket costs and expenses incurred by the prevailing party in such proceedings.

8.6 Amendments and Waivers. Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the Investor. Any amendment or waiver effected in accordance with this paragraph shall be binding upon each holder of any Securities purchased under this Agreement at the time outstanding, each future holder of all such Securities, and the Company.

8.7 Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof but shall be interpreted as if it were written so as to be enforceable to the maximum extent permitted by applicable law. and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted by applicable law, the parties hereby waive any provision of law which renders any provision hereof prohibited or unenforceable in any respect.

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8.8 Entire Agreement. This Agreement. including the Exhibits and the Disclosure Schedules. and the other Transaction Documents constitute the entire agreement among the parties hereof with respect to the subject maner hereof and thereof and supersede all prior agreements and understandings. both oral and written. between the parties with respect to the subject matter hereof and thereof.

8.9 Further Assurances. The parties shall execute and deliver all such further instruments and documents and take all such other actions as may reasonably be required to carry out the transactions contemplated hereby and to evidence the fulfillment of the agreements herein contained.

8.10 Governing Law; Consent to Jurisdiction; Waiver of Jury Trial. This Agreement shall be governed by. and construed in accordance with, the internal laws of the State of Delaware, without regard to principles of conflicts of law. THE COMPANY AND INVESTOR WAIVE ANY RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS NOTE OR ANY TRANSACTION CONTEMPLATED HEREIN, INCLUDING CLAIMS BASED ON CONTRACT, TORT, BREACII OF DUTY AND ALL OTIIER COMMON LAW OR STATUTORY BASIS. Each party hereby submits to the exclusive jurisdiction of the state and federal courts located in the State of Delaware. If the jury waiver set forth in this Section is not enforceable, then any dispute, controversy or claim arising out of or relating to this Agreement or any of the transactions contemplated herein will be finally settled by binding arbitration in Delaware in accordance with the then current Commercial Arbitration Rules of the American Arbitration Association by one arbitrator appointed in accordance with said rules. The arbitrator shall apply Delaware law to the resolution of any dispute, without reference to rules of conflicts of law or rules of statutory arbitration. Judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. Notwithstanding the foregoing, the parties may apply to any court of competent jurisdiction for preliminary or interim equitable relief, or to compel arbitration in accordance with this paragraph. The expenses of the arbitration, including the arbitrator's fees and expert witness fees, incurred by the parties to the arbitration, may be awarded to the prevailing party, in the discretion of the arbitrator, or may be apportioned between the parties in any manner deemed appropriate by the arbitrator. Unless and until the arbitrator decides that one party is to pay for all (or a share) of such expenses. both parties shall share equally in the payment of the arbitrator's fees as and when billed by the arbitrator.

[signature page follows]

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IN WITNESS WHEREOF, the parties have executed this Agreement or caused their duly authorized officers to execute this Agreement as of the date first above written.

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Disclosure Schedules/ Exhibits

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Exhibit 4.32

TERMS AND CONDITIONS

1. Sale. In consideration of the payment of the Purchase Price specified above, Purchaser purchases from merchant, and Merchant sell to Purchaser, the Amount Sold. In connection with such sale, Merchant agrees to remit to Purchaser the Daily Percentage of each of merchant's future accounts and contract rights arising from and relating to the payment of monies from the use by Merchant's customers of VISA, MasterCard, American Express, EBT and /or Discover credit cards, charge cards, debit cards and/or prepaid cards ("Future Receivables") to purchase Merchant's products and/or services in accordance with the terms of this agreement until the Amount Sold has been received by Purchaser, Purchaser purchases the Future Receivables free and clear of all claims, liens or encumbrances of any kind whatsoever. Merchant agrees that this Agreement applies to Merchant's entire right, title and interest in the Future Receivables up to the Amount Sold. The terms and conditions of this Agreement shall remain in full force and effect until the Amount Sold has been delivered to Purchaser subject to the terms of this Agreement. Merchant acknowledges Purchaser and Merchant may have entered into previous Future Receivables Sale Agreement ("Prior Agreements"). Furthermore, the Prior Agreements may have outstanding balances of the Amount Sold ("Prior Amount Sold") and an associated Purchase Price that purchased the Prior Amount Sold ("Prior Purchase Price") (If applicable, included in Exhibit A, attached hereto). Merchant acknowledges that any prior Purchase Price is included in the Purchase Price and any Prior Amount Sold is included in the Amount Sold. Merchant agrees that Merchant is only eligible to receive the Purchase Price less the Prior Purchase Price. Merchant and Purchaser agree that this sale and purchase is final and Merchant has no right to repurchase or resell the Future Receivables or any portion thereof, except as set forth in Section 6 below. Without limiting the generality of the preceding sentence, Purchaser shall have no obligation to refund or return the Amount Sold or any portion thereof to Merchant in the event a card issuer, card association, Merchant or other entity initiates a refund, credit, reversal or chargeback of a transaction subject to this Agreement. Merchant and Purchaser agree that the Purchase Price paid to Merchant is a purchase of the Future Receivables and is not intended to be, nor shall it be construed as, a loan from Purchaser to Merchant. Merchant understands, agrees and represents that this transaction is made for business or commercial purposes and that any account from which the Daily Percentage is forwarded to Purchaser is not maintained for personal, family or household purposes. Merchant shall permit purchaser to access all financial records of Merchant, including, but not limited to, all bank statements and credit card statements, that reflect the first 120 calendar days after the date of this Agreement ("120 Days"), for the purpose of comparing the Daily Percentage received to the total revenues received during the 120 days.

2. Term; Timing; Method of Payment; Processing Trial. The term of this Agreement is from the date Purchaser pays the Purchase Price or a portion thereof to Merchant until the date that the entire Amount Sold has been remitted to and received by Purchaser ("Term"). Merchant and Purchaser agree that Purchaser shall pay the Purchase Price or any portion thereof to Merchant only at a time, and through a method, acceptable to Purchaser and at Purchaser's sole discretion. Merchant and Purchaser also agree that Purchaser, in its sole discretion, may refuse to pay the Purchase Price, or any portion thereof, to merchant and cancel this Agreement at any time prior or the entire Purchase Price being paid by Purchaser to Merchant. After this Agreement has been signed by Merchant, Purchaser has the option, in its sole and absolute discretion, to instruct a card processor approved by Purchaser and utilized by Merchant("Processor") to conduct a process trial (the "Processing Trial") to determine whether the Daily Percentage will be correctly processed and/or reported by Processor to Purchaser. In the event Purchaser determines to conduct a Processing Trial, merchant acknowledges and agrees that Purchaser will make its final decision, in its sole and absolute discretion, whether to purchase the Future Receivables after completion of the Processing Trial. If Purchaser refuses to purchase the Future Receivables, Purchaser will return any receivables collected during the Processing Trial.

3. Waiver. Failure on the part of Purchaser to exercise, or delay in exercising, any right under this Agreement shall not constitute a waiver of such right, nor shall any single or partial exercise by Purchaser of any right under this Agreement preclude any other future exercise of any right. The remedies provided hereunder are cumulative and not exclusive of any remedies provided by law or equity.

4. Granting of Security Interest: Authorization to File Financing Statement.

A. Effective upon an event of default by Merchant under this Agreement, Merchant grants Purchaser a security interest in all of Merchant's present and future accounts, chattel paper, cash, deposit accounts, personal property, assets and fixtures, all licenses and permits, general intangibles, intellectual property, instruments, equipment, and inventory wherever located, and all proceeds and revenue now or hereafter owned or acquired by Merchant from any and all of the foregoing. Merchant hereby authorizes Purchaser to file a financing statement under the Uniform Commercial Code ("UCC") to evidence (i) the sale of the Future Receivables under this Agreement, and (ii) the security interest granted by Merchant under this Agreement. If Merchant files a bankruptcy petition, then Merchant agrees that the date of the event of default, as related to granting a security interest to Purchaser, shall occur on the date that Purchaser filed the financing statement as authorized herein.

B. The UCC filing shall state that the sale of the Future Receivables is intended to be a sale and not an assignment for security.

C. Merchant and Purchaser agree that the UCC filed by Purchaser shall be effective and apply to all subsequent future receivables sale agreements and the amounts advanced thereunder. Merchant further agrees that Purchaser shall not be required to file an amendment to or extension of the UCC initially filed, or a new UCC, relating to any subsequent future receivables sale agreements and amounts advanced thereunder to obtain the same rights granted under this provision.

D. It is the intent of the Merchant, Guarantor, and Purchaser for this Agreement to apply to subsequent advances , as it relates to the determination of the UCC filing date for the subsequent advances to the Merchant. The UCC filing date relating to the initial advance shall apply to any and all subsequent advances to merchant.

E. Purchaser reserves the right to obtain reimbursement from Merchant for all costs associated with the filing of any UCC financing statements, including a $95 charge for each UCC financing statement filed upon completion of paying the Amount Sold.

5. Non-Loan Advance. Because this is not a loan, Purchaser does not charge any interest, finance, points, late fees or similar fees (except as permitted by applicable law in connection with civil judgements). Purchaser is purchasing the Future Receivables at a discount. Because the transaction evidenced by this Agreement is not a loan, there are no scheduled payments and no fixed repayment term.

6. Right to Cancel. Merchant may cancel this transaction at any time prior to midnight on the fifth business day after Purchaser forwards the Purchase Price to Merchant. In order for such cancellation to be effective, Merchant must return the entire Purchase Price, including any prepaid Purchase Price, to Purchaser by midnight on the fifth business day after receipt of the Purchase price.

7. Merchant's Representations and Convenants; Events of Default. Events of Default. Merchant's breach of any of the following representations or covenants contained in this Section 7 shall constitute a "default" or an "event of default" under this Agreement:

A. As of the date of this Agreement, Merchant represents the following: (i) the Future Receivables are not subject to any claims, charges, liens, restrictions, encumbrances or security interests of any nature whatsoever, (ii) Merchant has not sold the Future Receivables to another party; (iii) Merchant is not currently a party to any other future receivables sales agreements or factoring agreements; (iv) Merchant has not declared bankruptcy or had an involuntary petition for bankruptcy brought against it; (v) Merchant is not contemplating the filing of a bankruptcy petition or closing Merchant's business (Merchant's filing for bankruptcy or closing its business within 90 days of the date of this Agreement shall constitute prima facie evidence that Merchant breached this provision), and Merchant does not anticipate that an involuntary petition for bankruptcy will be brought against it (an involuntary petition for bankruptcy being brought against Merchant within 90 days of the date of this Agreement shall constitute prima facie evidence that Merchant breached this provision); (vi) Merchant is not contemplating engaging in any transaction involving the sale of Merchant, either by an issuance, sale, or transfer of ownership interests in Merchant, that results in a change in ownership or voting control of Merchant, or the sale or transfer of substantially all of the assets of Merchant (Merchant selling its business or substantially all of the assets of the business within 90 days of the date of this Agreement shall constitute prima facie evidence that Merchant breached this provision), (vii) all information provided by Merchant to Purchaser in this Agreement, in Merchant's application, or otherwise in connection with this Agreement, and all of Merchant's financial statements, credit card processing statements, bank statements and other financial documents provided to Purchaser are true and correct and accurately reflect Merchant's financial condition and results of operations; (viii) Merchant possesses and is in compliance with all permits, licenses, approvals, consents and authorizations necessary to conduct its business; (ix) Merchant is in compliance with all of its material contracts, including, but not limited to, lease agreements, agreements for supply of alcoholic beverages, and/or agreements for supply of utilities; (x) Merchant owns all of the assets, inventory, and property located at the physical address listed on page 1 of this Agreement; (xi) Merchant and the person(s) signing this Agreement on behalf of Merchant have full power and authority to enter into and perform the obligations contained in this Agreement and this Agreement does not violate the terms of any other agreement to which Merchant is a party; and (xii) Merchant is not delinquent with any taxing authority as it relates to all business and sales taxes, including, but not limited to, income tax, sales tax, liquor/alcohol tax, franchise tax and employee related taxes, unless specifically disclosed in writing to Purchase prior to delivery of the Purchase Price. Any breach of the foregoing representations may constitute a separate cause of action for fraud or intentional misrepresentation by Merchant and/or Owner and/or Guarantor.

B. During the Term of this Agreement, Merchant agrees to the following covenants;(i) Merchant will not enter into any arrangement, agreement,or commitment that relates to or involves the Future Receivables, whether in the form of a sale or purchase of, a loan against, or the sale or purchase of credits against, the Future Receivables or future credit card sales with any person or entity other than Purchaser; (ii) Merchant will not conduct business under any name other than as disclosed herein; (iii) Merchant will not change its business location, business name, entity type, or state of formation without the prior written consent of Purchaser; (iv) Merchant will not suspend, dissolve, or close its business without providing Purchaser thirty (30) days' notice; (v) Merchant will not file for bankruptcy under any Title of the United States Bankruptcy Code without providing Purchaser one (1) days' notice; (vi) Merchant will not consent to an involuntary petition for bankruptcy being brought against it; (vii) Merchant will not change Processor or add any credit card processor(s) without the prior written consent of Purchaser; (viii) Merchant will not take any action or offer any incentive - economic or otherwise - to discourage the use of credit cards, debit cards or other payment cards for the purchase of Merchant's products and/or services; (ix) Merchant will not permit any event to occur that may have an adverse effect on the use, acceptance or authorization of credit cards, debit cards, or other payment cards for the purchase of Merchant's products and/or services; (x) Merchant will not permit any event to occur that could cause a diversion of any of Merchant's Future Receivables from Processor to any other entity; (xi) Merchant will not change its arrangements with Processor or amend its processing agreement with Processor in any way that is adverse to Purchaser, (xii) Merchant will not change its financial institution or bank account(s) (including the Lockbox Account (defined below), if applicable) without the prior written consent of Purchaser; (xiii) Merchant will batch out receipts with Processor a minimum of fifteen (15) days each month; (xiv) Merchant will not permit another person or company other than Purchaser, including, without limitation, a franchisor company (if Merchant is a franchisee), to assume or take over the operation and/or control of the Merchant's business or any of Merchant's business locations; (xv) Merchant will possess and maintain insurance in such amounts and against such risks as are necessary to protect its business and assets and shall show proof of such insurance upon demand by Purchaser; (xvi) Merchant will comply with all permits, licenses, approvals, consents and authorizations necessary to conduct its business (xvii)Merchant will pay its debts as they come due, including, but not limited to, rent, sales tax, employment tax, and liquor/alcohol tax; (xviii) Merchant will not breach or be in default under any of its material contracts, including, but not limited to, lease agreements, agreements for supply of alcoholic beverages, and agreements for supply of utilities; (xix) Merchant will not allow the lapse, suspension or forfeiture of any of Merchant's permits or licenses; (xx) Merchant will sign any and all documents that Purchaser, in its sole discretion, deems necessary to effectuate Merchant's obligations under this Agreement, including, but not limited to, a statement that this Agreement is unmodified and in full force and effect (or, if there have been modifications, that the same is in full force and effect as modified and stating the modifications; (xxi) Merchant will provide Purchaser with copies of all documents related to Merchant's card processing activity and financial and banking affairs (including bank statements, credit card processing statements and income statement) within two (2) business days of a request by Purchaser; (xxii) Merchant, Owner and Guarantor authorize Purchaser to obtain and receive information regarding the commercial lease for the physical location of Merchant's business from any applicable leasing company and/or agent, and will sign any and all documents that leasing company and/or agent deem necessary to provide information regarding the lease to Purchaser; (xxiii) Merchant will permit Purchaser and its agent to conduct a site inspection of Merchant's business, including an inspection of Merchant's credit card terminals, at any time without notice to Merchant; (xxiv) Merchant will not change any information associated with the Processing Portal (defined below), including, but not limited to, the user name and password, without Purchaser's prior written consent. In the event any information associate with the Processing Portal is changed, Merchant will provide Purchaser with the new information within two (2) business days. Purchaser and Merchant acknowledge and agree that Merchant going bankruptcy or out of business, in and of itself, does not constitute a breach of this Agreement.

8. Attorney in Fact. Merchant hereby makes, constitutes and appoints Purchaser (with full power of substitution) its true and lawful attorney in fact: (i) to execute and/or authenticate on Merchant's behalf and file financing statements under the UCC consistent with Section 7 and any other documents necessary or desirable to perfect or otherwise further the security interest granted herein; and (ii) to execute any third party agreements or assignments to grant Purchaser control over the collateral (to the extent control is necessary to perfect Purchaser's security interest in such collateral), including third party agreements between Merchant, Purchaser, and depository institutions, securities intermediaries, or other supporing obligations which third party agreements direct the third party to accept direction from Purchaser regarding the maintenance and disposition of the collateral and the products and proceeds thereof. It is understood and agreed that the foregoing power of attorney shall be deemed to be a power coupled with an interest which cannot be revoked until the termination of thisAgreement in accordance with the terms hereof.

9. Franchises. If Merchant is a Franchise, the Franchiseee must secure from Franchisor the acknowledgement of this sale of Future Receivables. Prior to Purchase rdelivering the Purchase Price to Merchant, Merchant must provide such acknowledgement in writing to Purchaser. Additionally, Merchant shall obtain a written agreeement from Franchisor to allow the outstanding balance of any Amount Sold to transfer to any successor of Merchant, including Franchisor, as it relates to Merchant's current franchise location(s).

10. Notice and Prior Consent. Merchant will not undertake any transaction involving the sale of Merchant, either by an issuance, sale, or transfer of ownership interests in Merchant, that results in a change in ownership or voting control of Merchant, or the sale or transfer of substantially all of the assets of Merchant without (i) providing notice to Purchaser as required by Section 19 of this Agreement, (ii) obtaining prior written consent of Purchaser, and (iii) including in any written agreement between merchant and any purchaser or transferee of Merchant's business and/or assets, that all of Merchant's obligations under this Agreement Are assumed by the purchaser or transferee of the Merchant. Merchant further agree to enter into a written agreement, as mentioned in (iii) above, satisfactory to Purchaser.

11. Authorization to Contact Financial Institutions. Merchant hereby authorizes Purchaser to contact any financial institution, bank, or credit card processor at which Merchant maintains an account or conducts business to verify any information provided by Merchant to Purchaser. If Merchant fails to remit payment of the Daily Percentage to Purchaser for more than five (5) consecutive calendar days, then Merchant is considered in default under this Agreement. In the event of such a default, Merchant grants Purchaser the right to notify such financial institutions, banks and credit card processors of such default.

12. Liquidated Damages for Breach of Covenants. In the event that Merchant breaches any of the covenants set forth in Section 7.B. of this Agreement, Merchant agrees that purchaser shall suffer $10,000.00 in liquidated damages and Merchant shall pay to Purchaser $10,000.00 for any such breach. Such liquidated damages; (i) shall be due and payable to Purchaser on demand; (ii) are in addition to all other damages Purchaser may seek under this Agreement, at law and/or in equity, including, but not limited to, recovery of the outstanding Amount Sold; and (iii) shall not be construed as a waiver of any breach or event of default under this Agreement, or otherwise reduce or limit Purchaser's rights and/or remedies provided under this Agreement, at law and/or in equity.

13. Daily Percentage.

A. Purchaser agrees to accept the remittance of the Daily Percentage in one of the following ways; (i) directly from Merchant's credit card processor; (ii) by debiting the Merchant's card processing deposit account; or (iii) by debiting a deposit account established by Merchant that is approved by Purchaser. Purchaser may decide from time to time, in its sole discretion, which one or more of the three methods it will accept for the remittance of the Daily Percentage.

B. If Purchaser agrees to accept the remittance of the Daily Percentage directly from the Merchant's card Processor, Merchant agrees to enter into an agreement with the Processor acceptable to Purchaser that authorizes Processor to pay the Daily Percentage directly to Purchaser rather than to Merchant until an Amount Sold has been forwarded by Processor to Purchaser. This authorization is irrevocable, absolute and unconditional. Merchant further acknowledges and agrees that Processor will be acting on behalf of Purchaser to collect the Daily Percentage. Merchant hereby irrevocably grants Processor the right to hold the Daily Percentage and to pay Purchaser directly ( at, before, or after the time Processor credits or remits to merchant the balance of the Future Receivable not sold by Merchant to Purchaser) until the entire Amount Sold has been forwarded to Purchaser, Merchant acknowledges and agrees that Processor may provide Purchaser with Merchant's credit card, debit card, and other payment card and instruments processing history, including, without limitation, Merchant's chargeback experience and any communications about Merchant received by Processor from a card processing system, as well as any other information Purchaser deems pertinent. Merchant understands that Purchaser does not have any power or authority to control Processor's actions with respect to the authorization, clearing, settlement and other processing of transactions, and that Purchaser is not responsible for Processor's actions. Merchant agrees to hold Purchaser harmless for Processor's actions and omissions.

C. If Purchaser agrees to accept remittance of the Daily Percentage by debiting Merchant's card processing deposit account, Merchant irrevocably authorizes Purchaser or its designated successor or assigned to withdraw a daily amount ("ACH Amount") by initiating a debit via the Automatic Clearing House ("ACH") system to Merchant's card processing deposit account (as listed in Merchant's application) or such other deposit account that merchant may instruct Purchaser to debit from time to time ("Bank Account"). Merchant will provide Purchaser with the user name, password, web site address, and any other necessary information required to electronically access Merchant's card processing portal ("Processing Portal"). By the twentieth (20th) of every month, provided Purchaser has access to Merchant's Processing Portal or Merchant has timely provided Merchant's prior month's processing statement. Merchant shall allow Purchaser to reconcile the prior monthly total of ACH Amounts withdraws ("Monthly Withdraws") with the prior month's Daily Percentage ("Actual Receivable Amount") ("True Up"). For clarification, if the Monthly withdraws are greater than the Actual Receivable Amount, Purchaser will owe Merchant the difference. Accordingly, if the Monthly Withdraws are less than the Actual Receivable Amount, Merchant will owe Purchaser the difference. Purchaser will provide Merchant with notice of every True Up. Purchaser may, at its sole discretion, pro-rate the True Up over a period of time not to exceed thirty one days by raising or lowering the ACH Amount accordingly. Merchant convenants to provide the prior month's credit card processing statement by the fifteenth (15th) of every month if a Processing Portal does not exist or Purchaser does not have access for any reason. Failure to timely provide the prior month's credit card processing statement permanently relieves Purchaser of its obligation to True Up that associated month. If Purchaser does not have access to the Processing Portal and Merchant does not timely provide the prior month's credit card processing statement, ten percent (10%) will be added to the Daily Percentage for the current month. Merchant covenants to not allow three (3) ACH Amounts to return unpaid or be rejected for any reason within thirty (30) days of each other. Merchant represents that the Bank Account is established for business or commercial purposes only and is not used for personal, family or household purposes. The attached, titled "ACH Addendum", further supplements this Agreement. Therefore, the ACH Addendum and all terms, obligations, representations, and covenants contained therein are incorporated into this Agreement.

D. If Purchaser agrees to accept the remittance of the Daily Percentage by debiting a deposit account established by Merchant that is approved by Purchaser ("Lockbox Account"), Merchant agrees to complete all necessary forms to establish the Lockbox Account, Merchant acknowledges and agrees that any funds deposited into the Lockbox Account by Merchant's processor will remain in the Lockbox Account until the Daily Percentage is withdrawn by Purchaser and then the remaining funds, minus any amount required to maintain the minimum balance for the Lockbox Account, will be forwarded to Merchant's Bank Account. If the Lockbox Account requires a minimum account balance, Purchaser may, in its sole discretion, fund the required minimum balance for the Lockbox Account out of the Purchase Price. All fees incurred in opening and maintaining the Lockbox Account shall be paid by Merchant. Upon Merchant's breach of or default under this Agreement, Merchant shall cause Processor and all other card processors utilized by Merchant to forward all proceeds from all credit and debit card transactions to the Lockbox Account and Merchant shall appoint Purchaser "Acting Agent" over the Lockbox Account. In connection with same, Merchant shall not be entitled to any of the funds in the Lockbox Account until a written request for a specified amount of the funds is provided to Purchaser and Purchaser, in its sole discretion, approves such written request. As Acting Agent, Purchaser has the full power and authority to direct the funds located in the Lockbox Account to be paid to Purchaser until the outstanding Amount Sold is remitted to and received by Purchaser.

14. Miscellaneous Service Fees. Merchant shall pay all fees for services relating to the origination and maintenance of all accounts under this Agreement. Merchant agrees to pay $495.00 out of the Purchase Price to cover the underwriting and origination costsassociated with the parties entering into this Agreement. If Merchant utilizes a Lockbox Account described in Section 13 of this Agreement, Merchant shall incur a one-time charge of $375 to be paid from the Purchase Price, which is in addition to the charge for the underwriting and origination fees. If applicable, fund transfers from the Lockbox Account to Merchant's operating bank account will be charged at $5.00 per month via ACH. Additional copies of any monthly statements provided to Merchant by Purchaser in connection with this Agreement will be available at a cose of $5.00 per page. Purchaser may increase any of the charges under this provision as it deems necessary in its sole discretion.

15. Telephone Monitoring, Recording and Contacts. To ensure that all merchants receive quality service, Purchaser may choose to monitor and/or record telephone calls with merchants and their employees or agents. These calls are monitored and/or recorded solely for evaluation by supervisors, training, monitoring for compliance purposes, and quality control. Merchant agrees that all calls between Purchaser and Merchant or a representative of merchant may be monitored and/or recorded for these purposes. Merchantfurther agrees that: (i) it has an established business relationship with Purchaser and may be contacted from time to time regarding transactions with Purchaser; (ii) such contacts are not considered unsolicited or inconvenient; and (iii) any such contact may be made by using any cellular or other phone number Merchant or its representative(s) provided to Purchase, any e-mail address(es) Merchant or its representative(s) provided to Purchaser, or an automated dialing and announcing or similar device, unless prohibited by law.

16. Miscellaneous. Merchant shall have no right to assign its interest hereunder without the p rior written consent of Purchaser. This Agreement shall be binding upon Merchant and its successors and permitted assigns and shall inure to the benefit of Purchaser and its successors and assigns. This Agreement shall not constitute a contract until fully executed by all parties hereto. This Agreement constitutes the entire agreement between the parties, and no representations, agreements, or understandings of any kind (other than the information contained in Merchant's application as referenced below), either written or oral, shall be binding upon the parties unless expressly contained herein. This Agreement is a complete and exhaustive statement of the terms of the parties' agreement, which may no be explained or supplemented by evidence of xonsistent additional terms or contradicted by evidence of any prior or contemporaneous agreement. This Agreement supersedes all prior agreements and understandings, whether oral or in writing, relating to the subject matter hereof unless otherwise specifically reaffirmed or restated herein. No modification of this Agreement shall be effective unless it is in writing and signed by each of the parties. If any provisions of this Agreement are found to be invalid, illegal or unenforceable in any respect, the remaining provisions shall not be affected in any manner. The parties agree to execute such further and additional documents, instruments, and writings as may be necessary, proper, required, desirable, or convenient for the purpose of fully effectuating the terms and provisions of this Agreement. The information submitted by Merchant as part of its application for this transaction is hereby incorporated into and made a part of this Agreement. The signatures to this Agreement may be evidenced by facsimile or PDF copies or other electronic means reflecting the parties' signature hereto, and any such copy or signature shall be enforceable as if it were an original signature.

17. Governing Law. Purchaser and Merchant agree that this Agreement is accepted and performed in Texas. This Agreement and all claims shall be governed by; and construed in accordance with, the laws of the State of Texas without regard to principles of conflicts of laws. All litigation, suits, court proceedings and other actions relating to , arising out of, or in connection with the Agreement, whether founded in contract, tort or otherwise, shall be submitted to the in personam jurisdiction of the state courts of Texas, and the exclusive venue for all such suits, proceedings and other actions shall be in Dallas County, Texas. No action may be brought in any other state or jurisdiction. Merchant and Purchaser hereby waive any claim against or objection to the in personam jurisdiction and venue of the state courts of Dalls County, Texas. Purchaser and Merchant hereby irrevocably waive any objection and any right of immunity on the ground of venue or the convenience of the forum, to the jurisdiction of such courts, and from the execution of judgements resulting therefrom. ALL PARTIES TO THIS AGREEMENT HEREBY WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING, SUIT, COUNTERCLAIM, CROSS-CLAIM, OR THIRD-PARTY CLAIM BROUGHT BY ANY OF THE PARTIES HERETO ON ANY MATTERS WHATSOEVER ARISING OUT OF OR IN ANY WAY RELATED TO OR CONNECTED WITH THIS AGREEMENT. This Section shall survive any termination or transfer of this Agreement.

18. Remedies; Self-Help. In the event Merchant breaches, or defaults under, any of the provisions of this Agreement, including, but not limited to, the representations and covenants made in Section 7, the entire outstanding Amount Sold plus any liquidated damages shall become immediately due and payable by Merchant to Purchaser, and Purchaser shall be entitled to all remedies available under law and in equity. In the event of a breach or default by Merchant, Merchant further agrees that Purchaser may automatically debit from any of Merchant's bank accounts, via the ACII or otherwise, all or any portion of the outstanding Amount Sold plus any liquidated damages or may instruct Processor to forward to Purchaser, without any prior notice to merchant, all or any portion of the outstanding Amount Sold plus any liquidated damages. In addition to the foregoing, in the event Merchant breaches any of the provisions of this Agreement or is in default under this Agreement, Purchaser shall have the right, without notice to Merchant, to enter upon the premises of any or all of Merchant's business locations and take over the operation and/or control of Merchant's business, take all actions necessary to ensure that Processor is the only credit card and debit card processor utilized by Merchant's business, and direct all of the proceeds from the operations of Merchant's business to Purchaser until the outstanding Amount Sold plus any liquidated damages are remitted to and received by Purchaser, with any and all out of pocket expenses incurred by Purchaser in connection with such operation being charged back to merchant. By entering into this Agreement, Merchant hereby consents to such take over and/or control by Purchaser upon a breach of or default by merchant, and appoints Purchaser as its agent and attorney-in-fact with full authority to take any action and execute any instrument or document Purchaser deems necessary until the outstanding Amount Sold plus any liquidated damages is remitted to and received by Purchaser. Upon notice by Purchaser of Merchant's breach or default under this Agreement, Merchant agrees to enter into an assignment of lease acceptable to Purchaser and Merchant's landlord, and all other necessary documentation, in order to transfer Merchant's rights under its lease to Purchaser. Merchant further agrees that Purchaser may enter into an agreement with Merchant's landlord giving Purchaser the right to assign Merchant's lease to another merchant capable of operating a business comparable to Merchant's at such premises. If Merchant breaches covenant Section 7 (B)(i), Purchaser, at its sole discretion, may increase the Daily Percentage by a maximum of ten percent (10%) above the agreed upon Daily Percentage.

19. Required Notifications. Merchant, Owner and Guarantor are required to give Purchaser 24 hours' written notice prior to Merchant, Owner or Guarantor filing for bankruptcy relief under any Title of the United States Bankruptcy Code. Merchant is required to give Purchaser written notice thirty days prior to Merchant suspending, dissolving or closing its business. Merchant is required to give Purchaser written notice thirty days prior to Merchant completing a transaction involving the sale of Merchant, either by an issuance, sale, or transfer of ownership interests in Merchant that results in a change in ownership or voting control of Merchant, or the sale or transfer of substantially all of the assets of Merchant.

20. Reliance on Information. Merchant acknowledges and agrees that all information (financial and other) provided by or on behalf of Merchant has been relied upon by Purchaser in connection with its decision to purchase the Amount Sold of Future Receivables from Merchant.

21. Terminated Merchant File and Match File. Merchant expressly acknowledges that a Terminated Merchant File ("TMF"), or any successor thereto, is maintained by MasterCard and/or VISA containing the business name and names and identification of principals of merchants that have been terminated for one or more of the reasons specified in the MasterCard and/or VISA operating regulations. Such reasons include, but are not limited to, fraud, counterfeit drafts, unauthorized transactions, excessive charge-backs and retrieval requests, money laundering, or where a high security risk exists. MERCHANT ACKNOWLEDGES THAT PROCESSOR AND PURCHASER ARE REQUIRED TO REPORT THE BUSINESS NAME OF THE MERCHANT AND THE NAMES AND IDENTIFICATION OF ITS PRINCIPALS TO THE TMF WHEN A MERCHANT IS TERMINATED FOR ONE OR MORE OF THE REASONS SPECIFIED IN THE MASTERCARD AND/OR VISA OPERATING REGULATIONS, MERCHANT EXPRESSLY AGREES AND CONSENTS TO SUCH REPORTING BY PROCESSOR AND PURCHASER, AND RELEASES EACH FROM ANY LIABILITY AND DAMAGES FOR DOING SO IN GOOD FAITH.

22. Attorney's Fees and Costs. In the event of a default by Merchant, Purchaser shall be entitled to recover from Merchant all costs of collection. For the purpose of this Section "costs of collection" shall include the costs, including attorney's fees and court costs, associated with defending, protecting or enforcing Purchaser's rights under this Agreement, including the exercise of Purchaser's rights pursuant to Section 18 of this Agreement and in any bankruptcy proceeding. If Merchant files an action against Purchaser and the matter is dismissed or Purchaser prevails in the matter, Merchant agrees to pay all of Purchaser's attorney's fees and costs incurred in the matter, whether in court or arbitration. Any payments under an indemnity claim pursuant to Section 26 of this Agreement shall include all the foregoing costs and expenses, as well as interest on thereon at the rate of 1.5% per month from the date the obligation is due to the Purchaser.

23. Reporting. Merchant and Guarantors (defined below) understand that Purchaser will obtain a credit report on Merchant, Guarantors and any individual who signs this Agreement. The report Purchaser obtains may include, but is not limited to, the Merchant's Guarantors' and individuals' credit history or similar characteristics, employment and education verifications, social security verification, criminal and civil case history, Department of Motor Vehicle records, any other public records, and any other information bearing on credit standing or credit capacity.

24. Publicity. Merchant, Guarantors and any individual who signs this Agreement authorizes Purchaser to use its, his or her name in a listing of clients and in advertising and marketing materials.

25. Facsimile and PDF Acceptance. Facsimile and PDF signatures shall be deemed acceptable for all purposes.

26. Indemnification. Merchant and Guarantor hereby agree to indemnify and hold Purchaser and its assigns, directors, managers, officers, members, employees, agents, affiliates, successors, direct and indirect subsidiaries, and direct and indirect parent entities harmless against any claimed demand, right, damage, liability, debt, account, action, cause of action, cost, or expense (including attorney's fees and costs actually incurred) arising out of or in any way connected with the defense of any breach of this Agreement by Merchant and/or Guarantor.

27. Consent to Participation. Merchant agrees and consents to Purchaser's sale or transfer, whether now or later, of one or more participation interests in the Amount Sold to one or more purchasers, whether related or unrelated to Purchaser. Purchaser may provide, without any limitation whatsoever, to one or more purchasers, or potential purchasers, any information or knowledge Purchaser may have about Merchant or about any other matter relating to the Amount Sold, and Merchant hereby consents to such disclosure. Merchant waives any and all notices of sale of participation interests, as well as all notices of any repurchase of such participation interests. Merchant agrees that the purchasers of any such participation interests will be considered third party beneficiaries and the absolute owners of such interests in the Amount Sold and will have all the rights granted under the participation agreement or agreements governing the sale of such participation interests. Merchant unconditionally agrees that either Purchaser or such purchaser may enforce Merchant's obligation under this Agreement irrespective of the failure or insolvency of any holder of any interest in the Amount Sold. Merchant further agrees that the purchaser of any such participation interests may enforce its interests irrespective of any personal claims or defenses that Merchant may have against Purchaser.

Free Will; Opportunity to Consult with Counsel. Each party hereto represents and warrants that he/she/it is executing this Agreement on his/her/its own free will and that he/she/it is not doing so as the result of any duress or coercion. Each party represents and warrants that the party (i) has read this Agreement, (ii) understands and agrees to be fully bound by its terms, (iii) has had the opportunity to consult with counsel, and (iv) executes this Agreement voluntarily with full knowledge of its legal significance.

29. Performance Guarantor(s). In the Event Merchant breaches this Agreement in any manner, each Guarantor listed on the signature page of this Agreement is fully liable to Purchaser for the entire Amount Sold plus any liquidated damages and permitted fees and costs under this Agreement less the amount received by Purchaser from the Daily Percentage. Each Guarantor hereby assumes and, jointly and severally, guarantees the obligations of Merchant arising under this Agreement. This guarantee is binding upon each Guarantor and the Guarantor's heirs, legal representatives, successors and assigns. Each Guarantor hereby authorizes inquiry into the Guarantor's personal financial information, including, but not limited to, banking relationships, references given, consumer reports and credit bureaus, and criminal and civil matters. Without limiting the generality of the preceding sentence, each Guarantor hereby authorizes Purchaser to obtain consumer and/or investigative reports from one or more consumer reporting agencies about Guarantor. The Guarantors to this Agreement are hereby notified that a negative credit report reflecting on his/her credit record may be submitted to a credit reporting agency if the terms of this Agreement are breached. Each Guarantor acknowledges receiving a copy of this Agreement and having read the terms of this Agreement, including, without limitation, the guarantee set forth in this Section, and the Guarantor's signature below shall serve as confirmation that the Guarantor has read, understands and agrees to be bound by all terms and conditions contained in this Agreement.

(Signature page follows)

Exhibit 4.33

NEITHER THE ISSUANCE AND SALE OF THE SECURITl.ES REPRESENTED BY THIS NOTE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPT ABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAYBE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

Principal Amount: S190,000

Date: June 19, 2015

CONVERTIBLE PROMISSORY NOTE

Preferred Restaurant Brands, Inc., F/K/A Dixi Foods International Inc. (hereinafter called the "Company" ), hereby promises to pay to the order of GHS Investments, LLC, a Delaware Limited Liability Company, or its registered assigns (the "Holder") the sum of$190,000 together with any interest as set forth herein, on or before July 20, 2015 (the "Maturity Date"). This Note shall have an original issuance discount of $40,000.

Any amount of principal or interest on this Note which is not paid when due shall bear interest at the rate of twenty two percent (22%) per annum from the due date thereof until the same is paid (vDefault Interest"). Interest shall commence accruing on the date that the Note is fully paid and shall be computed on the basis of 11 365-day year and the actual number of days elapsed. All payments due hereunder (to the extent not converted into common stock) shall be made in lawful money of the United States of America.

All payments shall be made at such address as the Holder shall hereafter give to the Company by written notice made in accordance with the provisions of this Note. Whenever any amount expressed to be due by the terms of this Note is due on any day which is not a business day, the same shall instead be due on the next succeeding day which is a business day and, in the case of any interest payment date which is not the date on which this Note is paid in full, the extension of the due date thereof shall not be taken into account for purposes of determining the amount of interest due on such date. As used in this Note. the term "business day" shall mean any day other than a Saturday, Sunday or a day on which commercial banks in the city of New York, New York are authorized or required by law or executive order to remain closed. Each capitalized term used herein, and not otherwise defined, shall have the meaning ascribed thereto in the supporting documents of same date (attached hereto).

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

The following terms shall apply to this Note:

ARTICLE I. CONVERSION RIGHTS

1.1 Optional Conversion. Following any Event of Default, the Holder shall have the right to convert all or any part of the outstanding and unpaid principal amount of this Note into fully paid and non- assessable shares of Common Stock. as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities of the Company into which such Common Stock shall hereafter be changed or reclassified at the conversion price (the "Conversion Price'') determined as provided herein (a "Conversion"); provided. however, that in no event shall the Holder be entitled to convert any portion of this Note in excess of that portion of this Note upon conversion of which the sum of (I) the number of shares of Common Stock beneficially owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unconverted portion of the Notes or the unexercised or unconverted portion of any other security of the Company subject to a limitation on conversion or exercise analogous to the limitations contained herein) and (2) the number of shares of Common Stock issuable upon the conversion of the portion of this Note with respect to which the determination of this proviso is being made. would result in beneficial ownership by the Holder and its affiliates of more than 4.99% of the outstanding shares of Common Stock, For purposes of the proviso to the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934. as amended (the "Exchange Act."), and Regulations 130-0. The number of shares of Common Stock to be issued upon each conversion of this Note shall be determined by dividing the Conversion Amount (as defined below) by the applicable Conversion Price then in effect on the date specified in the notice of conversion. (the "Notice of Conversion"), delivered to the Company by the Holder in accordance with the Sections below; provided that the Notice of Conversion is submitted by facsimile or e-mail (or by other means resulting in, or reasonably expected to result in, notice) to the Company before 6:00 p.m., New York, New York time on such conversion date (the "Conversion Date"). The term "Conversion Amount" means, with respect to any conversion of this Note, the sum of (1) the principal amount of this Note to be converted in such conversion ~ (2) at the Company's option, accrued and unpaid interest, if any, on such principal amount at the interest rates provided in this Note to the Conversion Date, plus (3) at the Company's option, Default Interest. if any, on the amounts referred to in the immediately preceding clauses (1) and/or (2) plus (4) at the Holder's option, any amounts owed to the Holder.

1.2 Conversion Price.

(a) Calculation of Conversion Price. Following an Event of Default, Holder, at its discretion, shall have the right to convert this Note in its entirety or in parties) into common stock of the Company valued at the lower of (i) .000 I or (ii) 8 Fifty Percent (50%) discount off of the lowest intra-day trading price for the Company's common stock during the Ten (10) trading days immediately preceding 8 conversion date, as reported by Quotestream,

(b) Conversion Price During Major Announcements. Notwithstanding anything contained in the preceding section to the contrary, in the event the Company (i) makes a public announcement that it intends to consolidate or merge with any other corporation (other than a merger in which the Company is the surviving or continuing corporation and its capital stock is unchanged) or sell or transfer all or substantially all of the assets of the Company or (ii) any person, group or entity (including the Company) publicly announces a tender offer to purchase 50% or more of the Company's Common Stock (or any other takeover scheme) (the date of the announcement referred to in clause (i) or (li) is hereinafter referred to as the "Announcement Date"). then the Conversion Price shall, effective upon the Announcement Date and continuing through the Adjusted Conversion Price Termination Date (as defined below), be equal to the lower of (x) the Conversion Price which would have been applicable for a Conversion occurring on the Announcement Date and (y) the Conversion Price that would otherwise be in effect, From and after the Adjusted Conversion Price Termination Date, the Conversion Price shall be determined as set forth in this Section. For purposes hereof, "Adjusted Conversion Price Termination Date" shall mean. with respect to any proposed transaction or tender offer (or takeover scheme) for which a public announcement as contemplated by this Section has been made, the dale upon which the Company (in the case of clause (i) above) or the person, group or entity (in the case of clause (ii) above) consummates or publicly announces the termination or abandonment of the proposed transaction or tender offer (or takeover scheme) which caused this Section 1.2(b) to become operative.

1.3 Authorized Shares. The Company covenants that during the period the conversion right exists the Company will reserve from its authorized and unissued Common Stock a sufficient number of shares free from preemptive rights, to provide for the issuance of Common Stock upon the full conversion of this Note. The Company is required at all times to have authorized and reserved five times the number of shares that is actually issuable upon full conversion of the Note (based on the Conversion Price of the Notes in effect from time to time)(the "Reserved Amount"). The Reserved Amount shall be increased from time to time in accordance with the Company's obligations.

The Company represents that upon issuance such shares will be duly and validly issued, fully paid and non-assessable. In addition. if the Company shall issue any securities or make any change to its capital structure which would change the number of shares of Common Stock into which the Notes shall be convertible at the then current Conversion Price, the Company shall at the same time make proper provision so that thereafter there shall be a sufficient number of shares of Common Stock authorized and reserved, free from preemptive rights, for conversion of the outstanding Notes.

The Company (i) acknowledges that it will irrevocably instruct its transfer agentto issue certificates for the Common Stock issuable upon conversion of this Note, and (ii) agrees that its issuance of this Note shall constitute full authority to its officers and agents who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for shares of Common Stock in accordance with the terms and conditions of this Note.

If, at any time the Company does not maintain the Reserved Amount it will be considered an Event of Default as defined in this Note.

1 .4 Method .of Conversion.

(b) Surrender of Note Upon Conversion. Notwithstanding anything to the contrary set forth herein, upon conversion of this Note in accordance with the terms hereof, the Holder shall not be required to physically surrender this Note to the Company unless the entire unpaid principal amount of this Note is so converted. The Holder and the Company shall maintain records showing the principal amount so converted and the dates of such conversions or shall use such other method, reasonably satisfactory to the Holder and the Company. so as not to require physical surrender of this Note upon each such conversion. In the event of any dispute or discrepancy, such records of the Company shall, prima facia, be controlling and determinative in the absence of manifest error. The Holder and any assignee, by acceptance of this Note, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of a portion of this Note, the unpaid and unconverted principal amount of this Note represented by this Note may be less than the amount staled on the face hereof.

(c) Payment of Taxes. The Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the issue and delivery of shares of Common Stock or other securities or property on conversion of this Note in a name other than that of the Holder (or in street name), and the Company shall not be required to issue or deliver any such shares or other securities or property unless and until the person or persons (other than the Holder or the custodian in whose street name such shares are to be held for the Holder's account) requesting the issuance thereof shall have paid to the Company the amount of any such tax or shall have established to the satisfaction of the Company that such tax has been paid.

(d) Delivery of Common Stock Upon Conversion. Upon receipt by the Company from the Holder of B facsimile transmission or e-mail (or other reasonable means of communication) of a Notice of Conversion meeting the requirements for conversion as provided in this Section, the Company shall issue and deliver or cause to be issued and delivered to or upon the order of the Holder certificates for the Common Stock issuable upon such conversion within three (3) business days niter such receipt (the "Deadline") (and, solely in the case of conversion of the entire unpaid principal amount hereof. surrender of this Note) in accordance with the terms hereof and the Purchase Agreement.

Within Five (5) business days of having received certificate(s) for common stock pursuant to n Notice of Conversion. Holder may elect to rescind the Notice of Conversion and return the shares, at Holder's expense. to the Company's Transfer Agent. In the event of such rescission, the principal amount outstanding under this Note shall be adjusted to include the Conversion Amount which was deducted from the Note as part of the rescinded Notice of Conversion.

(e) Obligation of Company to Deliver Common Stock. Upon receipt by the Company of a Notice of Conversion, the Holder shall be deemed to be the holder of record of the Common Stock issuable upon such conversion, the outstanding principal amount and the amount of accrued and unpaid interest on this Note shall be reduced to reflect such conversion, and, unless the Company defaults on its obligations under this Article l, all rights with respect to the portion of this Note being so converted shall forthwith terminate except the right to receive the Common Stock or other securities, cash or other assets, as herein provided. on such conversion. If the Holder shall have given a Notice of Conversion as provided herein. the Company's obligation to issue and deliver the certificates for Common Stock shall be absolute and unconditional, irrespective of the absence of any action by the Holder to enforce the same, any waiver or consent with respect to any provision thereof. the recovery of any judgment against any person or any action to enforce the same, any failure or delay in the enforcement of any other obligation of the Company to the holder of record, or any setoff, counterclaim, recoupment limitation or termination. or any breach or alleged breach by the Holder of any obligation to the Company, and irrespective of any other circumstance which might otherwise limit such obligation of the Company to the Holder in connection with such conversion. The Conversion Date specified in the Notice of Conversion shall be the Conversion Date so long as the Notice of Conversion is received by the Company before 6:00 p.m., New York, New York time on such date.

(f) Delivery of Common Stock by Electronic Transfer. In lieu of delivering physical certificates representing the Common Stock issuable upon conversion. provided the Company is participating in the Depository Trust Company ("DTC") Fast Automated Securities Transfer (UP AST') program. upon request of the Holder and its compliance with the provisions contained in Section 1.1 and in this Section 1.4. the Company shall use its best efforts to cause its transfer agent to electronically transmit the Common Stock issuable upon conversion to the Holder by crediting the account of Holder's Broker with DTC through its Deposit Withdrawal Agent Commission ("DW AC") system.

(g) Failure to Deliver Common Stock Prior to Deadline. Without in any way limiting the Holder's right to pursue other remedies, including actual damages and/or equitable relief, the parties agree that if delivery of the Common Stock issuable upon conversion of this Note is not delivered by the Deadline the Company shall pay to the Holder $2,000 per day in cash, for each day beyond the Deadline that the Company fails to deliver such Common Stock. Such cash amount shall be paid to Holder by the fifth day of the month following the month in which it has accrued or, at the option of the Holder (by written notice to the Company by the first day of the month following the month in which it has accrued), shall be added to the principal amount of this Note. in which event interest shall accrue thereon in accordance with the terms of this Note and such additional principal amount shall be convertible into Common Stock in accordance with the terms of this Note. The Company agrees that the right to convert is a valuable right to the Holder. The damages resulting from a failure. attempt to frustrate, interference with such conversion right are difficult if not impossible to qualify. Accordingly the parties acknowledge that the liquidated damages provision contained in this Section are justified. Any delay or failure of performance by the Company hereunder shall be excused if and to the extent caused by Force Majeure. For purposes of this agreement, Foree Majeure shall mean a cause or event that is not reasonably foreseeable and/or caused by the Company, including acts of God, fires, floods, explosions. riots wars, hurricanes. etc.

1.5 Concerning the Shares. The shares of Common Stock issuable upon conversion of this Note may not be sold or transferred unless (i) such shares are sold pursuant to an effective registration statement under the Act or (ii) the Company or its transfer agent shall have been furnished with an opinion of counsel (which opinion shall be in form, substance and scope customary for opinions of counsel in comparable transactions) to the effect that the shares to be sold or transferred may be sold or transferred pursuant to an exemption from such registration or (iii) such shares are sold or transferred pursuant to Rule 144 under the Act (or a successor rule) (URule 144") or (iv) such shares are transferred to an "affiliate" (as defined in Rule 144) of the Company who agrees to sell or otherwise transfer the shares only in accordance with this Section 1.S and who is an Accredited Investor. Except as otherwise provided herein (and subject to the removal provisions set forth below), until such time as the shares of Common Stock issuable upon conversion of this Note have been registered under the Act or otherwise may be sold pursuant to Rule 144 without any restriction as to the number of securities as of a particular date that can then be immediately sold, each certificate for shares of Common Stock issuable upon conversion of this Note that has not been so included in an effective registration statement or that has not been sold pursuant to an effective registration statement or an exemption that permits removal of the legend, shall bear a legend substantially in the following form, as appropriate:

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

The legend set forth above shall be removed and the Company shall issue to the Holder a new certificate therefore free of any transfer legend if (i) the Company or its transfer agent shall have received an opinion of counsel. in form, substance and scope customary for opinions of counsel in comparable transactions. to the effect that a public sale or transfer of such Common Stock may be made without registration under the Act, which opinion shall be accepted by the Company so that the sale or transfer is effected or (il) in the case of the Common Stock issuable upon conversion of this Note, such security is registered for sale by the Holder under an effective registration statement filed under the Act or otherwise may be sold pursuant to Rule 144 without any restriction as to the number of securities as of a particular date that can then be immediately sold. In the event that the Company does not accept the opinion of counsel provided by the Buyer with respect to the transfer of Securities pursuant to an exemption from registration. such as Rule 144 or Regulation S, at the Deadline, it will be considered an Event of Default pursuant to this note.

1.6 Effect of Certain Events.

(a) Effect of Merger. Consolidation. Etc. At the option of the Holder, the sale, conveyance or disposition of all 'or substantially all of the assets of the Company, the effectuation by the Company of a transaction or series of related transactions in which more than50% of the voting power of the Company is disposed of, or the consolidation, merger or other business combination of the Company with or into any other Person (as defined below) or Persons when the Company is not the survivor shall either: (l) be deemed to be an Event of Default (as defined in Article U1) pursuant to which the Company shall be required to pay to the Holder upon the consummation of and as a condition to such transaction an amount equal to the Default Amount (as defined in Article lIl) or (ii) be treated pursuant to Section 1.6(b) hereof. "Person" shall mean any individual, corporation, limited liability company. partnership, association, trust or other entity or organization.

(b) Adjustment Due to Merger. Consolidation. Etc. If, at any time when this Note is issued and outstanding and prior to conversion of all of the Notes, there shall be any merger, consolidation, exchange of shares, recapitalization, reorganization. or other similar event, as a result of which shares of Common Stock of the Company shall be changed into the same or a different number of shares of another class or classes of stock or securities of the Company or another entity, or in case of any sale or conveyance of all or substantially nil of the assets of the Company other than in connection with a plan of complete liquidation of the Company, then the Holder of this Note shall thereafter have the right to receive upon conversion of this Note. upon the basis and upon the terms and conditions specified herein and in lieu of the shares of Common Stock immediately theretofore issuable upon conversion, such stock, securities or assets which the Holder would have been entitled to receive in such transaction had this Note been converted in full immediately prior to such transaction (without regard to any limitations on conversion set forth herein), and in any such case appropriate provisions shall be made with respect to the rights and interests of the Holder of this Note to the end that the provisions hereof (including, without limitation. provisions for adjustment of the Conversion Price and of the number of shares issuable upon conversion of the Note) shall thereafter be applicable. as nearly as may be practicable in relation to any securities or assets thereafter deliverable upon the conversion hereof. The Company shall not affect any transaction described in this Section 1.6(b) unless (a) it first gives. to the extent practicable, thirty (30) days prior written notice (but in any event at least fifteen (15) days prior written notice) of the record date of the special meeting of shareholders to approve, or if there is no such record date, the consummation of, such merger. consolidation. exchange of shares, recapitalization, reorganization or other similar event or sale of assets (during which time the Holder shall be entitled to convert this Note) and (b) the resulting successor or acquiring entity (if not the Company) assumes by written instrument the obligations of this Section 1.6 (b). The above provisions shall similarly apply to successive consolidations, mergers, sales, transfers or share exchanges.

(c) Adjustment Due to Distribution. If·the Company shall declare or make any distribution of its assets (or rights to acquire its assets) to holders of Common Stock as a dividend. stock repurchase. by way of return of capital or otherwise (including an)' dividend or distribution to the Company's shareholders in cash or shares (or rights to acquire shares) of capital stock of a subsidiary (i.e., a spin-off) (a "Distribution"), then the Holder of this Note shall be entitled, upon any conversion of this Note after the date of record for determining shareholders entitled 10 such Distribution, to receive the amount of such assets which would have been payable to the Holder with respect to the shares of Common Stock issuable upon such conversion had such Holder been the holder of such shares of Common Stock on the record date for the determination of shareholders entitled to such Distribution.

(d) Adjustment Due to Dilutive Issuance. If at any time when any Notes are issued and outstanding. the Borrower issues or sells, or in accordance with this Section 1.6(d) hereof is deemed to have issued or sold, any shares of Common Stock in connection with a financing transaction based on a variable price formula (the "Alternative Variable Price Formula") that is more favorable to the investor in such financing transaction than the formula for calculating the Conversion Price in effect on the date of such issuance (or deemed issuance) of such shares of Common Stock (8 "Dilutive Issuance"), then immediately upon the Dilutive Issuance, the formula for the Conversion Price will be adjusted to match the Alternative Variable Price Formula. If it is unclear whether the Alternative Variable Price Formula is better or worse then Holder in its sole discretion may elect at the time of such issuance whether to switch to the Alternative Variable Price Formula or not.

(f) Notice of Adjustments. Upon the occurrence of each adjustment or readjustment of the Conversion Price as a result of the events described in this Section 1.6, the Company, at its expense, shall promptly compute such adjustment or readjustment and prepare and furnish to the Holder of a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Company shall, upon the written request at any time of the Holder, furnish to such Holder a like certificate setting forth (i) such adjustment or readjustment. (ii) the Conversion Price at the time in effect and (iii) the number of shares of Common Stock and the amount, if any, of other securities or property which at the time would be received upon conversion of the Note.

1.8 Status as Shareholder. Upon submission of a Notice of Conversion by a Holder, (i) the shares covered thereby (other than the shares, if any. which cannot be issued because their issuance would exceed such Holder's allocated portion of the Reserved Amount or Maximum Share Amount) shall be deemed converted into shares of Common Stock and (ii) the Holder's rights as a Holder of such converted portion of this Note shall cease and terminate, excepting only the right to receive certificates for such shares of Common Stock and to any remedies provided herein or otherwise available at law or in equity to such Holder because of a failure by the Company to comply with the terms of this Note. Notwithstanding the foregoing,if a Holder has not received certificates for all shares of Common Stock prior to the tenth (tenth) business day after the expiration of the Deadline with respect to a conversion of any portion of this Note for any reason, then (unless the Holder otherwise elects to retain its status as a holder of Common Stock by so notifying the Company) the Holder shall regain the rights of a Holder of this Note with respect to such unconverted portions of this Note and the Company shall, as soon as practicable, return such unconverted Note to the Holder or, if the Note has not been surrendered, adjust its records to reflect that such portion of this Note has not been converted. In all cases, the Holder shall retain all of its rights and remedies (including, without limitation, (i) the right to receive Conversion Default Payments pursuant to Section 1.3 to the extent required thereby for such Conversion Default and any subsequent Conversion Default and (ii) the right to have the Conversion Price with respect to subsequent conversions determined in accordance with Section 1.3) for the Company's failure to convert this Note.

1.9 Omit.

ARTICLE II. CERTAIN COVENANTS

2.1 Distributions on Capital Stock, So long as the Company shall have any obligation under this Note. the Company shall not without the Holder's written consent (a) pay, declare or set apart for such payment, any dividend or other distribution (whether in cash, property or other securities) on shares of capital stock other than dividends on shares of Common Stock solely in the form of additional shares of Common Stock or (b) directly or indirectly or through any subsidiary make any other payment or distribution in respect of its capital stock except for distributions pursuant to any shareholders' rights plan which is approved by a majority of the Company's disinterested directors.

2.3 Borrowings. So long as the Issuer shall have any obligation under this Note, the Issuer shall not, without the Holder's written consent, create, .incur, assume guarantee, endorse. contingently agree to purchase or otherwise become liable upon the obligation of any person, firm, partnership, joint venture or corporation, except by the endorsement of negotiable instruments for deposit or collection. or suffer to exist any liability for borrowed money, except (a) borrowings III existence or committed on the date hereof and of which the Issuer has informed Holder in writing prior to the date hereof. (b) indebtedness to trade creditors or financia1 institutions incurred in the ordinary course of business or (c) borrowings, the proceeds of which shall be used to repay this Note.

2.5 Advances and Loans. So long as the Company shall have any obligation under this Note. the Company shall not. without the Holder's written consent, lend money. give credit or make advances to any person, firm. joint venture or corporation, including. without limitation, officers, directors, employees, subsidiaries and affiliates of the Company, except loans, credits or advances (a) in existence or committed on the date hereof and which the Company has informed Holder in writing prior to the date hereof, (b) made in the ordinary course of business or (c) not in excess 0(,$100,000.

ARTICLE III. EVENTS OF DEFAULT

If any of the following events of default (each, an "Event of Default") shall occur:

3.1 Failure to Pay Principal or Interest. The Company fails to pay the principal hereof or interest thereon when due on this Note, whether at maturity. upon aoceleration or otherwise.

3.2 Conversion and the Shares. The Company fails to issue shares of Common Stock to the Holder (or announces or threatens in writing that it will not honor its obligation to do so) upon exercise by the Holder of the conversion rights of the Holder in accordance with the terms of this Note, fails to transfer or cause its transfer agent to transfer (issue) (electronically or in certificated form) any certificate for shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note, the Company directs its transfer agent not to transfer or delays, impairs. and/or hinders its transfer agent in transferring (or issuing) (electronically or in certificated form) any certificate for shares of Common Stock to be issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note. or fails to remove (or directs its transfer agent not to remove or impairs, delays. and/or hinders its transfer agent from removing) any restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on any certificate for any shares. of Common Stock issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note (or makes any written announcement, statement or threat that it does not intend to honor the obligations described in this paragraph) and any such failure shall continue uncured (or any written announcement. statement or threat not to honor its obligations shall not be rescinded in writing) for three (3) business days after the Holder shall have delivered a Notice of Conversion. It is an obligation of the Company to remain current in its obligations to its transfer agent. It shall be an event of default of this Note, if a conversion of this Note is delayed. hindered or frustrated due to a balance owed by the Company to its transfer agent. if at the option of the Holder. the Holder advances any funds to the Company's transfer agent in order to process It conversion, such advanced funds shall be paid by the Company to the Holder within forty eight (48) hours of a demand from the Holder.

3.4 Breach of Representations and Warranties. Any representation or warranty of the Company made herein or in any agreement, statement or certificate given in writing pursuant hereto or in connection herewith (including, without limitation, the Purchase Agreement), shall be false or misleading in any material respect. when made and the breach of which has (or with the passage of time will have) a material adverse effect on the rights of the Holder with respect to this Note or the Purchase Agreement.

3.7 Bankruptcy. Bankruptcy. insolvency. reorganization or liquidation proceedings or other proceedings, voluntary or involuntary, for relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Company or any subsidiary of the Company.

3.8 Delisting of Common Stock. The Company shall fail to maintain the listing of the Common Stock on the OTC Markets or an equivalent replacement exchange. the Nasdaq National Market, the Nasdaq SmallCnp Market. the New York Stock Exchange, or the American Stock Exchange.

3.9 Failure to Comply with the Exchange Act. The Company shall fail to comply with the reporting requirements of the Exchange Act.

3.10 Liquidation. Any dissolution, liquidation, or winding up of Company or any substantial portion of its business.

3.11 Cessation of Operations. Any cessation of operations by Company or Company admits it is otherwise generally unable to pay its debts as such debts become due, provided, however. that any disclosure of the Company's ability to continue as a "going concern" shall not be an admission that the Company cannot pay its debts as they become due.

3.13 Financial Statement Restatement. The restatement of any financial statements filed by the Company with the SEC for any date or period from two years prior to the Issue Date of this Note and until this Note is no longer outstanding, if the result of such restatement would, by comparison to the original financial statement, have constituted a material adverse effect on the rights of the Holder with respect to this Note or supporting documents.

3.14 Reverse Splits. The Company effectuates a reverse split of its

Common Stock without at least twenty (20) days prior written notice to the Holder.

3.16 Cross-Default. Notwithstanding anything to the contrary contained in this Note or the other related or companion documents, a breach or default by the Company of any covenant or other term or condition contained in any of the Other Agreements. after the passage of all applicable notice and cure or grace periods, shall, at the option of the Company, be considered a default under this Note and the Other Agreements, in which event the Holder shall be entitled (but in no event required) to apply all rights and remedies of the Holder under the terms of this Note and the Other Agreements by reason of a default under said Other Agreement or hereunder. "Other Agreements" means, collectively, all agreements and instruments between, among or by: (1) the Company, and, or for the benefit of, (2) the Holder and any affiliate of the Holder, including, without limitation, promissory notes; provided, however, the term "Other Agreements" shall not include the related or companion documents to this Note. Each of the loan transactions will be cross-defaulted with each other loan transaction and with all other existing and future debt of Company to the Holder.

Upon the occurrence and during the continuation of any Event of Default specified in Section 3.1 (solely with respect to failure to pay the principal hereof or interest thereon when due at the Maturity Date), the Note shall become immediately due and payable and the Company shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to the Default Sum (as defined herein). UPON THE OCCURRENCE AND DURING THE CONTINUATION OF ANY EVENT OF DEFAULT SPECIF1ED IN SECTION 3.2, THE NOTE SHALL BECOME IMMEDIATELY DUE AND PAYABLE AND THE COMPANY SHALL PAY TO THE HOLDER, IN FULL SATISFACTION OF ITS OBLIGATIONS HEREUNDER, AN AMOUNT EQUAL TO: (Y) THE DEFAULT SUM (AS DEFJNED HEREIN); MULTIPLIED BY (Z) TWO (2). Upon the occurrence and during the continuation of any Event of Default specified in Sections 3.1 (solely with respect to failure to pay the principal hereof or interest thereon when due on this Note upon a Trading Market Prepayment Event pursuant to Section 1.7 or upon acceleration), 3.3,3.4,3.6,3.8,3.9. 3.11.3.12.3.13, 3.14, and/or 3.15 exercisable through the delivery of written notice to the Company by such Holders (the "Default Notice"), and upon the occurrence of an Event of Default specified the remaining sections of Articles III (other than failure to pay the principal hereof or interest thereon at the Maturity Date specified in Section 3.1 hereof), the Note shall become immediately due and payable and the Company shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to the: greater of (i) 150% times the sum of (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note to the date of payment (the "Mandatory Prepayment Date") plus. (y) Default Interest, if any, on the amounts referred to in clauses (w) and/or (x) plus (z) any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g} hereof (the then outstanding principal amount of this Note to the date of payment plus the amounts referred to in clauses (x), (y) and (z) shall collectively be known as the "Default Sum") or (ii) the "parity value" of the Default Sum to be prepaid. where parity value means (a) the highest number of shares of Common Stock issuable upon conversion of or otherwise pursuant to such Default Sum in accordance with Article I, treating the Trading Day immediately preceding the Mandatory Prepayment Date as the "Conversion Date" for purposes of determining the lowest applicable Conversion Price, unless the Default Event arises as a result of a breach in respect of a specific Conversion Date in which case such Conversion Date shall be the Conversion Date), multiplied by (b) the highest Closing Price for the Common Stock during the period beginning on the date of first occurrence of the Event of Default and ending one day prior to the Mandatory Prepayment Date (the "Default Amount") and all other amounts payable hereunder shall immediately become due and payable, all without demand, presentment or notice, all of which hereby are expressly waived. together with all costs. including, without limitation, legal fees and expenses, of collection, and the Holder shall be entitled to exercise all other rights and remedies available at law or in equity.

If the Company fails to pay the Default Amount within five (5) business days of written notice that such amount is due and payable, then the Holder shall have the right at any time, so long as the Company remains in default (and so long and to the extent that there are sufficient authorized shares), to require the Company. upon written notice, to immediately issue, in lieu of the Default Amount, the number of shares of Common Stock of the Company equal to the Default Amount divided by the Conversion Price then in effect.

ARTICLE IV. MISCELLANEOUS

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

If to the Company. to:

_____________

If to the Holder:

GHS Investments, LLC.

200 Stonehinge Lane

Suite 3

Carle Place, NY 11514

718.530.0182

4.3 Amendments. This Note and any provision hereof may only be amended by an instrument in writing signed by the Company and the Holder. The term "Note" and all reference thereto, as used throughout this instrument, shall mean this instrument (and the other Notes issued pursuant to the Purchase Agreement) as originally executed. or if later amended or supplemented, then as so amended or supplemented.

4.4 Assignability. This Note shall be binding upon the Company and its successors and assigns, and shall inure to be the benefit of the Holder and its successors and assigns. Notwithstanding anything in this Note to the contrary, this Note may be pledged as collateral in connection with a hrnlil fide margin account or other lending arrangement.

4.5 Cost of Collection. If default is made in the payment of this Note. The Company shall pay the Holder hereof costs of collection, including reasonable attorneys' fees.

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

4.7 Certain Amounts. Whenever pursuant to this Note the Company is required to pay an amount in excess of the outstanding principal amount (or the portion thereof required to be paid at thar time) plus accrued and unpaid interest plus Default Interest on such interest, the Company and the Holder agree that the actual damages to the Holder from the receipt of cash payment Oil this Note may be difficult to determine and the amount to be so paid by the Company represents stipulated damages and not a penalty and is intended to compensate the Holder in part for loss of the opportunity to convert this Note and to earn a return from the sale of shares of Common Stock acquired upon conversion of this Note at a price in excess of the price paid for such shares pursuant to this Note. The Company and the Holder hereby agree that such amount of stipulated damages is not plainly disproportionate to the possible loss to the Holder from the receipt of B cash payment without the opportunity to convert this Note into shares of Common Stock.

4.8 Purchase Agreement. By its acceptance of this Note, each party agrees to be bound by the applicable terms of the Securities Purchase Agreement and supporting documents of same date.

4.9 Notice of Corporate Events. Except as otherwise provided below, the Holder of this Note shall have no rights as a Holder of Common Stock unless and only to the extent that it converts this Note into Common Stock. The Company shall provide the Holder with prior notification of any meeting of the Company's shareholders (and copies of proxy materials and other information sent to shareholders). In the event of any taking by the Company of a record of its shareholders for the purpose of determining shareholders who arc entitled to receive payment of any dividend or other distribution, any right to subscribe for, purchase or otherwise acquire (including by way of merger, consolidation, reclassification or recapitalization) any share of any class or any other securities or property, or to receive any other right, or for the purpose of determining shareholders who are entitled to vote in connection with any proposed sale, lease or conveyance of all or substantially all of the assets of the Company or any proposed liquidation. dissolution or winding up of the Company, the Company shall mail a notice to the Holder, at least twenty (20) days prior to the record date specified therein (or thirty (30) days prior LO the consummation of the transaction or event. whichever is earlier), of the date on which any such record is to be taken for the purpose of such dividend, distribution, right or other event, and a brief statement regarding the amount and character of such dividend, distribution, right or other event to the extent known at such time. The Company shall make a public announcement of any event requiring notification to the Holder hereunder substantially simultaneously with the notification to the Holder in accordance with the terms of this Section 4.9.

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

IN W1TNESS WHEREOF, Company has caused this Note to be signed in its name by its duly authorized officer;

Exhibit 4.34

PRBI, LLC
c/o KCI Investments, LLC
4033 South Dean Martin Drive
Las Vegas, NV 89103
	June 29, 2015

Bridge Financing Term Sheet

Issuer	PRB I, LLC ("PRB"), a wholly owned subsidiary of KCI Investments, LLC ("KCI"), which in turn is a wholly-owned subsidiary of Dixie Foods International, Inc., a Florida C-corporation (OTCQB:"DIXI").

	PRB is temporarily in need of fund as a bridge loan to partially finance its opening of nine Papa John's franchise restaurants in Northern California (the "Restaurants"), four of which opened in later 2014, one more of which is under construction, and another four of which have signed leases and are in planning stages.

Loan Amount	$235,000

Use of Proceeds	Bridge Loan will be utilized to fund operations.

Securities Issued	Unsecured Bridge Loan in the Company (the "Bridge"). The Bridge is guaranteed by KCI and DIXI.

Interest	8% per year, payable upon Maturity Date (as defined immediately below) of the Bridge.

Repayment Terms	Prior to or on the date of August 1, 2015 (the "Maturity Date"). Repayment shall be made as a lump sum with principal and accrued interest as per Lender's instruction. Interest shall be based on 16% per year paid by the Issuer to the Lender after the Maturity Date until the loan is repaid.

Guarantors	Kenneth M. Antos and Preferred Restaurant Brands Inc.

Special Terms	All parties agreed that this loan (together with a previous loan of $100,000 funded on January 5th, 2015 as per a separate agreement and post-signed on April 22nd, 2015) is a completely separate matter from subscription agreement of PRB I EB5 program that the Lender's wife, Ms. Mingmei Yin, signed on November 5th, 2014. The repayment of this loan at maturity has no precondition such as Ms Yin's funding of EB5.

Funding Date	June 29, 2015

Agreed as of this date by:

PRBI, LLC
c/o KCI Investments, LLC
4033 South Dean Martin Drive
Las Vegas, NV 89103
	April 22, 2015

Bridge Financing Term Sheet

Borrower	PRB I, LLC ("PRB"), a wholly owned subsidiary of KCT Investments, LLC ("KCI"), which in turn is a wholly-owned subsidiary of Dixie Foods International, Inc., a Florida C-corporation (OTCQB:"DIXI").

Lender	PRB is temporarily in need of fund as a bridge loan to partially finance its opening of nine Papa John's franchise restaurants in Northern California (the "Restaurants"), four of which opened in later 2014, one more of which is under construction, and another four of which have signed leases and are in planning stages.

Loan Amount	$250,000

Use of Proceeds	Bridge Loan will be utilized to fund operations.

Securities Issued	Unsecured Bridge Loan in the Company (the "Bridge"). The Bridge is guaranteed by KCI and DIXI.

Interest	8% per year, payable upon Maturity Date (as defined immediately below) of the Bridge.

Repayment Terms	Prior to or on the date of June 30, 2015 (the "Maturity Date"). Repayment shall be made as a lump sum with principal and accrued interest as per Lender's instruction. Interest shall be based on 16% per year paid by the Issuer to the Lender after the Maturity Date until the loan is repaid.

Guarantors	Kenneth M. Antos and Preferred Restaurant Brands Inc.

Special Terms	The Borrower and Guarantors affirm that the Lender and or his family, due to the current restrictions of China's Foreign Currency Administration's regulations, is not yet obligated to invest in the Borrower's EB5 project and has none other debts to the Borrower and Guarantors. All panics agreed that this loan (together with a previous loan of $100,000 funded on January 5th, 2015 as per a separate agreement and post-signed on April 22nd, 2015) is a completely separate matter from subsription agreement of PRB I EB5 program that the Lender's wife, Ms. Mingmei Yin, signed on November 5th, 2014. The repayment of this loan at maturity date has no precondition.

Exhibit 4.35

FUTURE RECEIVABLES SALE AGREEMENT

THIS FUTURE RECEIVABLES SALE AGREEMENT ("Agreemnt") dated 07/14/2015 , is made by and between Small Business Financial Solutions, LLC a Deleware limited liability company ("Purchaser"), and Merchant (as identified below).

Merchant's Legal Name:	Capriotti's Mission Valley LLC		DBA Name:	Capriotti's Sandwich Shop Store 76
Type of entity (check one):	oCorporation	oSole Proprietorship	xLimited Liability Comany	oOther

Purchase Price	Amount Sold	Daily Percentage
The dollar amount Purchaser is paying for the Amount Sold	The dollar value of the Furure Receivables being sold	The percentage of Future Receivables Merchant agrees to remit to Purchaser each day

$74,000.00	$ 107,300.00	23.00%

THE FOLLOWING TERMS AND CONDITIONS, INCLUDING THE ARBITRATION PROVISION SET FORTH IN PARAGRAPH 14 BELOW, GOVERN THIS AGREEMENT. As explained in the Terms and Conditions, you will be in default of this Agreement if you do any of the following during the term of this Agreement (see paragraph 7 below for a list of the all of the events of default):

• Change card processors	• Add a card processor
• Sell your business prior to the Amount Sold being forwarded to Purchaser	• Sell your Future Receivables to another company

TERMS AND CONDITIONS:

1. Sale. In consideration of the payment of the Purchase Price specified above; Purchaser purchases from Merchant, and Merchant sells to Purchaser, the Daily Percentaqe of Merchant's future accounts and contract riqhts arising from or relatinq to the use by Merchant's customers. of any Payment Device (as defined herein) to purchase Merchant's products and/or services that are processed by Merchants' card processor anytime during which the Amount Sold is outstanding ("Future Receivables"), Payment Device includes credit cards, charge cards, debit cards, prepaid cards, benefit cards, or any other type of payment card as well as any virtual payment card or any electronic payment device. Merchant agrees to remit to Purchaser in accordance with the terms of this Agreement the Daily Percentage of the Future Receivables specified above until the Amount Sold has been forwarded to Purchaser. Purchaser purchases Future. Receivables free and clear of all. claims. liens or encumbrances of any kind whatsoever. Merchant agrees that this Agreement applies to Merchant's entire right,. title and interest in the Future Receivables up to the Amount Sold. The terms and conditions of this Agreement shall remain in full force and effect until the Amount Sold has been delivered to Purchaser subject to the terms of this Agreement. Merchant and Purchaser agree that this sale and purchase is final and Merchant has no right to repurchase or resell the Future Receivables or any portion thereof. Merchant, any individual signing this agreement and Purchaser (each individually referred to herein as "Party;' and collectively referred to herein as "Parties") agree that the Purchase Price paid to Merchant is the price paid to purchase Merchant's Future Receivables. and that the transaction contemplated by this Agreement is a purchase and sale of the Future Receivables. The Parties hereby agree that the transaction contemplated by this Agreement is not a loan, a forbearance of money lent or any similar loan or lending transaction. Merchant understands, agrees and represents that this transaction is made for business or commercial purposes only.

2. Timing, Method of Payment, Processing Trial. Merchant and Purchaser agree that Purchaser shall pay the Purchase Price or any portion thereof to Merchant only at a time, and through a method, acceptable to Purchaser and at Purchaser's sole discretion. Merchant and Purchaser also agree that Purchaser, in its sole discretion, may refuse to pay the. Purchase Price or any portion thereof to Merchant and cancel this Agreement at any time prior to the Purchase Price being paid. Prior to paying the Purchase Price, Purchaser may conduct a site inspection and shall conduct a processing trial (the "Processing trial") to determine whether the Daily Percentage will be correctly processed and/or reported by Merchant's card processor or bank to Purchaser. In the event Purchaser determines to conduct a Processing Trial, Merchant acknowledges and agrees that Purchaser will make its final decision, in its sole and absolute discretion, whether to purchase .the Future Receivables after completion of the Processing Trial. If Purchaser conducts a Processing Trial and determines not to purchase the Future Receivables, any receivables remitted to Purchaser during the Processing Trial shall be returned to Merchant.

Merchant lnitials

3. Waiver. There shall be effected no waiver by failure on the part of Purchaser to exercise, or delay in exercising, any right under this Agreement, nor shall: any single or partial exercise by Purchaser of any right under this Agreement preclude any other future exercise of any right. The remedies provided hereunder are cumulative and not exclusive of any remedies provided by law or equity.

4. Authorization to File Notice of Sale and Security Interest. Merchant hereby authorizes Purchaser to file a financing statement pursuant to the Uniform Commercial Code (UCC) to evidence the sale of the Future Receivables. The UCC financing statement shall state that the sale of the Future Receivables is intended to be a sale and not an assignment for security. If Merchant breaches any representation, warranty or covenant provided in paragraph 7 below, Merchant shall automatically and immediately grant Purchaser a security interest in, and authorizes Purchaser to file a UCC financing statement covering, all of Merchant's present and future accounts, chattel paper, deposit accounts, personal property, assets and fixtures, general intangibles, instruments, equipment, inventory wherever located, and proceeds now or hereafter owned or acquired by Merchant.

5. Fees and Purchaser's Risk. Purchaser does NOT CHARGE ANY ORIG.INATION OR BROKER FEES. If Merchant is charged: such a fee, it is not being charged by Purchaser or an agent of Purchaser. Additional.(y, because this is not a loan, Purchaser does not charge any interest, finance charges, paints, late fees or similar fees (except as permitted by. applicable law in connection with civil judgments). Purchaser is purchasing the Future Receivables at a discount. Because the transaction evidenced by this Agreement is not a loan, there are no scheduled payments and no repayment term. If Merchant's business slows down and Merchant's Future Receivables decrease or if Merchant closes its business or ceases to process Payment Devices and Merchant has not violated any of the representations, warranties and covenants provided in paragraph 7 below, there shall be no default or breach of this Agreement. Purchaser is purchasing the Future Receivables and Purchaser assumes the risk that Merchant's business may fail or be adversely affected by conditions outside the control of Merchant provided Merchant has not breached a representation, warranty or covenant set forth in paragraph 7 below. A returned item fee of $35.00 will be assessed if, for any reason, (a) a check, draft or similar instrument issued by the Merchant or an individua:1that signs this Agreement is not honored or cannot be processed; or (0) an electronic debit is returned unpaid or cannot be processed. Merchant and any individual that signs this Agreement authorize Purchaser to resubmit returned payments in its discretion. At Purchaser's option, Purchaser will assess this fee the first time a payment is not honored or paid, even if it is later honored or paid following resubmission. Any check, draft or similar instrument may be collected electronically if returned for insufficient or uncollected funds.

6. Right to Cancel. Merchant may cancel this transaction at any time prior to midnight of the fifth business day after Purchaser forwards the Purchase Price to Merchant. In order to cancel the transaction, Merchant must return the full Purchase Price to Purchaser within five days of receipt of the Purchase Price.

7. Merchant's Representations,Warranties and Covenants. Merchant represents, warrants and covenants that as of the date and during the term of this Agreement: (i) the Future Receivables are not subject to any claims, charges, liens, restrictions, encumbrances or security interests of any nature whatsoever; (ii) Merchant has not and will not sell the Future Receivables to another person or entity; (iii) Merchant wil·1not conduct business under any name other than as disclosed herein, shall not change its business location without the prior written consent of Purchaser; and shall not temporarily close its business for renovations or other purposes; (iv) Merchant will not change or add credit card processors without the prior written approval of Purchaser; (v) Merchant will not take any action to intentionally discourage the use of credit cards, debit cards or other payment cards; (vi) Merchant will not undertake any transaction involving the sale of Merchant, either by an issuance, sale or transfer of ownership interests in Merchant that results in a change in ownership or voting control of Merchant, or by a sale or transfer of substantially a·1o1f the assets of Merchant; (vii) Merchant wi:11not voluntarily permit another person or company, includi.ng without limitation a franchisor company (if Merchant is a franchisee), to assume or take over the operation and/or control of the Merchant's business or business locations; (viii) Merchant is not currently contemplating the filing of a bankruptcy proceeding or closing Merchant's business: (ix) all information provided by Merchant to Purchaser in this Agreement, application, interview with Purchaser or otherwise and all of Merchant's financial statements and other financial documents provided to Purchaser are true and correct and accurately reflect Merchant's financial condition and results of operations; (x) Merchant will possess and maintain insurance in such amounts and against such risks as are necessary to protect its business and shall show proof of such insurance upon demand; (xi) Merchant has all permits, licenses, approvals, consents and authorizations necessary to conduct its business and wil:1promptly pay all necessary taxes, including but not limited to employment and sales and use taxes; (xii) Merchant and the persons) signing this Agreement on behalf of Merchant have full power and authority to enter into and perform the obligations under this Agreement; (xiii) Merchant will provide Purchaser copies of all documents related to Merchant's card processing activity or financial and banking affairs within five (5) days of a request by Purchaser; (xiv) Merchant wil·1permit Purchaser to conduct a site inspection of Merchant's business, including an inspection of Merchant's credit card terminals, at any reasonable time during the term of this Agreement without notice to Merchant; (xv) Merchant will not take any action to cause the Future Receivables to be settled or delivered to any bank account other than the bank account that the Future Receivables are being settled or delivered to as of the date of this Agreement; (xvi) Merchant wil·1not enter into any financing agreement wherein and whereby the repayment terms of the agreement require Merchant to make daily or weekly payments; and (xvii) Merchant will conduct its business consistent with past practice and shall not take any action that would have an adverse effect on the use, acceptance, or authorization of any Payment Device for the purchase of Merchants products or services.

Merchant Initials

8. Daily Percentage. Purchaser agrees to accept the remittance of the Daily Percentage in one of the following ways: (i) directly from Merchant's card processor; (ii) by debiting the Merchant's bank account; or (iii) by debitinq a deposit account established by Merchant that is approved by Purchaser. Purchaser may decide in its sole discretion which of the three methods it will accept for the remittance of the Daily Percentage and will notify Merchant prior to delivering the Purchase Price to Merchant.

If Purchaser agrees to accept the remittance of the Daily Percentage directly from the Merchant's card processor, Merchant agrees to enter into an agreement with a card processor acceptable to Purchaser ("Processor") that authorizes Processor to pay the Daily Percentage directly to Purchaser rather than to Merchant until the Amount Sold has been forwarded by Processor to Purchaser. This authorization shall be irrevocable, absolute and unconditional. Merchant hereby irrevocably grants Processor the right to hold the Daily Percentage and to pay Purchaser directly (at, before or after the time Processor credits or remits to Merchant the balance of the Future Receivables not sold by Merchant to Purchaser) until the entire Amount Sold has been forwarded to Purchaser. Merchant authorizes Purchaser to act as Merchant's agent for purposes of accessing and retrieving transaction history information regarding Merchant from Processor and any additional card processors Merchant may utilize during the term of this Agreement. Merchant acknowledges and agrees that Processor may provide Purchaser with Merchant's Payment Device processing history, including without limitation Merchant's chargeback experience and any communications about Merchant received by Processor from a card processing system. Merchant acknowledges that Purchaser does not have any power or authority to control the Processor's actions with respect to the authorization, clearing, settlement and other processing of transactions and that Purchaser is not responsible for the Processor's actions. Merchant agrees to hold Purchaser harmless for the Processor's actions or omissions.

If Purchaser agrees to accept the remittance of the Daily Percentage by debiting the Merchant's bank account, Merchant irrevocably authorizes Purchaser or its designated successor or assignee to withdraw the Daily Percentage by initiating a debit via the Automatic Clearing House (ACH) system to the Merchants' bank account (as listed in Merchant's application) Of such other bank account that Merchant maintains ("Bank Account"). Merchant agrees to complete and execute a written ACH authorization (the "ACH Authorization) permitting Purchaser to debit the Bank Account pursuant to the terms of this Agreement. Any such ACH Authorization is incorporated into and made a part of this Agreement. In the event Purchaser withdraws an incorrect amount from Merchant's Bank Account, Merchant authorizes Purchaser to credit the Bank Account for the appropriate amount. Merchant and each Guarantor also authorize Purchaser to act as an agent for purposes of accessing and retrieving account activity and account balance information from any bank accounts of Merchant or Guarantor (s).

If Purchaser agrees to accept the remittance of the Daily Percentage by debiting a deposit account established by Merchant that is approved by Purchaser ("Approved Account"), Merchant agrees to complete all necessary forms to establish the Approved Account. Merchant acknowledges and agrees that any funds deposited into the Approved Account by Merchant's card processor will remain in the Approved Account until the Daily Percentage is withdrawn by Purchaser and then the remaining funds, minus any amount required to maintain the minimum balance for the Approved Account, will be forwarded to Merchant's Bank Account. If the Approved Account requires a minimum account balance, Purchaser may, in its sale discretion, fund the required minimum balance for the Approved Account out of the Purchase Price.

9. Telephone Monitoring, Recording and Contacts. Purchaser may choose to monitor and/or record telephone calls with Merchant and its owners, employees or agents. These ca·11a5re monitored: and/or recorded solely for evaluation by supervisors, training, monitoring for compliance purposes, collections. and quality control, By signing this Agreement, Merchant agrees that any call between Purchaser and Merchant or a representative of Merchant may be monitored and/or recorded for these purposes. Merchant further agrees that: (i) it has an established business relationship with Purchaser and may be contacted from time to time regarding transactions with Purchaser by telephone, text message or email; (ii) such contacts are not considered unsolicited: or inconvenient; and (iii) any such contact may be made using any wireless, mobile cellular or other number Merchant or its representative gave Purchaser, using any e-mail address Merchant or its representative gave Purchaser, or using an automated dialing and announcing or similar device, unless prohibited by law. This authorization is binding upon Merchant upon signing this Agreement and shall not be deemed withdrawn or revoked should Purchaser determine not to purchase the Future Receivables from Merchant.

10. Miscellaneous. This Agreemen.t shall be binding upon Merchant and inure to the benefit of Purchaser, its successors and assigns. This Agreement constitutes the entire Agreement between the Parties, and no representations, agreements, or understandings of any kind, either written or oral, shall be binding upon the parties unless expressly contained herein. This Agreement is a complete and exhaustive statement of the terms of the parties' agreement, which may not be explained or supplemented by evidence of consistent or inconsistent additional terms or contradicted by evidence of any prior or contemporaneous agreement. The Parties may change any of the terms of this Agreement or amend this Agreement but any such changes or amendments shall not be effective unless they are in writing, agreed to by both. Parties, and signed by Merchant and/or Guarantor(s) as applicable. If any of the provisions of this Agreement are determined to be invalid, illegal or unenforceable in any respect, the remaining provisions shall not be affected in any manner: AII Parties hereby acknowledge having the full power and authority to enter into and perform the obligations under this Agreement and that this Agreement Merchant and Guarantors) agree to execute such further and additional documents, instruments, and writings as may be necessary, proper, required, desirable, or convenient for the purpose of fully effectuating the terms and provisions of this Agreement. The information submitted by Merchant as part of its application for this transaction is hereby incorporated into and made part of Agreement. The signatures to this Agreement may be evidenced by facsimile copies or other electronic means reflecting the Party's signature hereto, and any such copy or signature shall be sufficient as if it were an original signature. In lieu of a signature, Purchaser shall be deemed to have accepted the terms of the Agreement upon payment of the purchase Price to Merchant. Paragraphs 9, 10, 11, 12, 13, 14, and 16 shall survive any termination, satisfaction, or cancellation of this Agreement.

11. Governing Law: The Parties hereby agree that this Agreernent is made, accepted and performed in Maryland, which is Purchaser's principal place of business. This Agreement, all transactions it contemplates, the entire relationship between the Parties, and all Claims (as defined in paragraph 12 below); whether such Claims are based in tort, contract or arise under statute or in equity, including all Claims involving an Affiliated Entity of Purchaser, shall be governed by and enforced in accordance with: (i)the laws of the State of Maryland without regard to principles of conflicts of laws that would require the applicatlon of any other law; and (ii) federal law for the limited purpose of the Arbitration Agreement (paraqraph 14 below). Affiliated Entity means and includes: (i) any entity, person that at has or Controlled Purchaser or any entity that at has been owned or controlled Purchaser; (ii) any predecessor or successor entities of Purchaser: (iiI) any entity or person who at any time owns or holds an equity or security interest in the Future Receivables and the interest was granted by Purchaser; and (iv) all officers, directors, owners and employees of Purchaser, its parent company or any Affiliated Entity; and (v) any parent companies of any Affiliated En:tity and their subsidiaries.

12. Disputes: Any claim, dispute or controversy between any of the Parties or between any of the Parties and an Affiliated Entity arising from or relating in any way to the relationship between the Parties, including any relationship with an Affiliated Entity, whether such claims are based in tort, contract, or arise under statute or in equity (referred to herein as this "Claim or Claims") shall be resolved only as provided in Agreement. Claim includes but is not limited to: any disputes regarding or relating to this Agreement or the application provided in connection with this transaction; any solicitation or advertising materials; any activities relating to the maintenance or servicing of the transaction; any disputes arising from any collection activity related to a breach or alleged breach of this agreement; any disputes concerning the processing or collection of Future Receivables; any disputes regarding information obtained by Purchaser from, or reported by Purchaser to, Merchant, credit bureaus or others; and disputes resulting from to relating to, in any way, any previous relationship, agreement or contract between the Parties or Merchants and an Affiliated Entity including but not limited to an agreement under which Merchant sold Future Receivables to purchaser or an affiliated Entity. ALL CLAIMS MUST BE RESOLVED BY BINDING ARBITRATION AS PROVIDED IN PARAGRAPH 14 BELOW OR IF NO PARTY ELECTS ARBITRATION, BY A COURT AS PROVIDED IN PARAGRAPH 13 BELOW. The Parties hereby agree that this provision amends and supersedes any provision in a previous agreement entered into between the Parties or between Merchant and an Affiliated Entity regardless of whether the previous agreement has been satisfied, terminated or is in default. Accordingly, any Claims between the Parties or made against or by an Affiliated Entity shall no longer be governed by the dispute resolution provisions contained in a previous agreement but shall be governed by paragraphs11 through 14 and 16 oft is Agreement; provided, however, that any changes this provision makes to previous agreements between the Parties or made against or by an Affiliated Entity shall not apply in any litigation, arbitration or other proceeding commenced before the date of this Agreement.

13. Litigation: If a Claim is filed in court, the Claim must be filed in Montgomery County, Maryland and the Parties hereby agree that the exclusive venue for all Claims filed in court shall be in Montgomery County, Maryland. No court action my be brought in any other state or jurisdiction except as necessary to enforce a valid security interest or enforce a judgment entered in Maryland. The parties hereby waive any claim against or objection to the in personam jurisdiction and venue in the counts on Montgomery County, Maryland.

If Merchant's principal place of business in located within California as of the date of this Agreement, in addition to the venue above, a Claim may also be brought in the appropriate California Court for the county where Merchant maintains its principal place of business.

NO CLAIM FILED IN COURT WILL BE HEAD BY A JURY AND ANY CLAIM WILL TAKE PLACE ON AN INDIVIDUAL BASIS; CLASS ACTIONS ARE NOT PERMITTED. NO COURT MAY ORDER, PERMIT OR CERTIFY A CLASS ACTION, REPRESENTATIVE ACTION, PRIVATE ATTORNEY-GENERAL LITIGATION OR CONSOLIDATED ACTION. NO COURT MAY ORDER OR PERMIT A JOINDER OF PARTIES, UNLESS BOTH MERCHANT AND PURCHASER CONSENT TO SUCH JOINDER IN WRITING.

14. Arbitration: Any party may elect to resolve any Claim by neutral, binding arbitration. An election to arbitrate a Claim May be made by any Party instead of filing an action in court or in response to a claim, counterclaim or cross claim filed in court by any Party. If a Party requests arbitration, all Claims (including counter claims and cross claims) any Party may have against any other Party or Affiliated Entity,whether such Claims are deemed to be compulsory or permissive in law, shall be submitted to binding arbitration pursuant to this paragraph 14 (referred to herein as the "Arbitration Agreement"). The failure to bring such a Claim is a waiver of, and bars, the bringing of such a Claim in any subsequent arbitration or court action. Any arbitration hearing that requires the attendance of the Parties shall take place in the federal judicial district where Merchant maintains its principal place of business or, if agreed to between the Parties, Maryland. The Party initiating the arbitration proceeding may select from the following arbitration administrators, which will apply the appropriate rules for commercial disputes in effect at the time the Claim is filed with the arbitration organization ("Arbitration Rules"): the American Arbitration Association ("AM"), JAMS or any other organization the Parties agree to in writing. If neither AM nor JAMS is able or willing to serve as the arbitration administrator and the Parties are unable to agree on a replacement administrator or arbitrator(s), then a court of competent jurisdiction will appoint an administrator or arbitrator(s),. For information on arbltratlon fees and costs, a copy of the Arbitration Rules, or to file a claim contact AAA at 335 Madison Avenue, Floor 10, New York, New York 10017-4605, www.adr.org (phone 1-800-778-7879) or JAMS at 620 Eighth Ave., Floor 34, New York, NY 10018, www.jamsadr.com (phone 1-800-352-5267). In the event of a conflict between the Arbitration Rules and thls Arbltration Agreement, this Arbitration Agreement shall govern. Judgment upon any arbitration award: may be entered in any court with jurisdiction and may be enforced by any court having jurisdiction over that Judgment. If a Party elects arbitration and the other Party refuses to arbitrate, the Party electing arbitration may seek a court order enforcing this Arbitration Agreement. In that event, the court shall determine any issues regarding enforceability of this Arbitration Agreement, including the validity and effect of the class action waiver (set forth below), but all other issues shall be decided by the arbitrator. All statutes of limitation that otherwise would apply to an action brought in court will apply in arbitration. NO CLAIM SUBMITTED TO ARBITRATION WILL BE HEARD BY A JURY AND ANY ARBITRATION UNDER THIS AGREEMENT WILL TAKE PLACE ON AN INDIVIDUAL BASIS; CLASS ARBITRATIONS AND CLASS ACTIONS ARE NOT PERMITTED. NO ARBITRATOR MAY ORDER, PERMIT OR CERTIFY A CLASS ACTION, REPRESENTATIVE ACTION, PRIVATE ATTORNEY-GENERAL LITIGATION OR CONSOLIDATED ARBITRATION. NO ARBITRATOR MAY ORDER OR PERMIT A JOINDER OF PARTIES, UNLESS BOTH MERCHANT AND PURCHASER CONSENT TO SUCH JOINDER IN WRITING.

The transaction(s) governed by this Agreement involves interstate commerce and the Parties agree that arbitration shall be governed by the Federal Arbitration Act (9 U.S.C. § 1 et. seq.) and the Arbitration Rules and not by any state law concerning arbitration. The arbitrator will be required to follow relevant law and applicable judicial precedent to arrive at a decision and shall be empowered to grant whatever relief would be available in court. The cost of any arbitration proceeding shall be divided as follows: (i) if a Party other than Purchaser or an Affiliated Entity initiates arbitration and the damages claimed are less than $25,000 or Purchaser or an Affiliated Entity initiate arbitration, Purchaser shall pay all arbitration fees and costs; (ll) if anyone other than Purchaser or an Affiliated Entity initiates arbitration and the damages claimed are $25,000 or more, the parties to the arbitration shall split the fees and costs for arbitration equally. Notwithstanding the foregoing, if a Party other than Purchaser believes the applicable cost of arbitration· may be too burdensome, that Party may seek a waiver of costs under the applicable Arbitration Rules. If such a request is made but denied by the arbitration organization, Purchaser will consider a written request to either advance or pay al1or part of the costs. If arbitration is elected, each Party shall be responsible for its own attorney, witness and consulting fees provided the prevailing Party may seek reimbursement of attorney fees and arbitration costs if they prevail as provided in paragraph 16 below. If any part of this Arbitration Agreement, other than waives of class action rights, is deemed or found to be unenforceable for any reason, the rest shall remain enforceable. If the waiver of class action rights is deemed or found to be unenforceable for any reason in a case in which class action allegations have been made, the remainder of this Arbitration Agreement shall be unenforceable.

If any Party does not want this Arbitration Agreement to apply, they may reject it by mailing a written rejection notice to Purchaser at 4500 East West Highway, 6th Floor, Bethesda, MD 20814, attention General Counsel. The rejection notice must state that the Party is rejecting the Arbitration Agreement and must include the Merchant's legal name, the date of this Agreement or the date the Purchase Price was delivered to Merchant by Purchaser, and the amount of the Purchase Price. A rejection notice is effective only if it is: (i:)signed by Merchant and all individuals affiliated with Merchant that sign this Agreement; and (ii) post marked 45 days or less after the date of this Agreement (the date is set forth on the first page). The rejection of this Arbitration Agreement will not affect any other provision of this Agreement. If a Party does not reject this arbitration· clause as required herein, it will be effective as of the date of this Agreement.

15. Remedies. In the event Merchant breaches any of the provisions of this Agreement, including but not limited to the representations, warranties and covenants made in paragraph 7, Purchaser shall be entitled to all remedies available under law. In any action for damages, Purchaser shall be entitled to damages equal to the Amount Sold less the amount received by Purchaser. Merchant and the individuals signing this Agreement hereby agree that Purchaser may electronically debit from any of Merchant's or the individual signatory's bank accounts via ACH or otherwise all or any portion of theAmount Sold or may instruct Merchant's processor to forward to Purchaser all or any portion of the Amount Sold outstanding if Merchant breaches this Agreement. In addition to any other remedies provided Purchaser under this Agreement, in the event that Merchant changes or permits the change of the Processor accepted by Purchaser or utilizes the services of an additlonal card processor, Purchaser shall have the right, without waiving any of its other rights or remedies and without notice to Merchant or Guarantor(s), to notify the new or additional card processor of the sale of the Amount Sold of Future Receivables hereunder and to direct such new or additional processor to make payment to Purchaser of all or any portion of the amounts received or held by such card processor for or on behalf of Merchant to pay any amounts Purchaser is entitled to receive under the terms of this Agreement. Merchant hereby g:rants to Purchaser an irrevocable power of attorney and hereby appoints Purchaser and its designees as Merchant's attorney-in-fact to take any and all actions necessary or appropriate to direct such new or additional card processor to make payment to Purchaser as contemplated by this paragraph.

16. Attorney's Fees and Costs. ln the event Merchant defaults, Purchaser shall be entitled to recover from Merchant. and Guarantors all costs of collection, including reasonable attorney's fees and third party collection costs. Any Party that files a Claim against another Party as permitted in paragraphs 11 through 14 herein and prevails on the Claim shall be entitled to collect all court or arbitration costs and reasonable attorney's fees incurred in pursuing the Claim but in no event shall attorney's fees exceed 15% of the amount of the damages awarded by the court or arbitrator regardless of the amount of attorney's fees actually incurred by the Party. If no monetary damages are awarded, no attorney's fees or costs shall be awarded. If a Party files a Claim against another Party and the Claim is dismissed or the defending Party prevails in the matter, the Party filing the Claim shall pay the defending Party's reasonable attorney's fees and costs incurred defending the matter, whether in court or arbitration.

17. Reporting: By signing this Agreement you authorize Purchaser to obtain a credit report or background report on the Merchant and any individual that signs this Agreement for purposes of deciding whether to approve the purchase of the Amount Sold or for any update, renewal, or for evaluating the qualification of Merchant for other products of Purchaser or Affiliated Entities and for any other lawful purpose. The report Purchaser obtains may include, but is not limited to, the business' or individuals' credit history or sirnilar characteristics, employment and education verifications, social security verification, criminal and civil history, Department. of Motor Vehicles records, any other public records, and any other information Purchaser deems relevant. The reports will be used by Purchaser to determine if it will proceed with the Purchase of the Future Receivables from Merchant.

18. INDIVIDUAL LIABILITY OF GUARANTOR(S) FOR BREACH OF REPRESENTATIONS, WARRANTIES AND COVENANTS. By signing this Agreement on behalf of Merchant (each such Signer a Guarantor), the Guarantors hereby assume and, jointly and severally, guarantee those obligationsof the Merchant arising under paragraphs 7, 12 through 14, and 16 of this Agreement. This guarantee is unlimited, absolute and without condition, and is binding upon each Guarantor, the Guarantor's heirs, legal representatives, successore and assigns. The Guarantors to this Agreement are hereby notified that a negative credit report reflecting on his/her credit record may be submitted to a credit reporting agency if the terms of this Agreement are breached and the resulting damages are not satisfied. Each Guarantor acknowledges receiving a copy of this Agreement and having read the terms of this Agreement, including, without limitation, the guarantee set forth in this paragraph, and the individual owner's and Guarantor's signatures below shall serve as confirmation that they understand all terms and conditions of this Agreement.

EACH PARTY ACKNOWLEDGES THAT THEY HAVE READ AND AGREE TO ALL OF THE FOREGOING TERMS AND CONDITIONS, INCLUDING THE ARBITRATION PROVISION IN PARAGRAPH 14.

. . . .

Exhibit 10.354

MUTUAL TERMINATION AGREEMENT

The MUTUAL TERMINATION AGREEMENT ("Agreement") is entered into and deemed effective as of the _____ day of ______, 2015 (the "Effective Date") by and between CAPRIOTTI'S SANDWICH SHOP, INC., a Nevada corporation, having its principal place of business at 6056 South Durango Drive, Suite 100, Las Vegas, Nevada 89113 ("Franchisor"), KCI INVESTMENTS, LLC, a Nevada limited liability company, having its principal place of business at 528 E. Eighth Street, Las Vegas, Nevada 89101 ("KCI Investments"), MISSION VALLEY, LLC, a Nevada limited liability company, having its principal place of business at 528 E. Eighth Street, Las Vegas, Nevada, 89101 ("Mission Valley"), DIXI FOODS INTERNATIONAL, LLC, a Florida corporation, having its principal place of business in Williston, Florida ("Dixi"), and KENNETH M. ANTOS, a resident of Nevada ("Guarantor"). Together, KCI Investment and Mission Valley are referred to as the "Franchisee").

RECITALS:

A. Franchisor and Franchisee currently are parties to certain Capriotti's® Sandwich Shop Franchise Agreements as more specifically described on Exhibit A (collectively, together with any addenda or amendments to each, the "Franchise Agreements") for the operations of Franchised Restaurants at the locations (if applicable) described on Exhibit A. Dixi has acquired and/or is an affiliate of both KCI Investments and Mission Valley. Guarantor has personally guaranteed Franchisee's obligations under the Franchise Agreements and is also a direct or indirect owner of each of KCI Investments, Mission Valley and Dixi.

B. Franchisee is currently in default under two of the Franchise Agreements identified in Exhibit A, Table 1 for failing to open the Franchised Restaurants in a timely manner. In addition, in 2014 Franchisee closed the Franchised Restaurant identified in Exhibit A, Table 2. The parties desire to terminate the Franchise Agreements related to the unopened Franchise Restaurants and the closed Franchised Restaurant, and all rights and obligations thereunder, except as specifically provided in this Agreement.

C. Franchisee also is currently in default under each of the Franchise Agreements identified in Exhibit A, Table 3 for, among other reasons, failing to pay when due amounts owed to Franchisor and Franchisee's suppliers and/or vendors. Although the parties acknowledge that Franchisor has the right to pursue termination of cash of such Franchise Agreements for noncompliance, the parties instead have mutually agreed that Franchisee may sell each of such Franchised Restaurants as a going concern and terminate the Franchise Agreements, provided that Franchisee pay the outstanding obligations due to Franchisor and third parties as described in Section 5(A) below, or alternatively, may enter into a mutually acceptable letter of intent with Franchisor for the Franchisor to purchase five (5) of the Franchised Restaurants as provided in Section 5(B), all on the other terms and subject to the conditions of this Agreement.

D. Franchisor and Franchisee are parties to six area development agreements as more specifically described on Exhibit B (collectively, together with any addenda or amendments to each, the "Area Development Agreements") under which Franchisee was granted the right to develop and operate under separate franchise agreements Capriotti's® Sandwich Shop restaurants. Pursuant to this Agreement, the parties have further agreed to terminate the Area Development Agreements and all rights and obligations thereunder, except as specifically provided in this Agreement.

AGREEMENTS:

For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by all parties hereby agree as follows:

1. Capitalization Terms. Any capitalized terms not otherwise define in this Agreement will have the meaning given to them in the Franchise Agreements.

2. Termination of Franchised Agreements relate to Unopened and Closed Restaurants. Subject to the provisions of this Agreement, each of the Franchise Agreement described on Exhibit A, Tables 1 and 2, and all rights and obligations thereunder, are terminated as of the Effective Date of this Agreement. Each of the Franchisee Releasing Parties (as defined below) agrees to comply with and will be liable to Franchisor for the performance of all post-termination obligations stated in such terminating Franchise Agreements, including without limitation any restrictive covenants, confidentiality, de-identification and indemnification obligations, and all obligations which by their nature are intend to survive the termination of such Franchise Agreements will survive termination. Franchisee will not be refunded any fees or deposits previously paid under either of such Franchise Agreements.

3. Termination of Area Development Agreements. Subject to the provisions of this Agreement, each of the Area Development Agreements, and all rights and obligations thereunder, are terminated as of the Effective Date of this Agreement. Franchisee, Dixi and Guarantor will remain liable to Franchisor for the performance of all post-termination obligations stated in the Area Development Agreements, including without limitation non-competition obligations (subject to the right to continue to operate the Franchised Restaurants for a limited time period as provided in Section 5 of this Agreement) and confidentiality obligations, and all other obligations which by their nature are intended to survive the termination of such Area Development Agreements will survive termination. Franchisee will not be refunded any fees or deposits previously paid under any of the Area Development Agreements.

4. Acknowledgement of Existing Monetary Obligations. Franchisee acknowledges that it currently owes Franchisor or its affiliates the aggregate amount of $15,600.47 for unpaid Royalty Fees and late fees payable under the Franchise Agreements ("Overdue Royalties") and it currently is overdue in amounts payable to Sysco for product and service purchases ("Overdue Sysco Obligations").

5. Franchisee Options Regarding Monetary Obligations. The parties agree that Franchisee may exercise either (but not both) of the following options regarding the Overdue Royalties and the Overdue Sysco Obligations:

(A) Within ten (10) business days of the Effective Date of this Agreement, Franchisee will pay Franchisor the Overdue Royalties and pay Sysco the Overdue Sysco Obligations. Franchisee will pay Franchisor by wire transfer according to the wire instructions provided to Franchisee by Franchisor. Franchisee will obtain confirmation from Sysco of its payment of any overdue amounts and provide written evidence of such payment to Franchisor within two (2) business days of payment. If Franchisee pays the Overdue Royalties and the Overdue Sysco Obligations as provided above, the Franchisee will have the limited right to sell the existing open and operating Franchised Restaurants as provided in Section 6 of this Agreement.

(B) Within ten (10) business days of the Effective Date of this Agreements, Franchisee will enter into a letter of intent ("LOI") with Franchisor or its affiliate for the Franchisor's purchase of the assets of up to five (5) of the Franchised Restaurants identified in Exhibit A, Table 3 as CA112, NV1111, CA109, CA095 and CA076. The LOI will provide that the closing of the purchase of such Franchised Restaurants will take place no later than twenty (20) days from the date of the signed LOI (Franchisor Closing date"). Franchisor will have the unrestricted right to assign its LOI rights to one or more affiliates or third parties. The LOI also will provide that Franchisor or its affiliate or assignee may pay the full amount of the purchases price on the Franchisor Closing Date or, at Franchisor's options, in twenty four (24) equal monthly installments, with interest at the rate equal to the prime lending rate as of the closing at Franchisor's primary bank. In addition, the LOI will set forth a plan for the termination of the remaining Franchise Agreements which are not contemplated to be purchased by Franchisor, which terminations will include (i) the obligation that Franchisee will close such Franchised Restaurants upon termination and de-identify them within ten (10) business days of closure and (ii) the execution of a release by Franchisee, Dixi and Guarantor similar in form to the release of Claims as provided in Section 10(A)-(E) below, with the release effective upon the termination date of each such Franchise Agreements. In connection with the transfer of the Franchised Restaurants, Franchisee must all documents of transfer reasonably necessary for the purchase of the Franchised Restaurants by Franchisor or its affiliates or assignees, which documents will include all customary representations and warranties from Franchisee as to ownership and condition of, and title to, the assets of the Franchised Restaurants being transferred. All assets must be transferred free and clear of all liens and encumbrances, with all sales and transfer taxes paid by Franchisee, and Franchisor will have no obligation to assume any contracts, leases or other liabilities of Franchisee. If the closing of the transfers described in this paragraph occurs on or before the Franchisor Closing Date accordiing to terms and conditions of this paragraph and the LOI, Franchisor will release Franchisee in full from its obligations to pay the Overdue Royalties and will waive any remedies available to Franchisor for any breaches by Francisee of the Area Development Agreements. The parties acknowledge and agree that nothing in the foregoing Section 5(B) imposes any obligation upon Franchisor to enter into an LOI with Franchisee or to purchase any Franchised Restaurants.

6. Limited Right to Sell the Existing Franchised Restaurants. If Franchisee pays the Overdue Royalties and the Overdue Sysco Obligations as provided in Section 5(A), the (and only in such case), Franchisee will be granted the limited rights, until sixty (60) days from the Effective Date of this Agreements ("Purchase Agreement Date"), to enter into one or more purchase agreements with third parties approved by Franchisor (collectively, the "Proposed Buyers"), whereby the Proposed Buyers, whether as a single transaction or pursuant to more than one transaction under separate purchase agreements, will acquire Franchisee's interest in the Franchised Restaurants related to the Franchise Agreements described in Exhibit A, Table 3. Each of such purchase agreements between Franchisee and the Proposed Buyers for the Franchised Restaurants will provide for the closing of the sale to take place on or before ninety (90) days from the Effective Date of this Agreement (as applicable to each purchase agreement, the "Closing Date"), and Franchisee will transfer all interest in and to the Franchised Restaurants being sold pursuant to such purchase agreements to the Proposed Buyers on or before such Closing Date. In connection with any such transactions, Franchisee and Guarantor must: (i) comply with all conditions of transfer and assignment as stated in the applicable provisions of the Franchise Agreements, including payment of Franchisor's then-current transfer fee and compliance with any Franchisor right of first refusal provisions regarding the transfer of the Franchised Business; (ii) pay all then-existing monetary obligations (through the Closing Date) due to Franchisor or its affiliates from either Franchisee or Guarantor under the Franchise Agreement(s) or their related agreements for the Franchised Restaurants being transferred; and (iii) pay all then-existing monetary obligations (through the Closing Date) due to Sysco or any other Franchisee's suppliers or vendors. Further, Franchisee and Guarantor will forward to Franchisor all information Franchisor requests as to the Proposed Buyers as soon as reasonably possible so that Franchisor can determine whether the Proposed Buyer satisfy Franchisor's current standards. Franchisee and Guarantor acknowledge and agree that Franchisor, upon termination of any Franchise Agreement for any reason, retains all right to purchase the related Franchised Restaurant pursuant to the terms described in the applicable Franchise Agreement, if Franchisee fails to complete a transfer and sale of all of the Franchised Restaurants by the deadlines described above and the Franchise Agreement for any of the Franchised Restaurants terminates. Franchisee and Guarantor further acknowledge and agree that if Franchisor purchases any of the Franchised Restaurants, Franchisor may offset any amounts Franchisor owes Franchisee for the Franchised Restaurants by amounts Franchisee owes Franchisor or its affiliates.

7. Continuing Obligations under the Franchise Agreements. Following the Effective Date, Franchisee and Guarantor will remain liable to Franchisor, and Franchisor will remain liable to Franchisee, for the performance of all continuing obligations under the Franchise Agreements, including the timely filing of all paperwork with Franchisor, the payment of all fees and other amounts to be owed to Franchisor or its affiliates, until Franchisee, with respect to each of the Franchise Agreements on Exhibit A., Table 3, has either transferred the Franchised Restaurants pursuant to the applicable provisions of the Franchise Agreements or the Franchise Agreements have been terminated and the Franchisee has complied with the provisions of this Agreement. If Franchisee breaches any term of this Agreement or any of the Franchise Agreements, Franchisor has the right to immediately terminate each of the Franchise Agreements as described in Section 8 below.

8. Termination of Franchise Agreements. If Franchisee fails to make payments as described in Section 5(A) or to enter into an LOI as described in Section 5(B), then all Franchise Agreements identified in Exhibit A, Table 3 will terminate immediately, with no opportunity to cure, upon Franchisee's receipt of notice of termination from Franchisor. If Franchisee makes the payments describe in Section 5(A), but fails to enter into purchase agreements with Proposed Buyers for the transfer of one or more of the existing Franchised Restaurants by the Purchase Agreement Date as described in Section 6 above, then any Franchise Agreements which are not subject to transfer under a purchase agreement by the Purchase Agreement Date will terminate immediately, with no opportunity to cure, upon Franchisee's receipt of notice of termination from Franchisor. If Franchisee makes the payments described in Section 5(A) but fails to close the transaction for the sale of each of the Franchised Restaurants covered by a purchase agreement by the Closing Date as described in Section 6 above, then the Franchise Agreements related to the unsold Franchised Restaurants will terminate immediately, with no opportunity to cure, upon Franchisee's receipt of notice of termination from Franchisor. If Franchisee enters into an LOI as described in Section 5(B) but fails to close the transaction in accordance with Section 5(B) on or before the Franchisor Closing Date, than all Franchise Agreements identified in Exhibit A, Table 3 will terminate immediately, with no opportunity to cure, upon Franchisee's receipt of notice of termination from Franchisor. If at any time there exists a breach under any Franchise Agreements or other agreements between Franchisor or its affiliates and Franchisee or Guarantor, or under this Agreement, than all Franchise Agreements not previously transferred to terminated will terminate immediately, with no opportunity to cure, upon Franchisee's receipt of notice of termination from Franchisor. Notwithstanding anything in this Section 8 to the contrary, then-existing amounts due and all other amounts owed to Franchisor or its affiliates by the Franchisee or Guarantor which have accrued after the Effective Date shall be immediately due and payable. Franchisee, Guarantor and Dixi acknowledge and agree that, to the extent any Franchise Agreement grants Franchisee any opportunity to cure certain defaults thereunder, the Franchise Agreement is modified to be consistent with the terms of this Agreement.

9. Post-Termination Obligations under the Franchise Agreements. When each Franchise Agreement is transferred or terminated, each of the Franchisee Relating Parties agrees to comply with and will be liable for compliance with all post-termination obligations stated in each of the Franchise Agreements and their related agreements, Franchisee, and Guarantor will remain liable to Franchisor for the performance of all post-termination obligations stated in such Franchise Agreements, including without limitation any restrictive covenants, confidentiality, de-indentification (if applicable due to a termination) and indemnification, and all obligations which be their nature are intended to survive the termination of such Franchise Agreements will survive termination. Franchisee will close each Franchised Restaurant upon termination and complete the de-idenfification of the related premises within ten (10) business days of termination.

10. Release of Claims.

(A) Franchisee, Dixi, Guarantor and all persons or entities acting on its or their behalf or claiming under them including each of their respective corporate parents, subsidiaries, affiliates, owners, shareholders, members, partners, heirs, executors, administrators, managers, officers, directors, governors, employees, trustees, agents, partners, business entities, attorney's insurers, successors and assign (collectively, the "Franchisee Relating Parties") jointly and severally, irrevocably and unconditionally, release, acquit and forever discharge, and covenant not to sue, Franchisor and its affiliates and each of their successors, assigns, officers, directors, shareholders, members, managers, employees and agents (collectively, the "Franchisor Parties"), of and from any claims, suits, debts, liabilities, demands, obligations, costs, expenses, actions and causes of action of every nature, whether known or unknown, vested or contingent (collectively, the "Claims"), which the Franchisee Releasing Parties may now or in the future own or hold arising prior to and including the Effective Date against any one or more of the Franchisor Parties for any matter, fact, or thing, including without limitation, any claims arising out of or relating to any of the Area Development Agreements, any of the Franchise Agreements, any other agreement with Franchisor or its affiliates, the offer or sale of any franchise, the development or operation of any Franchised Restaurant, or any relationship between the Franchisee Releasing Parties and the Franchisor Parties, from the beginning of time to the Effective Date.

(B) The Franchisee Releasing Parties are expressly waiving all rights or benefits that they have or may have under Section 1542 of the California Civil Code which section provides:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN TO HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.

(C) The Franchisee Releasing Parties specifically and expressly acknowledge and agree that the consideration accepted under this Agreement is accepted in full satisfaction of any and all injuries and/or damages or Claims that have previously arisen and which may hereafter arise respecting any of the Claims being released.

(D) The Franchisee Releasing Parties represent that they have not assigned or transferred, or purported to assign or transfer, any Claim released by them above.

(E) In entering into this Agreement, each party represents that it has had the opportunity to consult an attorney of its or his own choice, that an attorney of such party's own choice has reviewed this Agreement, that the undersigned have read the terms of the terms of the Agreement, and that the terms of this Agreement are understood and voluntarily accepted by each party.

(F) Franchisee, Dixi and Guarantor agree to execute and deliver to Franchisor a similar release of Claims as provided in Section 10(A) - (E) above, in a form satisfactory to Franchisor (i) in connection with Franchisor's grant of consent to any transfer of each of the Franchised Restaurants, with the release effective upon each applicable Closing Dates, and (ii) immediately upon termination of any of the Franchise Agreements pursuant to Section 8 of this Agreement, with the release effective upon the termination date of each Franchise Agreement.

11. Confidentiality. Each of the Franchisee Releasing Parties covenants and agrees to keep confidential any and all provisions of this Agreement. If any of the Franchisee Releasing Parties or any agent of the Franchisee Releasing Parties is subpoenaed or otherwise compelled to disclose the term of this Agreement, such party will provide advance notice of such requirement to Franchisor in writing by a form of mail or delivery which provides for a written receipt.

12. Representations Regarding Relationships. After the Effective Date, Franchisee, Dixi and Guarantor will not represent to any investor, to the public or to any other person, or in any regulatory filing or promotional communication, that any of them are in good standing with Franchisor, or have any rights to develop any Capriotti's® Sandwich Shops or otherwise have a long term, ongoing relationship with the Franchisor for the continued operation or development of Capriotti's® Sandwich Shops.

13. Miscellaneous.

(A) Guaranty. Dixi herby jointly, severally, and unconditionally guarantees the prompt payment and performance by Franchisee and Guarantor of all obligations, covenants and other Provisions under the Franchise Agreements and their related agreements, including this Agreement. By executing this Agreement, Dixi agrees that it shall be added as an additional guarantor with Guarantor under each and every Franchise Guaranty Agreement executed by Guarantor in connection with the Franchise Agreements.

(B) Binding Effect. All of the provisions of this Agreement will be binding on, and benefit, the parties and their respective legal representatives, heirs, successors and assigns.

(C) Entire Agreement. This Agreement represents the entire understanding and agreement between the parties respecting the subject matter hereof, and supersedes all other negotiations, understandings and representations made between the parties.

(D) Severability. The provisions of this Agreement are severable and the invalidity or unenforceability of a provision will not affect any other remaining provisions of the Agreement.

(E) Governing Law. Except to the extent governed by the United States Trademark Act of 1946 (Lanham Act, 15 U.S.C. §§ 10511051 et seq.), this Agreement and all transactions contemplated by this Agreement will be governed by, construed and enforced under the laws of the State of Nevada without regard to principles of conflicts of laws. Each of the parties irrevocably agrees that any action or proceeding arising out of or relating to this Agreement brought by the other party or its successors or assigns shall be brought and determined exclusively in a state or federal court located in Las Vegas, Nevada.

(F) Remedies and Attorneys' Fees. All rights and remedies of the parties under this Agreement are cumulative and will not exclude any other right or remedy allowed at law or in equity. In addition to other relief available, each party will have the right to obtain injunctive relief if any other party breaches or threatens to reach any provision of this Agreement. Franchisor will be entitled to, and the Franchisee Releasing Parties jointly and severally agree to pay, Franchisor's attorneys' fees and related costs of litigation in any proceeding initiated to enforce this Agreement.

(G) Counterparts. This Agreement may be signed in one or more counterparts, each of which will be deemed an original, but all of which together will represent one and the same instrument.

The parties have signed this Agreement, to be effective as of the Effective Date.

FRANCHISOR:	FRANCHISEE:

CAPRIOTTI'S SANDWICH SHOP, INC.	KCI INVESTMENTS, LLC

By:	By:

Its:	Its:

GUARANTOR:	MISSION VALLEY, LLC.

	By:
Kenneth M. Antos, Individually
	Its:

DIXI FOODS INTERNATIONAL, IN.

By:

-+99:

Exhibit 31

CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Kenneth Antos, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Preferred Restaurant Brands, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures, to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 19, 2015

/s/Kenneth Antos

Kenneth Antos

Chief Executive Officer and Chief Financial Officer

(Principal Executive Officer)

Exhibit 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with this Quarterly Report of Preferred Restaurant Brands, Inc. (the “Company”), on Form 10-Q for the nine months ended May 31, 2015 (the “Report”), as filed with the U.S. Securities and Exchange Commission on the date hereof, I, Kenneth Antos, Chief Executive Officer of the Company, certify to the best of my knowledge, pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley Act of 2002, that:

(1)

The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 19, 2015

/s/Kenneth Antos

Kenneth Antos

Chief Executive Officer and Chief Financial Officer

(Principal Executive Officer)