RISK FACTOR ACKNOWLEDGEMENT AGREEMENT

RISK FACTOR ACKNOWLEDGEMENT AGREEMENT Risk Factors. AN INVESTMENT IN FROG PERFORMANCE, LLC. INVOLVES HIGH RISK AND SHOULD BE CONSIDERED ONLY BY PURCHASERS WHO CAN AFFORD THE LOSS OF THE ENTIRE INVESTMENT. THE FOLLOWING RISK FACTORS SHOULD BE CONSIDERED CAREFULLY BY THE PURCHASER IN EVALUATING FROG PERFORMANCE, LLC., A WYOMING LIMITED LIABILITY COMPANY (THE COMPANY ) AND ITS BUSINESS PROSPECTS BEFORE MAKING AN INVESTMENT IN THE SECURITIES. (a) Limited Operating History. The Company is in early phase and is just beginning to implement its business plan. It is not guaranteed that the Company's vision for its products and services will be successful or, assuming the Company determines that its business model is feasible, that it will be able to implement its plan or that it will operate profitably in the future. The Company is subject to all of the risks inherent in the development of a new line of business and a new business plan. The difficulties, expenses, and challenges of carrying out a new business plan must be taken into consideration, along with the competitive environment in which the Company expects to operate. The Company s business model has not been proven, and there is no guarantee that the Company will succeed in implementing such model. The Company is dependent upon the proceeds of this offering to develop, expand, and carry out its business plan and strategy. (b) History of Operating Losses and Negative Cash Flow. The Company has a history of operating losses and negative cash flows. The Company s losses increase significantly from current levels as it incurs additional costs and expenses related to the expansion of its sales and marketing activities, the hiring of additional personnel and research and development activities. The Company s ability to achieve profitability will depend on its ability to generate and sustain substantially higher net sales, reduce cost of goods and maintain reasonable expense levels. There can be no assurance that the Company will ever achieve profitability or that it will be able to sustain or increase profitability on a quarterly or annual basis. (c) Uncertain Future Performance. The Company s operating results may fluctuate notably due to a variety of factors, many of which it does not control, including: 1) the demand for the Company s products and services; 2) the value, timing and renewal of contracts with customers and strategic partners; 3) the amount and timing of operating costs and capital expenditures and the impact of those expenditures in relation to a) the expansion of the Company s operations or b) the development of the Company s technology and software; 4) the successful execution of the Company s sales and marketing strategy; 5) the new or enhanced services or products from competition; 6) the performance of the Company s management team and key personnel; 7) changes and limitations in government regulations affecting the Company s business; and 8) the general economic conditions. These factors, together with the Company s limited operating history with respect to its current business model, make it difficult to accurately forecast the Company s future revenues, results or operations. The Company also has limited meaningful historical financial data upon which to base

planned operating expenses. A substantial portion of the Company s operating expenses is related to salaries and personnel costs, marketing programs and overhead, which cannot be adjusted quickly. The Company s current and planned operating expense levels reflect in part its expectations of future revenues. If actual revenues on a quarterly basis are below management s expectations, or if the Company s expenses increase quicker than its revenues increase the gross profit margins and results of operations would be adversely affected. (d) Competition. The market in which the Company operates is highly competitive and subject to continuing change. Some of the Company s actual and potential competitors may be able to respond more quickly than the Company to new or changing opportunities, technologies, standards or customer requirements. Additionally, because there are limited barriers to entry, the Company believes that it is possible that additional competitors will enter the marketplace with similar offerings to the Company as the size and visibility of the Company s business strategy increases. Increased competition could result in pricing pressures, reduced margins or the failure of the Company s products to achieve or maintain market acceptance. As a result of these and other factors, the Company may not be able to compete effectively with current or future competitors, which would have a material adverse effect on its business, operating results and financial condition. (e) Uncertain Development of a Product Market. If the market for the Company s products does not grow at a significant rate, the Company s business, results of operation, and financial condition may be adversely affected. The market for the Company s products is well established and rapidly evolving. As is typical for new and rapidly evolving industries, continued demand for recently introduced products and services is highly uncertain. (f) Additional Capital Requirements. If the Company is unable to raise the Maximum Offering amount, or if the Company raises the Maximum Offering Amount but the business, market and/or industry conditions change, the Company may need to raise additional capital. No assurance can be given that the Company will be able to raise any or all of the additional capital that may be required, or that such additional financing, if any, will be available on acceptable terms or at all. If such additional funds are not obtained through future offerings, the Company may be required to alter its business plan, reduce its operating costs by drastically changing its business practices or cease operations entirely. Furthermore, if the Company raises capital in the future, potential investors may require or obtain shares of the Company s capital stock on terms more favorable than those offered pursuant to this Offering. (g) Reliance on Key Personnel. The Company is dependent upon the continuing services of the founders and certain key persons. The loss of any of such key persons could have a materially adverse impact on the Company. (h) Need For Skilled Employees. The Company s future success also depends upon its continuing ability to attract and retain highly qualified personnel. Expansion of the Company s business and the management and operation of the Company will require additional managers and employees with industry relevant experience and the success of the Company will be highly dependent on the Company s ability to attract and retain skilled personnel. Competition for skilled personnel can impact the Company's ability to attract and retain such personnel due to cost. The Company s inability to attract skilled management personnel and other employees as needed could have a material adverse effect on the Company s business, results of operations and financial condition. The Company s arrangement with its current employees is at will, meaning its

employees may voluntarily terminate their employment at any time. The Company anticipates that corporate culture and performance incentive plan will be valuable in attracting and retaining qualified personnel. (i) Limited Experience Selling and Marketing Services. The Company has limited experience and resources for marketing its products and services and may not be able to successfully implement its sales and marketing initiatives. Such failure could make the Company s operating results more unpredictable. Unsuccessful sales or marketing efforts or a material lengthening of the Company s sales cycles could have material adverse effects on its business, financial condition and operating results. (j) Inability to Protect the Company s Intellectual Property; Infringement Claims. The Company s success depends to a significant degree upon the protection of brand name, reputation and intellectual property. Although the Company has taken steps to protect its proprietary technology, such steps may be inadequate. Existing trade secret, copyright and trademark laws offer only limited protection and do not account for common law claims. Moreover, the laws of other countries in which the Company may choose to market its products may afford little or no effective protection of the Company s intellectual property. The Company may file patent or trademark applications in the future as a means of protecting its technological proprietary rights. However, the Company cannot be certain that patents or trademarks will issue on any such applications. In addition, such patents or trademarks issuing from such applications may not offer adequately protection. Furthermore, the monitoring and enforcement against the unauthorized use of the Company s intellectual property rights could entail significant expenses and could prove difficult or impossible. In addition, there can be no assurance that third parties will not bring claims of copyright or trademark infringement, patent violation or misappropriation of creative ideas or formats against the Company with respect to its software and other products and services. If such claims are brought against the Company in the future, they could be time consuming to defend, result in costly litigation, divert management attention, require the Company to enter into costly royalty or licensing arrangements or prevent the Company from utilizing important technologies, ideas or formats. (k) Expanded use of of mobile devices or mobile applications can increase the Company s exposure to risk. The Company has adopted mobile devices and mobile device applications to improve the efficiency and effectiveness of its mobile workforce. The use of mobile devices introduces additional risk because data is made available outside of traditional company technology boundaries such as firewalls and intrusion prevents/detection systems and process. Unauthorized access to this data can result in the disclosure of sensitive company data. Consumer use of mobile technologies introduces additional risk due to the reduced security posture of those devices and applications because security features and controls are controlled by the device owner. The lack of strong mobile devices security controls such as encryption and or industry standard security controls can result in the disclosure of sensitive company data. (l) Any significant disruption in service of the Company s Web sites or computer systems could result in a major disruption to services, loss of data and reputation. Customers and Consumers rely on access to the Company s technology systems. The Company s reputation and ability to attract, retain and serve the Company s users is dependent upon the reliability, availability and integrity of its systems and business process. Much of the Company s software is custom developed, and the

Company will rely on the expertise of its engineering and software development teams for the continued performance of its software and computer systems. The Company s servers may be vulnerable to computer viruses, physical or electronic break-ins and similar disruptions, which could lead to corruption of data, disruption of services and inevitably loss or theft of data. Any attempts by hackers to disrupt the Company s Web site service or internal systems, if successful, could harm our business, be expensive to remedy and damage the Company s reputation. Efforts to prevent hackers from entering the Company s computer systems may not be available for hosted services and or expensive to implement. The Company s communications hardware and the computer hardware used to operate its Web site and software applications are hosted at the facilities of a third party provider. Fires, floods, earthquakes, power losses, telecommunications failures, break-ins and similar events could damage these systems and hardware or cause them to fail completely. (m) Privacy concerns could limit the Company s ability to leverage its user data for targeted marketing initiatives. In the ordinary course of business, the Company plans to collect and use data voluntarily supplied by its consumers. The Company will face certain legal obligations regarding the manner in which it treats such information. Other businesses have been criticized by privacy groups and governmental bodies for attempts to infer personal identities through the aggregation and collection of use data elements. Increased regulation of data utilization practices, including self-regulation, as well as increased regulatory oversight and enforcement of existing laws, could have an adverse effect on the Company s business. (n) The Company will rely on third parties to provide required technology. The Company plans to rely on third party companies to assist in the development and implementation of the technologies necessary to support the Company s business process. The Company cannot assure you that these third parties will successfully provide the required technology on the commercial terms or schedules assumed, or with the quality it would expect, which could have a material adverse effect on the Company s business. Some of the arrangements will be short-term. To the extent necessary production facilities and technology are not available to the Company, it may be unable to obtain the quality or implement the schedule it plans for its offerings, which would adversely affect the Company s business. (o) Lack of legitimate business financing with acceptable terms. Banks do not offer true financing for small business. Existing financing options levy the partners or individuals burrowing power and impact the partners/individual's ability to build/maintain a strong credit rating due to credit exceeding individuals incomes levels. Additionally other forms of financing such as PO (Purchase Order), Invoice financing does not exist. While institutions claim they offer such financing they require personal credit checks and guarantees as well as charge unreasonable financing terms for money borrowed. (p) Terrorist Attack or Major Economic Disruption. The company is not investing in insurance that protects against terrorist attack or major disruption as the result of such act. Even though the risk and likelihood of such attack on a particular company is low, the impact to business operations can be significant.

(q) Product Liability. The company may be subject to product liability claims if people or properties are harmed by the products sold, including due to claims, recalls or actions that could be based on allegations that, among other things, the products sold by the company are misbranded, contain contaminants or impermissible ingredients, provide inadequate instructions regarding their use or misuse, or include inadequate warnings concerning interactions with other substances. A significant product liability judgment or a widespread product recall may negatively impact on sales and profitability of the affected brand or all brands for a period of time depending on product availability, competitive reaction and consumer attitudes. (r) Regulatory Compliance. Compliance with health, food safety and environmental laws and regulations that apply to the company s operations could materially increase the company s costs. The enactment of such laws and regulations in the future is uncertain. With operations in multiple jurisdictions, including any future operations outside the U.S., the company s operations are subject to legal and regulatory risks inherent in multi-jurisdictional operations. Such legal and regulatory risks include compliance with U.S. federal and state laws affecting the company s operations inside and outside of the U.S., such as the Foreign Corrupt Practices Act, and compliance with a variety of local regulations and laws, and the interpretation of those laws. Such changes in the laws, regulations and policies, including the interpretation or enforcement thereof, that affect, or will affect, our business, including changes in healthcare, food safety, tax laws and regulations, environmental or climate change laws, regulations or accords, trade rules and customs regulations and any action the company may take as a result could adversely affect the company s financial results. The Purchaser hereby acknowledges and agrees that they have carefully considered and evaluated the above risk factors and can afford the loss of the entire investment. Purchaser: INVESTOR By: Name: