Annual Report (10-k)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

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

For the fiscal year ended December 31, 2014

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

Commission file number 000-54905

CAPSTONE FINANCIAL GROUP, INC.

(Exact name of registrant as specified in its charter)

Nevada		46-0684479
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

8600 Transit Road

East Amherst, NY 14051

(Address of principal executive offices) (Zip Code)

(866) 798-4478

(Registrant's telephone number, including area code)

Copies of Communications to:

Stradling Yocca Carlson & Rauth, P.C.

4365 Executive Drive

Suite 1500

San Diego, CA 92121

858-926-3000

Securities registered pursuant to Section 12(b) of the Act:

None

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, $0.001 par value

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

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. Yes ☒ 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). Yes ☒ No ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☒

Large accelerated filer

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Accelerated filer

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Non-accelerated filer

(Do not check if a smaller reporting company)

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Smaller reporting company

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

The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of June 30, 2014 was $64,541,448, based on the share price of $4.25.

The number of shares of Common Stock, $0.001 par value, outstanding as of April 24, 2015 was 94,564,648 shares.

No annual report to security holders, proxy or information statement, or prospectus is incorporated by reference into this Annual Report on Form 10-K.

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CAPSTONE FINANCIAL GROUP, INC.

ANNUAL REPORT FOR THE FISCAL YEAR ENDED

DECEMBER 31, 2014

Index to Report on Form 10-K

PART I		Page

Item 1.	Business	4
Item 1A.	Risk Factors	7
Item 1B.	Unresolved Staff Comments	13
Item 2.	Properties	13
Item 3.	Legal Proceedings	14
Item 4.	Mine Safety Disclosures	14

PART II

Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	14
Item 6.	Selected Financial Data	15
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	19
Item 8.	Financial Statements and Supplementary Data	19
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	19
Item 9A.	Controls and Procedures	20
Item 9B.	Other Information	21

PART III

Item 10.	Directors, Executive Officers and Corporate Governance	22
Item 11.	Executive Compensation	24
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	25
Item 13.	Certain Relationships and Related Transactions, and Director Independence	26
Item 14.	Principal Accounting Fees and Services	27

PART IV

Item 15.	Exhibits, Financial Statement Schedules	29

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FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains forward-looking statements and involves risks and uncertainties that could materially affect expected results of operations, liquidity, cash flows, and business prospects. Forward-looking statements may appear throughout this report, including without limitation, the following sections: Item 1 “Business,” Item 1A “Risk Factors,” and Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Forward-looking statements generally can be identified by words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “projects,” “will be,” “will continue,” “will likely result,” and similar expressions. These forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties, which could cause our actual results to differ materially from those reflected in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in this Annual Report on Form 10-K, and in particular, the risks discussed under the caption “Risk Factors” in Item 1A and those discussed in other documents we file with the Securities and Exchange Commission (SEC). We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

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PART I

ITEM 1. BUSINESS

Organization

We (as used herein, “we,” “our,” “Capstone” and “the Company” mean Capstone Financial Group, Inc. unless the context indicates otherwise) were incorporated in Nevada on July 10, 2012 as Creative App Solutions, Inc. On August 23, 2013, we amended our articles of incorporation and changed our name to Capstone Financial Group, Inc.

In August and September 2013, Darin Pastor and George Schneider obtained from our then controlling stockholder, for nominal consideration, 80,000,000 (post-split) shares of common stock amounting to approximately 89% of our then outstanding common stock, and they became our two senior officers. Mr. Pastor continues to own a substantial majority of our common stock, is our chief executive officer and chairman, and is the controlling person of the Company.

In September 2013, we effectuated a 20-for-1 forward split of the Company’s issued and unissued common stock. By virtue of the forward split, the number of shares issued and outstanding increased to 90,200,000, and the number of authorized common shares increased from 100,000,000 to 2,000,000,000.

General Business Development

Our current business focus is to invest in stock of other companies. We seek to discover, unlock and grow value in privately-held or illiquid companies, including through the exercise of friendly influence at a company in support of operational improvements and strategic initiatives. In some cases we might be one of the largest shareholders of the other company.

We seek to work closely and constructively with the management and boards of the other companies. While we do not manage the day-to-day operations of these companies, we seek to maintain a thorough understanding of how they operate and evaluate their performance and prospects on an ongoing basis.

We may also seek to actively trade in our strategic investment positions and/or enter into private securities transactions with regard to those positions, to capitalize on price fluctuations and realize profits or minimize losses.

We were initially formed to design and sell mobile apps for smart phones and other mobile platforms such as tablets. We never launched an active business based on this focus. (Throughout 2012, we had not commenced significant operations and, in accordance with ASC Topic 915, we were considered a development stage company. During 2013, we exited the development stage.)

During the third quarter of 2013, we refocused ourselves as a financial services company.

On January 15, 2014, in support of our financial services business focus, we effected a reverse triangular merger whereby Capstone Affluent Strategies, Inc. (“Affluent”), a California corporation, became our wholly owned subsidiary. Affluent, a financial services company, had been wholly owned by Darin Pastor.

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In March 2014, we refocused ourselves again, to our current business model.

On May 14, 2014, we effectively unwound the Affluent transaction, due to Affluent’s inability to produce audited financial statements as required and the change in our business focus. In October 2014, we acquired from Darin Pastor certain Affluent assets and assumed certain Affluent liabilities. (Affluent had been dissolved earlier in 2014.)

Currently, our primary strategic investment position is in securities of Twinlab Consolidated Holdings, Inc. (“Twinlab”). In August 2014, we purchased 10,987,500 shares of common stock of Twinlab in private transactions from 25 shareholders, for nominal consideration. Additionally, in August 2014, we purchased options to acquire 8,743,000 currently-outstanding shares of Twinlab’s common stock (collectively, the “Call Options”) from 14 shareholders in a private transaction, for nominal consideration. The Call Options exercise price is $0.0001 per share and the Call Options expire in August 2015. In February 2015, we exercised the Call Options. Optionors honored the exercise as to 7,244,500 Twinlab shares. Other optionors have not yet honored the exercise, as to at least 1,498,500 Twinlab shares.

On September 30, 2014, Twinlab issued to us a Series A Warrant to purchase up to 52,631,579 shares of Twinlab common stock at an exercise price of $0.76 per share (the “First Warrant”), and a Series B Warrant to purchase up to 22,368,421 shares of Twinlab common stock at an exercise price of $0.76 per share (the “Second Warrant”). The First Warrant and the Second Warrant are both exercisable from October 2014 through October 2017.

Twinlab and we also entered into a Common Stock Put Agreement, dated as of September 30, 2014, as amended on December 15, 2014 (the “Put Agreement”). Pursuant to the Put Agreement, if we do not exercise the First Warrant by February 16, 2015 and thereafter at a rate of no less than 1,461,988 shares of Twinlab common stock (the “Minimum Amount”) per month (the “Minimum Rate”) over the term of the First Warrant, Twinlab has the right (subject to certain conditions) to require us to exercise the First Warrant at the Minimum Rate for the duration of the First Warrant. In the event Twinlab exercises its right to require us to exercise the First Warrant, the purchase price per share of Twinlab common stock thereunder would be $0.775. We have not exercised the “Minimum Amount” of shares per the agreement but Twinlab has not yet exercised the put, and we still plan to be able to exercise the Minimum Amount. In April 2015 we have to date exercised the First Warrant as to 657,895 Twinlab shares.

In November 2014, we sold 436,681 of our Twinlab shares for approximately $1.0 million. We have continued to sell some of our Twinlab shares in 2015 (2,210,736 shares sold in March and April 2015 to date, for $1,680,159).

On October 28, 2014, we entered into a transaction in which we acquired from Darin Pastor certain assets which had been assets of Affluent and assumed certain liabilities which had been liabilities of Affluent, including liabilities under notes in favor of Darin Pastor. At December 31, 2014, the outstanding principal amount of and accrued interest on such assumed notes was $1,203,552. In addition, as part of the transaction we forgave the $1,089,617 net receivable from Darin Pastor under the crossing lines of credit entered into between Affluent and us in 2013, and the crossing lines of credit were cancelled. As a result of the October 28, 2014 transactions, we recorded an expense item of $1,089,617 and we were deemed to have paid a dividend to Darin Pastor in the amount of $1,484,204.

We continuously investigate possible acquisitions of positions in new businesses, securities and assets, and evaluate the retention and disposition of our existing holdings. Changes in the mix of our businesses and investments should be expected. We have in the past taken preliminary steps toward acquisitions and investments in various companies, which transactions were never completed, and we have made an unsuccessful investment (in Blackcraft Cult, Inc. common stock) which we continue to hold but have written down to a zero valuation.

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Current Strategic Investment: Twinlab Consolidated Holdings Inc.

Twinlab Corporation has been the trusted leader for innovative, high performance health and wellness products since 1968. In addition to the extensive line of vitamins, minerals and sports nutrition formulas of its namesake brand, Twinlab Corporation also manufactures and sells other category leaders, including the Metabolife line of diet and energy products and Alvita teas. Twinlab Corporation’s plant in American Fork, Utah, is a NSF® GMP registered facility from which it manufactures, packages and distributes over 1,000 premium quality products. Twinlab Corporation also operates a research and development facility in Grand Rapids, Michigan. Twinlab products are currently available in over 55 countries worldwide.

Twinlab Consolidated Holdings, Inc., the parent company of Twinlab Corporation, has been established to act as a consolidator in the highly fragmented nutrition segment of the health and wellness industry. Using Twinlab Corporation’s assets and the expertise and experience of its management team, Twinlab intends to capitalize on current market imbalances by combining multiple companies and operations into one larger, cohesive entity. Twinlab believes that the resulting synergies in distribution, manufacturing, advertising and global marketing would increase market share and maximize profitability, establishing Twinlab as a market leader.

Competition

A large number of entities compete with us to make the types of investments that we target as part of our business focus. We compete for such investments with a large number of venture capital funds, private equity firms, mutual funds, pension and other institutional investors, investment banks and advisory firms with managed assets. Many of our competitors are substantially larger than us and have considerably greater financial, research, technical, marketing and reputational resources than we do.

There can be no assurance that the competitive pressures we face will not have a material adverse effect on our business, financial condition, and results of operations. Also, as a result of this competition, we may not be able to take advantage of certain attractive investment opportunities, and we can offer no assurance that we will be able to identify and make investments that are consistent with our investment objective.

Personnel

As of the date of this filing, we have 5 full-time employees.

Available Information

We electronically file annual, quarterly and other reports and other information with the United States Securities and Exchange Commission (the “SEC”). You can read these SEC filings and reports over the Internet at the SEC's website at www.sec.gov or on our website at www.capstonefinancialgroupinc.com. The public may read or copy any materials we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. We will provide a copy of our annual report to security holders, including audited financial statements, at no charge upon receipt of a written request to us at Capstone Financial Group, Inc., 8600 Transit Road, East Amherst, NY 14051.

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ITEM 1A.

RISK FACTORS

This item is not applicable, as we are classified as a smaller reporting company. To better inform the readers of this Annual Report on Form 10-K, however, we provide the following limited disclosures.

In the course of conducting our business operations, we are exposed to a variety of risks that are inherent to the business and financial services industry. The following paragraphs discuss some of the key inherent risk factors that could affect our business and operations, as well as other risk factors which are particularly relevant to us. Other factors besides those discussed below or elsewhere in this report also could adversely affect our business and operations, and these risk factors should not be considered a complete list of potential risks that may affect us.

We recently changed our business focus.

Since March 2014, our business focus has been to use our own capital to acquire the outstanding stock of other companies.

During the third quarter of 2013, we had refocused ourselves as a financial services company.

We were initially formed to design and sell mobile apps for smart phones and other mobile platforms such as tablets, but we never launched an active business based on this focus.

We have a limited business history, especially in regard to our current business focus.

We may need additional capital in the future to finance our operations, which we may not be able to raise -- or it may only be available on terms unfavorable to us and or our stockholders.

We do not have substantial liquid capital resources. Additional financing might not be available on terms favorable to us, or at all. If adequate funds were not available or were not available on acceptable terms, our ability to fund our operations, take advantage of unanticipated opportunities, develop or enhance our business or otherwise respond to competitive pressures would be significantly limited.

Our management has concluded that our internal control over financial reporting is not effective. Material weaknesses in our internal control over financial reporting could cause our financial reporting to be unreliable and could lead to misinformation being disseminated to the public. We have had to restate our financial statements and amend certain of our SEC reports.

Our

management concluded that as of December 31, 2014 our internal control over financial reporting was not effective, and that material weaknesses existed in the following areas as of December 31, 2014:

(1)

we do not employ full time in-house personnel with the technical knowledge to identify and address some of the reporting issues surrounding certain complex or non-routine transactions. With respect to material, complex and non-routine transactions, management has and will continue to seek guidance from third-party experts and/or consultants to gain a thorough understanding of these transactions;

(2)

we have inadequate segregation of duties consistent with the control objectives including but not limited to the disbursement process, transaction or account changes, and the performance of account reconciliations and approval;

(3)

we have ineffective controls over the period end financial disclosure and reporting process caused by reliance on third-party experts and/or consultants and insufficient accounting staff; and

(4)

we do not have a functioning audit committee of the Board of Directors and our Board of Directors, in its performance of the functions generally associated with audit committees, lacks a majority of (indeed, lacks any) independent members and lacks a majority of (indeed, lacks any) outside directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls, approvals and procedures.

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Ineffectiveness of and material weaknesses in our internal controls could result in our financial reporting being unreliable and lead to misinformation being disseminated to the public. Investors relying upon this misinformation may make an uninformed investment decision. Errors in financial reporting might subject us to lawsuits. Moreover, if investors do not have confidence in our financial reporting, they may be relatively unwilling to buy or hold our stock, which could negatively affect our stock price and our access to capital.

Our Board of Directors concluded on November 13, 2014 that the audited consolidated financial statements and other financial information contained in our Annual Report on Form 10-K for the 2013 fiscal year failed to properly account for certain financial information and that for comparative purposes the previously issued unaudited financial statements and certain other financial information contained in certain previously-filed periodic reports should no longer be relied upon. We reported this conclusion on a Form 8-K filed with the SEC that day. Since then, we have filed amended quarterly and annual reports (Forms 10-Q/10-K) with the SEC for the fiscal quarters ended March 31, June 30 and September 30, 2014 and the fiscal year ended December 31, 2013 including (among other things) restatements of the originally-filed financial statements.

We may not be able to add and retain the key personnel we need to sustain and grow our business.

We are thinly staffed and we expect that we will need to add qualified personnel in order to expand our business. Currently we are heavily dependent on the services of Darin Pastor, our Chairman/chief executive officer. We face intense competition for qualified employees from many companies in our industry who have greater resources than we do to identify, recruit and retain valued employees.

Our performance is highly dependent upon our ability to attract, retain, and motivate highly skilled, talented employees. Given our relatively small size, the performance of our business may be especially adversely affected if we cannot do so.

If we do not (voluntarily) make sufficiently large exercises of our Twinlab warrants, Twinlab could exercise a right to require us to purchase large quantities of Twinlab common stock.

Pursuant to the Put Agreement, we indicated our intent to exercise the First Warrant at a rate of no less than 1,461,988 shares of Common Stock (“the Minimum Amount”) per month over the term of the First Warrant (the “Minimum Rate”). In the event that we do not exercise the First Warrant by February 15, 2015 or any subsequent Periodic Exercise Date (as defined in the Put Agreement) such that as of the applicable Exercise Date, our cumulative purchases of Twinlab common stock pursuant to the First Warrant has not been at a rate that is equal to or in excess of the Minimum Rate, then Twinlab has the right to notify us not earlier than 30 days and not later than 40 days after the applicable Exercise Date of Twinlab’s exercise of its put rights under the Put Agreement (the “Put Notice”). Upon receipt of the Put Notice, we would be required to exercise the First Warrant to (a) purchase the Minimum Amount by a date identified in the Put Notice that is no earlier than 10 days after and no later than 30 days after the date of the Put Notice (the “Put Date”), or if we have previously exercised the First Warrant to purchase shares in excess of the Minimum Rate, then such lesser amount of Twinlab common stock as would, if purchased as of the applicable Exercise Date, have made our purchases of Twinlab common stock pursuant to the First Warrant as of such Exercise Date equal to the Minimum Rate (the “Initial Mandatory Purchase”), and (b) purchase by a date that is no later than each subsequent Periodic Exercise Date an amount of Twinlab common stock such that as of each such Periodic Exercise Date, our cumulative purchases of Twinlab common stock pursuant to the First Warrant through that date has been at a rate that is no less than the Minimum Rate (the “Periodic Mandatory Purchases”). Following delivery of the Put Notice by Twinlab, our failure to make the Initial Mandatory Purchase by the Put Date would be an “Event of Default.” Following the delivery of the Put Notice by Twinlab, our failure to make,

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when due, any Periodic Mandatory Purchase is a breach of the Put Agreement, and if such breach is not timely cured by us, such uncured breach shall be deemed an Event of Default. Upon the occurrence of such an Event of Default, (a) our right to purchase all shares of Twinlab common stock remaining unpurchased under the First Warrant would be converted into an obligation, accelerated and immediately due and (b) the Second Warrant would immediately terminate as to any shares of Twinlab common stock remaining exercisable under the Second Warrant. In the event Twinlab invokes its right pursuant to the Put Notice to require us to exercise the First Warrant, the purchase price per share of Twinlab common stock thereunder would be $0.775. As of this filing date we have not exercised the Minimum Amount per the Put Agreement, but Twinlab has not delivered a Put Notice to us.

For Twinlab to have and exercise a right pursuant to the Put Agreement to require us to exercise the First Warrant would be materially adverse to us, especially if (as would probably be the case) we did not have funds to comply with such a mandatory purchase obligation.

Our common stock currently has low trading volume and any sale of a significant number of shares is likely to depress the trading price.

Our common stock has historically been quoted on the OTCQB marketplace operated by OTC Markets Group Inc., and we believe that after the filing of this Annual Report on Form 10-K quotation of our common stock on the OTCQB marketplace will resume. To date, the trading volume of the common stock has been limited. Because of this limited trading volume, holders of our securities may not be able to sell quickly any significant number of such shares, and any attempted sale of a large number of our shares will likely have a material adverse impact on the price of our common stock. Because of the limited number of shares being traded, the price per share is subject to volatility and may continue to be subject to rapid price swings in the future.

If the trading price of our common stock is below $5.00 per share it will be deemed a low-priced “penny” stock and an investment in our common stock should be considered high risk and subject to marketability restrictions.

If our common stock becomes/remains a penny stock, as defined in Rule 3a51-1 under the Securities Exchange Act, it will be more difficult for investors to liquidate their investment in the common stock. Until the trading price of the common stock rises above $5.00 per share, if ever, trading in the common stock is subject to the penny stock rules of the Securities Exchange Act specified in Rules 15g-1 through 15g-10. Those rules require broker-dealers, before effecting transactions in any penny stock, to:

·	Deliver to the customer, and obtain a written receipt for, a disclosure document;
·	Disclose certain price information about the stock;
·	Disclose the amount of compensation received by the broker-dealer or any associated person of the broker-dealer;
·	Send monthly statements to customers with market and price information about the penny stock; and
·	In some circumstances, approve the purchaser’s account under certain standards and deliver written statements to the customer with information specified in the rules.

Consequently, the penny stock rules may restrict the ability or willingness of broker-dealers to sell the common stock and may affect the ability of holders to sell their common stock in the secondary market and the price at which such holders can sell any such securities. These additional procedures could also limit our ability to raise additional capital in the future.

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FINRA sales practice requirements may also limit a stockholder’s ability to buy and sell our stock.

In addition to the “penny stock” rules described above, the Financial Industry Regulatory Association (FINRA) has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Before recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. The FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares.

Two individuals hold a majority of our outstanding voting securities and they can, without the votes of any other stockholders, elect all directors who in turn elect all officers.

Our Chief Executive Officer Darin Pastor and our President George Schneider collectively own 84% of our outstanding voting securities and are the only members of our Board of Directors and, accordingly, have effective control of us and may have effective control of us for the near and long term future. Votes and wishes of other stockholders can have little effect when we are managed by our Board of Directors and operated through our officers, all of whom can be elected by these two individuals.

We have the ability to issue additional shares of our common stock and shares of preferred stock without asking for stockholder approval, which could cause our stockholders’ investment to be diluted.

Our articles of incorporation authorize the Board of Directors to issue up to 2,000,000,000 shares of common stock and 10,000,000 shares of preferred stock. The power of the Board of Directors to issue shares of common stock, preferred stock or warrants or options to purchase shares of common stock or preferred stock is generally not subject to shareholder approval. Accordingly, any additional issuance of our common stock, or preferred stock that may be convertible into common stock, may have the effect of diluting one’s investment.

We do not expect to pay dividends to our stockholders in the near future.

We do not expect to declare or pay any dividends on our common stock in the foreseeable future. The declaration and payment in the future of any cash or stock dividends on the common stock will be at the discretion of our Board of Directors.

We may be subject to additional regulatory requirements.

We are not registered as an investment company under the Investment Company Act of 1940. Although our management believes we are not required to register under that Act, the consequences of being required to register and not having done so would be seriously adverse for our business. In addition, if we registered as an investment company under the Investment Company Act of 1940, we would be subject to additional regulatory requirements thereunder which would impose cost and other burdens on our business.

Our success depends, in significant part, on the results of the companies in which we invest.

Our ability to achieve our business objectives will depend on our ability to effectively manage and deploy our capital, which will depend, in turn, on our management’s ability to identify, evaluate, invest in, and monitor companies that meet our investment criteria. If a major investment has business setbacks it would adversely affect our financial results. Currently we depend heavily on Twinlab. Twinlab, for its part, is subject to very significant risks.

Many firms compete with us for investment opportunities, and they may have the ability to outcompete us.

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A large number of entities compete with us to make the types of equity investments that we target as part of our business focus. We compete for such investments with a large number of venture capital funds, private equity firms, mutual funds, pension and other institutional investors, investment banks and advisory firms with managed assets. Many of our competitors are substantially larger than us and have considerably greater financial, research, technical, marketing and reputational resources than we do. As a result of this competition, we can offer no assurance that we will be able to make investments that are consistent with our investment objective.

Our stockholders will not necessarily have the opportunity to evaluate our strategic investments or trading positions.

We have only recently begun to identify potential strategic investments and to trade positions we have acquired. Stockholders will not necessarily be able to evaluate the economic merits, transaction terms or other financial or operational data concerning our strategic investments and trading positions; often these things will not be fully available to the public. You must rely on us and our board of directors to implement our trading policies, to evaluate our investment and trading opportunities and to structure the terms of our strategic investments.

Our stockholders must depend on our Board of Directors for their decisions concerning our strategic investments.

Our Board of Directors makes all decisions regarding the acquiring, holding, and partial or complete disposition of our strategic investments. You may not agree with the decisions they reach.

Our due diligence may fail to uncover relevant details that lead to a partial or total loss of the strategic investment.

Our access to information about our current and prospective investee companies and their businesses may be limited or imperfect. Even where issuers file public reports with the SEC, such reporting cannot guarantee the identification or accuracy of relevant success factors for a company.

A significant portion of our trading positions will be recorded at fair value as determined in good faith by our board of directors (rather than at public-trading-market value) and, as a result, there may be uncertainty as to the true value of our strategic investments and trading positions.

We are required to carry our strategic investments at market value or, if there is no readily available market value, at fair value as determined by our board of directors. Typically, there is not a liquid public market for the securities of the companies in which we intend to invest. As a result, we will value these securities quarterly at fair value as determined in good faith by our board of directors.

Because such valuations are inherently uncertain, may fluctuate over short periods of time and may be based on estimates, our determinations of fair value may differ materially from the values that would have been used if a ready market for these securities existed. Due to this uncertainty, our determinations of the fair value of our trading positions on a given date may be materially understated or overstated compared to the value that we may ultimately realize upon the sale of those trading positions. Indeed, our determinations might be inaccurate even as of the determination date.

There is no guarantee that we will be able to realize the fair value as evaluated by our Board of Directors upon disposition of the asset.

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Given that a large percentage of our assets and net income are based on our fair value figures for Twinlab securities, readers should be especially aware of the risk.

Our strategic investments may be subject to practical limitations and/or legal restrictions on resale, and we may not be able to sell the positions we hold when we wish to for amounts equal to their recorded value, if at all.

Some of our strategic investments may be or become comprised of thinly traded public companies or remain private companies, resulting in their being illiquid. Also, at any given time a substantial portion of our current strategic investments and trading positions may be subject to legal restrictions on resale. We cannot assure you that we will be able to sell our positions for amounts equal to the values that we have ascribed to them or at the time we desire to sell.

Our strategic investments in private companies and/or in “thinly traded” public companies are extremely risky, and we could lose all our part of our investment.

Many uncontrollable factors within such companies and in their environments, as well as their typically limited resources, result in stability risk. When we invest in such companies, we inherently assume a high degree of risk without the ability to mitigate such risk.

Our investments are not diversified among various asset classes; to date, our strategic investments are in equities of illiquid private and thinly traded public companies.

Our entire portfolio is invested in this extremely risky asset class. Investing in any single asset class (let alone one which itself is risky) deprives us of the risk mitigation which could be provided by investing in a portfolio which is diversified among several asset classes. Some of our strategic investments may never develop a liquid public market.

A lack of diversification (even within our single asset class) increases risk of loss.

We hold strategic investments in only a few companies and therefore we cannot gain the risk mitigation benefits of portfolio diversification. We do not have the resources to materially increase the number of our strategic investments. The absence of diversification creates concentration in all risk variables associated with these positions.

Equity positions in strategic investments do not provide the degree of security associated with lending.

Equity investments, particularly in illiquid, leveraged and / or untested companies such as our current strategic investments, are very high risk. Equity investments have no contractual right of repayment, no guarantees, and no collateral. Our business model is based upon making equity investments.

We may not realize any dividend or capital gain return from our individual strategic investment or trading positions.

The companies comprising our trading positions may all fail and cause a total loss of our investment. In addition, our investee companies typically would not be expected to pay dividends to their stockholders.

We generally will not control companies comprising our strategic investments.

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We do not expect to control most of the companies that will comprise our future strategic investments, even in any cases in which we have board representation or board observation rights. As a result, we will be subject to the risk that a company in which we take a position may make business decisions with which we disagree and the management of such company may take risks or otherwise act in ways that do not serve our interests as investors. As a result, a company in which we take a position may make decisions that could decrease the value of that position. Our strategic investments may be relatively illiquid, and we may not be able to dispose of our positions as readily as we would like, at optimal times, or at an appropriate valuation.

Our lack of control over the management of a company comprising one of our strategic investments could leave us at risk that the management could make decisions or engage in activities that decrease or destroy the value of that strategic investment.

Even though we hope to work closely and constructively with management and boards of the companies that comprise our trading positions, there is no guarantee the management and boards of these companies will heed our advice or act as we would wish. Therefore, decisions or activities by the management of such a company can adversely affect the value of our strategic investment.

Our decision to file reports using the reduced disclosure requirements applicable to emerging growth companies and/or smaller reporting companies may make our common stock less attractive to investors.

We qualify as an“emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”), and we take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

Many of the exemptions available for emerging growth companies are also available to smaller reporting companies (generally, those having less than $75 million of common stock held by non-affiliates); we qualify as a “smaller reporting company.”

We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be reduced and/or be more volatile.

ITEM 1B.

UNRESOLVED STAFF COMMENTS

This item is not applicable, as we are classified as a smaller reporting company.

ITEM 2.

PROPERTIES

We are the lessee of 17,335 square feet of space in an office building at 8600 Transit Road, East Amherst, NY 14051, our headquarters office. The lease extends to October 31, 2025. Base rent is $23,113 per month through April 30, 2016 (following a free base-rent period ending October 31, 2015), with annual 3% monthly base rent increases on each April 30 from 2016 through the end of the lease term.

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ITEM 3.

LEGAL PROCEEDINGS

We are not a party to any material legal proceedings.

ITEM 4.

MINE SAFETY DISCLOSURES

Not applicable.

PART II

ITEM 5.

MARKET FOR REGISTRANT’S COMMON EQUITY RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

Our common stock has historically been quoted on the OTCQB marketplace operated by OTC Markets Group Inc., under the symbol “CAPP”. (In April 2015 we were moved to the OTC Pink marketplace, but we believe that after the filing of this Annual Report on Form 10-K quotation of our common stock on the OTCQB marketplace will resume.) The following table lists the available quotations for the high and low prices for each quarter within the fiscal years ending December 31, 2013 and December 31, 2014. During the periods reported below, our common stock has generally been traded only thinly and sporadically.

The following table sets forth the high and low prices for our common stock as reported by Yahoo Finance for the applicable quarters. These quotations reflect inter-dealer prices, without retail mark-up, markdown or commission and may not necessarily represent actual transactions.

	Period Ended December 31, 2013
	STOCK PRICES
	High		Low
1^stQuarter		Not available		Not available
2^ndQuarter		Not available		Not available
3^rdQuarter	$	1.55	$	1.00
4^thQuarter	$	7.00	$	1.60

	Period Ended December 31, 2014
	STOCK PRICES
	High		Low
1^stQuarter	$	5.25	$	1.50
2^ndQuarter	$	7.00	$	1.00
3^rdQuarter	$	4.80	$	4.00
4^thQuarter	$	5.00	$	3.50

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Holders of Common Stock

As of December 31, 2014, we had approximately 70 stockholders of record of our 94,564,648 shares of common stock outstanding.

Dividends

Any decisions regarding dividends will be made by our board of directors. We currently intend to retain and use any future earnings for the development and expansion of our business and do not anticipate paying any cash dividends in the foreseeable future. Our board of directors has complete discretion on whether to pay dividends. Even if our board of directors decides to pay dividends, the form, frequency and amount will depend upon our future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that the board of directors may deem relevant.

Recent Sales of Unregistered Securities

During the fourth quarter ended December 31, 2014, we sold 201,764 shares of common stock for a total purchase price of $171,500, all of which was paid in cash.

We believe that the issuance and sale of the above securities were exempt from the registration and prospectus delivery requirements of the Securities Act of 1933 by virtue of Section 4(a)(2) and/or Regulation D. The securities were issued directly by us and did not involve a public offering or general solicitation. There were no commissions paid on the issuance and sale of the shares.

Others sales by us of unregistered shares of our common stock in 2014 were previously reported on our Quarterly Reports on Form 10-Q (and amendments thereof).

Issuer Purchases of Equity Securities

We have never repurchased any of our equity securities. When we unwound our January 2014 acquisition of Affluent later in 2014, the 1,000 shares of common stock which we had issued for that acquisition were returned to us.

ITEM 6.

SELECTED FINANCIAL DATA

This item is not applicable, as we are classified as a smaller reporting company.

ITEM 7.

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

OVERVIEW AND OUTLOOK

Our business focus is to use our own capital to acquire the outstanding stock of other companies. We do not produce goods or services ourselves. Rather, our primary purpose is to own and trade shares of other companies. We seek to discover, unlock and grow value in privately-held or illiquid companies, including through the exercise of friendly influence at a company in support of operational improvements and strategic initiatives. In some cases, we might be one of the largest shareholders of the other company.

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We were initially formed to design and sell mobile apps for smart phones and other mobile platforms such as tablets. We never launched an active business based on this focus.

During the third quarter of 2013, we refocused ourselves as a financial services company.

In March 2014, we refocused ourselves again, to our current business model. We believe our current business model is likely to result in lower expenses levels than would have been associated with our financial services company business model.

Currently our primary strategic investment position is in securities of Twinlab. In August 2014, we purchased 10,987,500 shares of common stock of Twinlab in private transactions from 25 shareholders, for nominal consideration. Additionally, in August 2014, we purchased options to acquire 8,743,000 currently-outstanding shares of Twinlab’s common stock (collectively, the “Call Options”) from 14 shareholders in a private transaction, for nominal consideration. The Call Options exercise price is $0.0001 per share and the Call Options expire in August 2015. (In February 2015, we exercised the Call Options. Optionors honored the exercise as to 7,244,500 Twinlab shares. Other optionors have not yet honored the exercise, as to at least 1,498,500 Twinlab shares.)

On September 30, 2014, Twinlab and we also entered into the Put Agreement. Pursuant to the Put Agreement, if we do not exercise the First Warrant by February 16, 2015 and thereafter at a rate of no less than 1,461,988 shares of Twinlab common stock (the “Minimum Amount”) per month (the “Minimum Rate”) over the term of the First Warrant, Twinlab has the right (subject to certain conditions) to require us to exercise the First Warrant at the Minimum Rate for the duration of the First Warrant. In the event Twinlab exercises its right to require us to exercise the First Warrant, the purchase price per share of Twinlab common stock thereunder would be $0.775. We have not exercised the “Minimum Amount” of shares per the agreement but Twinlab has not yet exercised the put, and we still plan to be able to exercise the Minimum Amount. In April 2015 we have to date exercised the First Warrant as to 657,895 Twinlab shares.

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We currently are considering electing to become a Business Development Company and/or filing (or causing an affiliated company to file) an application with the United States Small Business Administration to become a Small Business Investment Company. We can give no assurance that such an application will be filed or that, if filed, it will be granted.

RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER, 2014 AND 2013

Revenues and Investment Gains. Total revenues (other than gain on investment securities) for the year ended December 31, 2014 were $119,923, as compared to revenues in the 2013 year of $171,188.

The 2014 year also included realized gain on investment securities of $1,019,326, mostly from a sale of Twinlab stock, and $18,855,913 of unrealized gain on Twinlab securities we hold. Our reported profitability in 2014 arose entirely from this unrealized gain, which in turn is based on our assessments/estimates of the Twinlab securities’ fair value.

Payroll. Payroll for the years ended December 31, 2014 and 2013 was $243,107 and $205,607, respectively; the increase in 2014 was primarily due to our having a full year of active operations in 2014 but only a partial year of active operations in 2013.

Professional Fees. Professional fees for the year ended December 31, 2014 and 2013 were $360,241 and $383,760. In both years, this item consisted primarily of legal fees.

General and Administrative. General and administrative expenses (excluding payroll expense and professional fees) for the years ended December 31, 2014 and 2013 were $606,740 and $302,150, respectively; the increase in 2014 was primarily due to our having a full year of active operations in 2014 but only a partial year of active operations in 2013.

Forgiveness of Debt - Related Party. On October 28, 2014, as part of a transaction between Darin Pastor, Affluent (dissolved) and us, we forgave the $1,089,617 net receivable from Darin Pastor under the crossing lines of credit entered into between Affluent and us in 2013, and the lines of credit were cancelled.

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LIQUIDITY AND CAPITAL RESOURCES

As of December 31, 2014, we had $12,685 in cash and cash equivalents, illiquid Twinlab securities owned which we recorded at a $28,838,301 value, a promissory note receivable for $603,952, credit for $86,209 of prepaid expenses, and credit for $65,000 of deposits given.

We anticipate obtaining additional financing to fund operations through common stock offerings, sales of Twinlab stock and sales of future-acquired strategic investment securities, to the extent available. There can be no assurance we will be successful in raising the necessary funds to execute our business plan. The realization of cash proceeds, if any, on sales of our securities positions would likely be “bunchy,” unpredictable and irregular. We can make no assurances and therefore we may incur operating losses and/or negative cash flows in one or more future periods.

Our current intention is to use essentially all free cash flow we generate to make further partial exercises of the First Warrant and the Second Warrant, both to help Twinlab maintain and grow its business (thereby benefiting the value of our remaining Twinlab securities) and to avoid an exercise by Twinlab of a right under the Put Agreement to obligate us to make minimum monthly exercises of the First Warrant.

The $9,973,684 warrant put option item on our balance sheet arises from the contingent possibility that such a Put Agreement obligation might arise in the future.

The $6,742,723 deferred tax liability item on our balance sheet represents the taxes we would owe if we sold all our Twinlab securities at a price resulting in realization of all of the unrealized gain we recorded for such assets on our balance sheet (based on our fair value assessment as of December 31, 2014). No such taxes would be actually payable unless and until after we sell the Twinlab securities, and the amount of actual taxes payable would depend on the actual sales prices.

From time to time after October 28, 2014 our controlling stockholder Darin Pastor has made advances and direct-payments to assist us in covering expenses; he is not obligated to make any such advances and direct-payments and there can be no assurance that any such advances and direct-payments will continue. In addition, the amounts of these advances and direct-payments are reimbursable to him upon his demand at any time. At December 31, 2014 there had been $94,306 of such advances and direct-payments.

We remind readers that our prospects must be considered in light of the risks, expenses and difficulties frequently encountered by emerging companies. Also, our limited operating history makes predictions of future operating results and cash needs difficult to ascertain.

The following table provides detailed information about our net cash flow for our 2014 and 2013 fiscal years.

	For the years ended December 31,
	2014		2013
Net cash used in operating activities	$	(464,631)	$	(1,389,140)
Net cash provided by financing activities		477,317		1,383,000
Net increase (decrease) in cash		12,685		(6,140)
Cash, beginning		-		6,140
Cash, ending	$	12,685	$	-

Operating activities

Net cash used in operating activities was $464,631 for the 2014 year compared to $1,389,140 for the 2013 year. In 2014, we implemented fair value accounting practices for our investments. More than 100% of our 2014 net income arose from unrealized gain on investment securities, which is a noncash item. This was partially offset by the noncash prospective tax liability item associated with such unrealized gain.

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Financing activities

Net cash provided by financing activities for the 2014 and 2013 years was $477,316 and $1,383,000, respectively, and was mainly attributable to capital raised through the issuance of our common stock.

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Critical Accounting Policies and Estimates

The preparation of our financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and judgments that affect our reported assets, liabilities, revenues, and expenses, and the disclosure of contingent assets and liabilities. We base our estimates and judgments on historical experience and on various other assumptions, we believe to be reasonable under the circumstances. Future events, however, may differ markedly from our current expectations and assumptions. See Note 2 – Summary of Significant Accounting Policies in our Notes to Financial Statements.

ITEM 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

This item is not applicable, as we are classified as a smaller reporting company.

ITEM 8

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See Index to Financial Statements and Financial Statement Schedules within this Form 10-K.

ITEM 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

We reiterate our prior disclosure of the resignation of Seale and Beers, CPAs on August 4, 2014 and our engagement of Squar, Milner, Peterson, Miranda & Williamson, LLP as our new independent registered public accounting firm on September 5, 2014. No additional matters are required by this item to be disclosed in this Annual Report.

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ITEM 9A

CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

As required by Rule 13a-15 under the Securities Exchange Act, as of December 31, 2014 we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, who concluded that our disclosure controls and procedures are effective. The errors which required the restatement of financial statements and the amendments of periodic reports, as reported and summarized in our Current Report on Form 8-K filed on November 13, 2014 (as amended on November 24, 2014) and in such amendments and as further stated in the following paragraph of this item, were, in their judgment, not due to ineffectiveness of our disclosure controls and procedures.

Our Board of Directors concluded in November 2014 that the previously issued audited consolidated financial statements and other financial information contained in our initially-filed Annual Report on Form 10-K for the fiscal year ended December 31, 2013 failed to properly account for certain financial information. Consequently, the Board concluded that for comparative purposes the previously issued unaudited financial statements and certain other financial information contained in the initially-filed Quarterly Reports on Form 10-Q for the fiscal periods ended June 30, 2013, September 30, 2013, March 31, 2014, and June 30, 2014, and our earnings releases and other financial communications after the filing of our initially-filed Annual Report on Form 10-K for the fiscal year ended December 31, 2013, should no longer be relied upon.

We thereafter filed corrective amendments of these periodic reports.

Internal Control Over Financial Reporting

Our management is responsible for preparing our annual consolidated financial statements and for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, a company’s principal executive and principal financial officers and effected by a company’s board of directors, management and other personnel, 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 and includes those policies and procedures that:

Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company;

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and

Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.

All internal control systems, no matter how well designed, have inherent limitations and can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the

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Company have been detected. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2014. In making our assessment, we used the framework and criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework in 2014. Based on that assessment, our management has identified certain material weaknesses in our internal control over financial reporting.

Our management concluded that as of December 31, 2014 our internal control over financial reporting was not effective, and that material weaknesses existed in the following areas as of December 31, 2014:

(1)

(2)

(3)

we have ineffective controls over the period end financial disclosure and reporting process caused by reliance on third-party experts and/or consultants and insufficient accounting staff; and

(4)

Changes in Internal Control Over Financial Reporting

No substantial changes in our internal control over financial reporting occurred during the fourth quarter of 2014 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting, except that we have increased our use of external accounting services, adopted policies to improve timely reviews by management and coordination with accounting consultants, and engaged corporate and securities legal counsel with better capabilities than our previous provider’s.

ITEM 9B

OTHER INFORMATION

In the fourth quarter of 2014, we became a party to the following material agreements which (as permitted by SEC regulations) we did not previously disclose and describe on a Current Report on Form 8-K:

Agreement, dated as of October 28, 2014, between Darin Pastor, Affluent (dissolved) and us. In this Agreement, we acquired from Darin Pastor certain assets which had been assets of Affluent and assumed certain liabilities which had been liabilities of Affluent, including liabilities under notes in favor of Darin Pastor. At December 31, 2014, the outstanding principal amount of and accrued interest on such assumed notes was $1,203,552. In addition, as part of the transaction we forgave the $1,089,617 net receivable from Darin Pastor under the crossing lines of credit entered into between Affluent and us in 2013, and the lines of credit were cancelled. As a result of the October 28, 2014 transactions, we recorded an expense item of $1,089,617 and we were deemed to have paid a dividend to Darin Pastor in the amount of $1,484,204.

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Amendment to Agreement, dated as of December 31, 2014, between Darin Pastor, Affluent (dissolved) and us. This Amendment added and corrected certain details regarding the Agreement, dated as of October 28, 2014.

Promissory Note from Thomas Tolworthy in favor of us, dated November 14, 2014. This unsecured Note was given against our $600,000 loan to Mr. Tolworthy. The Note is unsecured, bears interest at 5%, and matures on December 29, 2015.

Agreement to Reform Promissory Notes Due to Scrivener’s Error, dated December 15, 2014, between Darin Pastor, Affluent (dissolved) and us. This Agreement reformed the provisions of three promissory notes initially made by Affluent (but for which we later expressly assumed liability) in favor of Darin Pastor so that, in accordance with the original intention, they conformed with the provisions of three promissory notes Darin Pastor had made in favor of an unrelated third party to support Affluent’s business. In the Agreement, we also confirmed our binding obligation to Darin Pastor under the three notes initially made by Affluent, with the Company being substituted for Affluent as “Borrower” for all purposes of such notes.

Amendment No. 1 to Common Stock Put Agreement, dated as of December 15, 2014, between Twinlab and us. This Amendment extended to February 16, 2015 the date on which, if we had not yet exercised the Series A Warrant for the Minimum Amount, Twinlab would have the right to exercise its put under the Put Agreement.

PART III

ITEM 10.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Information is set forth below regarding our current directors and executive officers. The first two persons listed constitute our Board of Directors.

The members of our Board of Directors serve for one year terms and are elected at the next annual meeting of stockholders, or until their successors have been elected. The officers serve at the pleasure of the Board of Directors.

Darin Pastor, Age 43, CEO and Chairman - Mr. Pastor became our Chairman and Chief Executive Officer in August 2013. He was Chief Executive Officer of Capstone Affluent Strategies, Inc., a financial services firm, from September 2012 to April 2014. (Capstone Affluent Strategies, Inc. provided broker-dealer services on the LPL Financial LLC trading platform from September 2012 to July 2013.) From June 2011 to September 2012 he was a Managing Director of Prudential Insurance Company of America. From August 2010 to June 2011 he was an independent financial consultant, primarily for Colonial Life, and before that he was Senior Vice President and Senior Investment Manager at JPMorgan Chase & Co. since 2006.

Mr. Pastor has nearly two decades of experience in financial services and sales. In 2012, Prudential ranked him as the #1 Managing Director in the nation measured by year over year sales growth, and he was ranked as the top-selling Senior Investment Manager in the nation during his tenure at JPMorgan Chase & Co. At Chase, he and his team managed $6.6 billion in client assets.

Mr. Pastor’s work history also includes extensive experience as an entrepreneur. From 1989 to 1996, he was a Division Manager and owner at Pepsi-Cola Buffalo Bottling Corp. He was the owner of American Mortgage Affiliates from 1996 to 2004, opening seven retail financial center locations throughout New York before selling the company to his partner.

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Our conclusion that Mr. Pastor should be elected as a Director was based on his experience as set forth above.

George Schneider, Age 60, President, Chief Investment Officer and a Director - Mr. Schneider became our President and Chief Investment Officer, and joined our Board of Directors, in August 2013. Before that, Mr. Schneider was since 2007 a Managing Member of Cove Partners, LLC, a specialty investment banking and financial advisory firm that focuses on the alternative energy (including renewable energy) and resource recovery related industries. Before Cove Partners, Mr. Schneider was a Managing Member at Red River Capital Partners, LLC, an investment banking and financial advisory firm specializing in the alternative energy, resource recovery, technology and telecommunications industries. Before that, Mr. Schneider served as Head of Investment Banking and Special Advisor to the Board of Directors for Crown Financial Group, Inc., a publicly traded broker-dealer and market maker.

Mr. Schneider's investment banking experience includes public and private corporate debt, municipal debt and equity capital raises, merger, acquisition and divestiture transactions, structured finance transactions, valuation analyses, fairness opinions, tender and exchange offers and corporate and financial restructurings. In addition to his investment banking and sales and trading experiences, Mr. Schneider has senior investment management qualification and experience, serving as a senior portfolio manager and Director of Bond Management for Prudential Insurance Company and a portfolio manager for General Reinsurance Corporation where his work concerned a wide range of debt and equity securities. Mr. Schneider received a Bachelor of Science in Economics degree from the University of Pennsylvania's Wharton School of Business.

Our conclusion that Mr. Schneider should be elected as a Director was based on his experience as set forth above.

Halford W. Johnson, Age 51, Chief Financial Officer – Mr. Johnson became our Chief Financial Officer in September 2013. From October 2012 to April 2014, Mr. Johnson was the Chief Financial Officer of Capstone Affluent Strategies, Inc., a wealth management firm in Irvine, California. Mr. Johnson worked for JPMorgan Chase-Chase Investment Services Corp from 2000 to 2012 as an Administrative Officer. In all, Mr. Johnson has 29 years of experience in financial services, with emphasis on the areas of investment, business and estate planning, as well as compliance supervision.

Code of Ethics

In 2013, we adopted a corporate code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, and persons performing similar functions. As required by SEC regulations, this code of ethics constitutes and relates to written standards that are reasonably designed to deter wrongdoing and to promote:

(1)

Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;

(2)

Full, fair, accurate, timely and understandable disclosure in reports and documents that are filed with, or submitted to, the SEC and in other public communications made by an issuer;

(3)

Compliance with applicable governmental laws, rules and regulations;

(4)

The prompt internal reporting of violations of the code to an appropriate person or persons identified in the code; and

(5)

Accountability for adherence to the code.

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We will provide a copy of this code of ethics at no charge upon receipt of a written request to us at Capstone Financial Group, Inc., 8600 Transit Road, East Amherst, NY 14051.

Corporate Governance / Board of Directors Committees

We currently do not have standing audit, nominating and compensation committees of the Board of Directors, or any other Board of Directors committees performing similar functions. Until formal committees are established, our entire Board of Directors performs the same functions as an audit, nominating and compensation committee.

Changes in Director Nomination Procedures

There was no change in 2014 in the procedures by which stockholders might nominate or propose candidates to serve on the Board of Directors. Stockholders wishing to propose director candidates should direct the proposal to our Chairman, Darin Pastor, by letter.

Audit Committee Financial Expert

We currently do not have an audit committee of the Board of Directors. We consider that neither of the persons on our Board of Directors currently qualifies as an “audit committee financial expert,” as defined in SEC regulations. We believe it is unnecessary for our Board of Directors currently to have a member who so qualifies, in view of the facts that our current directors own a substantial majority of our outstanding stock, none of our current directors is “independent” anyway, and recruiting and compensating a director qualifying as an “audit committee financial expert” would place an undue burden on our limited resources.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires our executive officers and directors, and persons who own more than 10% of a registered class of our equity securities, to file reports of ownership and changes in ownership with the SEC. Executive officers, directors and greater than 10% stockholders are required by SEC regulation to furnish us with copies of all Section 16(a) forms they file.

Based solely on review of the copies of such forms furnished to us, or written representations from certain reporting persons, we have determined that all Section 16(a) filing requirements applicable to our officers, directors and greater than 10% beneficial owners as to our equity securities were satisfied during the fiscal year ended December 31, 2014.

ITEM 11.

EXECUTIVE COMPENSATION

Summary Compensation Table

The following table details compensation paid to our (2014) executive officers for the years ended December 31, 2013 and December 31, 2014.

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Name	Position	2013 Salary	2014 Salary
Darin R. Pastor	Chief Executive Officer, Chairman & Director	$0	$4,897
George L. Schneider	President, Chief Investment Officer & Director	$13,000	$44,575
Halford W. Johnson	Chief Financial Officer	$0	$79,966

None of our (2014) executive officers received any compensation in 2013 or 2014 other than in the form of salary (i.e., no bonuses, stock awards, option awards, nonequity incentive plan compensation, nonqualified deferred compensation earnings, or other compensation).

Mr. Pastor and Mr. Schneider became Company employees in August 2013. Mr. Johnson became a Company employee in September 2013.

Stock Options and Other Equity Compensation

We have not adopted an equity incentive plan and we have never granted any restricted stock awards, stock options, restricted stock units or other equity-based compensation to any service provider.

Overview of Compensation Program

Our Board of Directors does not currently have a compensation committee. Until a formal compensation committee is established, our entire Board of Directors has responsibility for compensation matters. As a result of the size of the Company and only having three executive officers, the Board of Directors evaluates both performance and compensation on an informal basis.

In view of our limited cash resources and the substantial equity positions held by our senior officers, the Board of Directors has maintained salaries at a quite low level for persons who are adequately incentivized by holding large positions in Company stock.

We do not currently have any equity incentive program for our personnel.

Upon hiring additional executives (whose positions in Company stock are not as large as Darin Pastor’s and George Schneider’s), the Board of Directors intends to establish a Compensation Committee to evaluate both performance and compensation to ensure that we achieve and maintain the ability to attract and retain superior employees in key positions and that compensation provided to key employees remains competitive relative to the compensation paid to similarly-situated executives of our peer companies. To that end, the Board believes executive compensation packages provided by the Company to its executives, including the named executive officers, may need to include both customary cash compensation and stock-based compensation that rewards performance as measured against established goals.

Director Compensation

Our directors also serve as executive officers of the Company, and they receive no additional compensation for their service on the Board of Directors.

ITEM 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

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The following table sets forth information, to the best of our knowledge, about the beneficial ownership of our common stock on April 24, 2015, relating to the beneficial ownership of our common stock by those persons known to beneficially own more than 5% of our capital stock and by our directors and executive officers. The percentage of beneficial ownership for the following table is based on 94,564,648 shares of common stock outstanding.

Beneficial ownership is determined in accordance with the rules of the SEC and does not necessarily indicate beneficial ownership for any other purpose. Under these rules, beneficial ownership includes those shares of common stock over which the stockholder has sole or shared voting or investment power. It also includes shares of common stock that the stockholder has a right to acquire within 60 days after April 24, 2015 pursuant to options, warrants, conversion privileges or other rights. The percentage ownership of the outstanding common stock, however, is based on the assumption, expressly required by the rules of the SEC, that only the person or entity whose ownership is being reported has exercised/converted options, warrants, etc. for/into shares of our common stock.

None of the persons in the following table beneficially owns any shares by virtue of having a right to acquire such shares within 60 days after April 24, 2015 pursuant to options, warrants, conversion privileges or other rights.

Class	Name of Beneficial Owner	Amount and Nature of Beneficial Ownership	Percent of Class
Common	Darin R. Pastor, Chief Executive Officer and Director	69,702,777	73.7%
Common	George L. Schneider, President and Director	9,036,000	9.6%
Common	Halford W. Johnson, Chief Financial Officer	119,497	*
Common	All Directors and Executive Officers as a Group	78,858,274	83.4%
(1) Each person has sole voting power and sole investment power with respect to the shares set forth next to his name in this table. Each person’s address is in care of the Company at 8600 Transit Road, East Amherst, NY 14051. Refers to beneficial ownership of less than 1%.

Changes in Control

There are no arrangements, known to us, including any pledge by any person of securities of the Company, the operation of which may at a later date result in a change in control of the Company.

ITEM 13.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Transactions with Related Persons

On July 12, 2012, we executed a promissory note in favor of Ryan Faught, who was then our chief executive officer, for $10,000. The unsecured loan bore interest at 6% per annum with principal and interest due on July 13, 2015. In 2013, Ryan Faught loaned us an additional $3,500 with the same terms as the previous promissory note for $10,000. During 2013, Ryan Faught forgave the entire balance of principal of $13,500 and accrued interest of $702.

-26-

On August 8, 2013, we entered into (as borrower) an unsecured $500,000 revolving line of credit with Capstone Affluent Strategies, Inc., which was owned and controlled by Darin Pastor. The line of credit bore interest at 2% per annum with principal and interest due on August 8, 2015.

On September 13, 2013, we entered into (as lender) an unsecured $500,000 revolving line of credit with Capstone Affluent Strategies, Inc., which was owned and controlled by Darin Pastor. In October 2013, the maximum amount available under this line of credit was increased to $2,000,000. The line of credit bore interest at 2% per annum with principal and interest due on September 13, 2015.

On October 28, 2014, we entered into a transaction in which we acquired from Darin Pastor certain assets which had been assets of Affluent and assumed certain liabilities which had been liabilities of Affluent, including liabilities under notes in favor of Darin Pastor. At December 31, 2014, the outstanding principal amount of and accrued interest on such assumed notes was $1,203,552. In addition, as part of the transaction we forgave the $1,089,617 net receivable from Darin Pastor under the lines of credit described above, and the crossing lines of credit were cancelled. As a result of the October 28, 2014 transactions, we recorded an expense item of $1,089,617 and we were deemed to have paid a dividend to Darin Pastor in the amount of $1,484,204.

From time to time after October 28, 2014, our controlling stockholder Darin Pastor has made advances and direct-payments to assist us in covering expenses; he is not obligated to make any such advances and direct-payments and there can be no assurance that any such advances and direct-payments will continue. In addition, the amounts of these advances and direct-payments are reimbursable to him upon his demand at any time. At December 31, 2014, there had been $94,306 of such advances and direct-payments.

We subleased an executive office at 2600 Michelson Drive, Suite 700, Irvine, California 92612 from Affluent and from our chief executive officer Darin Pastor, the successor of Affluent, from September 2013 through March 2015. Our occupancy right, on a prepaid basis, was one of the Affluent assets we obtained from Darin Pastor in the October 28, 2014 transaction. The value of the occupancy right was $28,736 per month.

Certain Control Persons

On September 6, 2013, Ryan Faught sold 70,964,000 (as adjusted for a later stock split) shares of the Company’s common stock to Darin Pastor, for an aggregate purchase price of $1,774.

Additionally, on September 6, 2013, Ryan Faught sold 9,036,000 (as adjusted for a later stock split) shares of the Company’s common stock to George Schneider, for an aggregate purchase price of $226.

By these transactions, Darin Pastor and George Schneider obtained 88.6% of the then outstanding shares of common stock of the Company.

Director Independence

We currently do not have any independent directors, as the term “independent” is defined in Section 803A of the NYSE Amex LLC Company Guide.

ITEM 14.

PRINCIPAL ACCOUNTING FEES AND SERVICES

AUDIT FEES

The following table sets forth the fees billed for professional services provided in connection with the audit of our annual financial statements and review of our quarterly financial statements, etc., for the years ended December 31, 2014 and December 31, 2013:

-27-

Audit Fees	Period Ended December 31,
	2014		2013
Seale and Beers, CPAs	$	10,500	$	13,000
Squar, Milner, Peterson, Miranda & Williamson, LLP		34,000		—
	$	44,500	$	13,000

AUDIT-RELATED FEES

None, for the years ended December 31, 2013 and December 31, 2014.

TAX FEES

None, for the years ended December 31, 2013 and December 31, 2014.

ALL OTHER FEES

None, for the years ended December 31, 2013 and December 31, 2014.

AUDIT COMMITTEE POLICIES AND PROCEDURES

Our Board of Directors does not have an audit committee. The entire Board of Directors fulfills the function of an audit committee. The Board of Directors does not have formal preapproval policies and procedures of the type contemplated by this item.

-28-

ITEM 15.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

The financial statements listed in the "Index to Financial Statements" on page 32 are filed as part of this report.

Financial statement schedules are omitted because they are not applicable or the required information is shown in the financial statements or notes thereto.

Exhibits included or incorporated herein: See index to Exhibits.

Exhibit Index

			Incorporated by reference
Exhibit		Filed			Filing
Number	Exhibit Description	herewith	Form	Exhibit	date
2.1	Stock Purchase Agreement dated September 6, 2013 between Ryan Faught and Darin Pastor		10-K	2.1	2/18/2015
2.2	Stock Purchase Agreement dated September 6, 2013 between Ryan Faught and George L. Schneider		10-K	2.2	2/18/2015
2.3	Agreement and Plan of Merger among the Company, Capstone Sub Co. and Capstone Affluent Strategies, Inc., dated December 13, 2013		8-K	2.1	12/13/2013
2.3.1	Articles of Merger filed January 15, 2014, between Capstone Sub Co. and Capstone Affluent Strategies, Inc.		8-K	3(i)(d)	1/16/2014
2.3.2	Rescission of Agreement and Plan of Merger among the Company, Capstone Sub Co. and Capstone Affluent Strategies, Inc.		8-K	10.1	5/1/2014
3.1	Articles of Incorporation of Creative App Solutions Inc. dated July 10, 2012		S-1	3(i)(a)	10/17/2012
3.1.1	Certificate of Amendment to Articles of Incorporation filed August 26, 2013		8-K	3(i)(a)	8/29/2013
3.1.2	Certificate of Change filed September 6, 2013		8-K	3(i)(c)	9/12/2013
3.2	Bylaws		S-1	3(ii)	10/17/2012
3.2.1	Amended Bylaws, adopted August 26, 2013		10-K	3.2.1	2/18/2015
10.1	Promissory Note from Capstone Affluent Strategies, Inc. in favor of Darin Pastor, dated October 4, 2012		10-K	10.1	2/18/2015
10.2	Promissory Note from Capstone Affluent Strategies, Inc. in favor of Darin Pastor, dated October 22, 2012		10-K	10.2	2/18/2015
10.3	Promissory Note from Capstone Affluent Strategies, Inc. in favor of Darin Pastor, dated December 31, 2012		10-K	10.3	2/18/2015
10.4	Agreements dated August 26, 2013	X
10.5	Revolving Credit Grid Note dated August 8, 2013 between the Company (as “Maker”) and Capstone Affluent Strategies, Inc.		10-Q	10.1	11/19/2013
10.6	Revolving Credit Grid Note dated September 13, 2013 between the Company and Capstone Affluent Strategies, Inc. (as “Maker”)		10-Q	10.2	11/19/2013
10.6.1	Amendment No. 1 to Revolving Credit Grid Note, dated Oct. 7, 2013		10-Q	10.3	11/19/2013
10.7	Call Options, dated August 1, 2014, from respective holders of common stock of Twinlab Consolidated Holdings, Inc. to the Company		13D	2	12/17/2014

-29-

Exhibit Index (continued)

			Incorporated by reference
Exhibit		Filed			Filing
Number	Exhibit Description	herewith	Form	Exhibit	date

10.8	Series A Warrant, dated as of September 30, 2014, issued by Twinlab Consolidated Holdings, Inc. to the Company		8-K	10.1		10/6/2014
10.9	Series B Warrant, dated as of September 30, 2014, issued by Twinlab Consolidated Holdings, Inc. to the Company		8-K	10.2		10/6/2014
10.10	Common Stock Put Agreement, dated as of September 30, 2014, between Twinlab Consolidated Holdings, Inc. and the Company		8-K	10.3		10/6/2014
10.10.1	Amendment No. 1 to Common Stock Put Agreement, dated as of December 15, 2014, between Twinlab Consolidated Holdings, Inc. and the Company		10-K	10.11.1		2/18/2015
10.11	Registration Rights Agreement, dated as of September 30, 2014, between Twinlab Consolidated Holdings, Inc. and the Company		8-K	10.	4	10/6/2014
10.12	Agreement, dated as of October 28, 2014, between Darin Pastor, Capstone Affluent Strategies, Inc. (dissolved) and the Company	X
10.12.1	Amendment to Agreement, dated as of December 31, 2014, between Darin Pastor, Capstone Affluent Strategies, Inc. (dissolved) and the Company	X
10.13	Promissory Note from Thomas Tolworthy in favor of the Company, dated November 14, 2014	X
10.14	Agreement to Reform Promissory Notes Due to Scrivener’s Error, dated December 15, 2014, between Darin Pastor, Capstone Affluent Strategies, Inc. (dissolved) and the Company		10-K	10.14		2/18/2015
10.15	Lease Agreement, dated as of April 29, 2015, between Iskalo 8600 Transit LLC and the Company	X
14.1	Code of Ethics	X
31.1	Certification pursuant to Securities Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 – CEO	X
31.2	Certification pursuant to Securities Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 – CFO	X
32.1	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 – CEO	X
32.2	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 – CFO	X

-30-

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

CAPSTONE FINANCIAL GROUP, INC.

By: /S/ Darin R. Pastor

Darin R. Pastor, Chief Executive Officer

Date: April 29, 2015

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/ Darin R. Pastor	Chairman of the Board of Directors,	April 29, 2015
Darin R. Pastor	Chief Executive Officer (Principal Executive Officer)
/s/ Halford W. Johnson	Chief Financial Officer	April 29, 2015
Halford W. Johnson	(Principal Financial Officer)
/s/ George L. Schneider	Director	April 29, 2015
George L. Schneider

-31-

CAPSTONE FINANCIAL GROUP, INC.

INDEX TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013

	PAGES
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	33

STATEMENTS OF FINANCIAL CONDITION	34

STATEMENTS OF OPERATIONS	35

STATEMENT OF STOCKHOLDERS' EQUITY	36

STATEMENTS OF CASH FLOWS	37

NOTES TO FINANCIAL STATEMENTS	38

-32-

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Capstone Financial Group, Inc.:

Report on Financial Statements

We have audited the accompanying statements of financial condition of Capstone Financial Group, Inc. as of December 31, 2014 and 2013, and the related statements of operations, stockholders’ equity and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Capstone Financial Group, Inc. as of December 31, 2014 and 2013, and the results of its operations and its cash flows for the years then ended, in accordance with accounting principles generally accepted in the United States of America.

Emphasis of Matter

As discussed in Notes 1 and 3, essentially 100% of the Company’s investments are in common stock, call options, warrants and put obligations with respect to one company, whose common stock is thinly traded. The Company’s call and put contracts require the Company to purchase at a rate of no less than 1,461,988 shares per month of Twinlab common stock through October 2017. The expected cash obligation from the options are expected to be approximately $2.9 million for the year ended December 31, 2015. At December 31, 2014, the Company has approximately $12 thousand in cash. Management plans to fund the Twinlab warrant/shares acquisition through the sales of Twinlab common stock and/or capital raises. There can be no assurances that management will be able to continue to sell its shares of Twinlab common stock for cash or that the Company will be able to successfully raise sufficient capital to fund the required warrant exercises. Also as discussed in Note 3, 100% of the Company’s investments (including common stock and call option assets and put option liabilities) are classified as Level 3 Fair Value Measurements at December 31, 2014 which have been valued by the Company’s Board of Directors. We have reviewed the procedures applied by the Company in valuing such investment securities and inspected underlying documentation; while in the circumstances, the procedures appear to be reasonable and the documentation appropriate, determination of fair values involves subjective judgment and ultimate amounts realized may significantly vary from values presently estimated. Our opinion is not modified with respect to these matters.

SQUAR, MILNER, PETERSON, MIRANDA & WILLIAMSON, LLP

San Diego, California

April 29, 2015

-33-

CAPSTONE FINANCIAL GROUP, INC.

(FORMERLY CREATIVE APP SOLUTIONS, INC.)

STATEMENTS OF FINANCIAL CONDITION

	December 31, 2014		December 31, 2013
ASSETS
Financial instruments, at fair value	$	28,838,301	$	—
Cash		12,685		—
Note receivable		603,952		—
Line of credit receivable, net - related party		—		580,043
Accrued interest receivable - related party		—		6,542
Prepaid expense		86,209		16,895
Furniture and equipment, net		6,500		—
Deposits		65,000		100,000
Total assets	$	29,612,647	$	703,480

LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES
Accounts payable	$	—	$	12,973
Accrued taxes payable		1,600		800
Accrued expenses		45,524		—
Accrued payroll liabilities		1,423		11,960
Accrued interest payable - related party		4,431		4,519
Short term advances payable - related party		94,306		—
Note payable - related party		1,203,552		—
Deferred revenue		116,662		—
Warrant put option		9,973,684		—
Deferred tax liability		6,742,723		—
Total liabilities		18,183,905		30,252

STOCKHOLDERS' EQUITY
Preferred stock, $0.001 par value, 10,000,000 shares
authorized, no shares issued and outstanding		—		—
Common stock, $0.001 par value, 2,000,000,000 shares
authorized; 94,564,648 and 93,025,000 issued and outstanding
as of December 31, 2014 and 2013, respectively		94,565		93,025
Additional paid-in capital		1,176,633		1,353,677
Retained earnings (deficit)		10,157,544		(773,474	)
Total stockholders' equity		11,428,742		673,228
Total liabilities and stockholders' equity	$	29,612,647	$	703,480

See Accompanying Notes to Financial Statements.

-34-

CAPSTONE FINANCIAL GROUP, INC.

(FORMERLY CREATIVE APP SOLUTIONS, INC.)

STATEMENTS OF OPERATIONS

	For the year ended
	December 31,
	2014		2013
Revenues
Services income	$	83,338	$	171,188
Interest - related party		36,585		—
		119,923		171,188
Expenses
Payroll		243,107		205,607
Professional fees		360,241		383,760
General and administrative		606,740		302,150
Forgiveness of debt - related party		1,089,617		—
Interest expense		—		2,963
Interest expense - related party		20,916		4,938
		2,320,621		899,418

Realized and Unrealized Gain on Investments
Realized gain on investment securities, net		1,019,326		—
Unrealized gain on investment securities, net		18,855,913		—
Gain on investments, net		19,875,239		—

Net income (loss) before taxes		17,674,541		(728,230	)
Provision for income taxes		6,743,523		800
Net income (loss)	$	10,931,018	$	(729,030	)
Net income (loss) per share - basic and diluted	$	0.12	$	(0.01	)
Weighted average shares outstanding -
basic and diluted		93,890,264		83,387,110

See Accompanying Notes to Financial Statements.

-35-

CAPSTONE FINANCIAL GROUP, INC.

(FORMERLY CREATIVE APP SOLUTIONS, INC.)

STATEMENTS OF STOCKHOLDERS’ EQUITY

							Additional			Retained			Total
	Common Shares						Paid-In			Earnings			Stockholders’
	Shares			Amount			Capital			(Deficit)			Equity
Balance, December 31, 2012		80,200,000		$	80,200		$	(75,700	)	$	(44,444	)	$	(39,944	)

February 25, 2013 Issuance of common stock for cash		10,000,000			10,000			40,000			—			50,000

April 16, 2013 Issuance of common stock for services		1,000,000			1,000			4,000			—			5,000

June 6, 2013 Cancellation of common stock for services		(1,000,000	)		(1,000	)		(4,000	)		—			(5,000	)

September 30, 2013 Issuance of common stock for cash		1,470,000			1,470			306,732			—			308,202

December 31, 2013 Issuance of common stock for cash		1,355,000			1,355			1,082,645			—			1,084,000

Net loss		—			—			—			(729,030	)		(729,030	)

Balance, December 31, 2013		93,025,000			93,025			1,353,677			(773,474	)		673,228

February 25, 2014 Issuance of common stock for cash		488,237			488			414,512			—			415,000

May 8, 2014 Issuance of common stock for cash		412,000			412			349,788			—			350,200

August 29, 2014 Issuance of common stock for cash		437,647			438			371,562			—			372,000

Fourth quarter 2014 Issuance of common stock for cash		201,764			202			171,298			—			171,500

October 28, 2014 Deemed dividend		—			—			(1,484,204	)		—			(1,484,204	)

Net income		—			—			—			10,931,018			10,931,018

Balance, December 31, 2014		94,564,648		$	94,565		$	1,176,633		$	10,157,544		$	11,428,742

See Accompanying Notes to Financial Statements.

-36-

CAPSTONE FINANCIAL GROUP, INC.

(FORMERLY CREATIVE APP SOLUTIONS, INC.)

STATEMENTS OF CASH FLOWS

	For the year ended
	December 31,
	2014			2013
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$	10,931,018		$	(729,030	)
Adjustments to reconcile net income (loss) to net
cash used in operating activities:
Purchases of investments		(8,704	)		—
Net change in unrealized (gain) on investment securities, net		(18,855,913	)		—
Forgiveness of debt - related party		1,089,617			14,202
Depreciation		333			—
(Increase) decrease in assets:
Note receivable		(603,952	)		—
Receivable line of credit, net - related party		—			(580,043	)
Accrued interest receivable - related party		(32,633	)		(6,542	)
Prepaid expense		76,282			(16,895	)
Deposits		35,000			(100,000	)
Increase (decrease) in liabilities:
Accounts payable		(12,973	)		12,673
Accrued taxes payable		800			800
Accrued expenses		45,524			—
Accrued payroll liabilities		(10,537	)		11,960
Accrued interest payable - related party		22,122			4,236
Payables interest		—			(501	)
Deferred revenue		116,662			—
Deferred tax liability		6,742,723			—
Net cash used in operating activities		(464,631	)		(1,389,140	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sale of common stock, net of offering costs		1,308,700			1,428,000
Net proceeds of line of credit - related party		(925,690	)		(45,000	)
Short term advances payable - related party		94,306			—
Net cash provided by financing activities		477,316			1,383,000
Increase (decrease) in cash		12,685			(6,140	)
Cash at beginning of period		—			6,140
Cash at end of period	$	12,685		$	—

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Assets acquired in acquisition	$	(152,429	)	$	—
Liabilities assumed in acquisition	$	1,636,633		$	—
Deemed dividend	$	(1,484,204	)	$	—

See Accompanying Notes to Financial Statements.

-37-

CAPSTONE FINANCIAL GROUP, INC.

NOTES TO FINANCIAL STATEMENTS

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

Organization

The business focus of Capstone Financial Group, Inc. (the "Company") is to invest in stock of other companies. The Company seeks to discover, unlock and grow value in privately-held or illiquid companies, including through the exercise of friendly influence at a company in support of operational improvements and strategic initiatives. In some cases, the Company might be one of the largest shareholders of the other company.

The Company seeks to work closely and constructively with the management and boards of the other companies. While the Company does not manage the day-to-day operations of these companies, the Company seeks to maintain a thorough understanding of how they operate and evaluate their performance and prospects on an ongoing basis.

The Company may also seek to actively trade in its strategic investment positions and/or enter into private securities transactions with regard to those positions, to capitalize on price fluctuations and realize profits or minimize losses.

The Company was incorporated on July 10, 2012 under the laws of the State of Nevada, as Creative App Solutions, Inc. On August 23, 2013, the Company amended its articles of incorporation and changed its name to Capstone Financial Group, Inc.

Through December 31, 2012, the Company had not commenced significant operations and, in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 915, the Company was considered a development stage company. During the year ended December 31, 2013, the Company exited the development stage. Effective in 2014, the Company transitioned its business plan to its current business focus.

At December 31, 2014 the Company’s investments are entirely focused in one entity, Twinlab. Twinlab also holds a put to require the Company to exercise minimum monthly warrant amounts. The Company is currently selling a portion of its investment in Twinlab to fund this put obligation. Management believes that it will be able to liquidate a sufficient portion of its investment and/or raise additional capital to fund its put obligation as and when it becomes due. However, no assurance can be given that market conditions in the future will continue to allow the Company to sell its investments in sufficient quantities to fund its put obligation or to raise additional capital to do so. (See Note 3)

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying financial statements have been prepared using the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and the accounting and financial reporting conventions of the investment company industry.

Reclassifications

Certain reclassifications have been made to the prior year financial statements to conform to the current year presentation. The reclassification had no effect on the previous reported results of operations or stockholders’ equity.

-38-

CAPSTONE FINANCIAL GROUP, INC.

NOTES TO FINANCIAL STATEMENTS

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Use of Estimates

The preparation of financial statements in conformity with GAAP requires the Company’s 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 revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash Equivalents

The Company considers any investments in short-term money market funds with original maturities of three months or less to be cash equivalents.

Investments

Investments primarily comprise strategic, non-controlling equity ownership interests in privately held or illiquid businesses. The Company currently values its investments at fair value as determined by internal valuation guidelines as well as outside appraisals.

Strategic investments are reviewed on an ongoing basis to ensure that the carrying values of the investments have not been impaired. If the Company determines that an impairment loss on a strategic investment has occurred due to a decline in fair value or other market conditions, the investment is written down to its estimated fair value.

Fair Value Measurements

GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. GAAP establishes a fair value hierarchy that prioritizes the use of inputs used in valuation methodologies into the following three levels:

•

Level 1: Inputs to the valuation methodology are quoted prices, unadjusted, for identical assets or liabilities in active markets. A quoted price in an active market provides the most reliable evidence of fair value and shall be used to measure fair value whenever available.

•

Level 2: Inputs to the valuation methodology include quoted prices for similar assets or liabilities in active markets; inputs to the valuation methodology include quoted prices for identical or similar assets or liabilities in markets that are not active; or inputs to the valuation methodology that are derived principally from or can be corroborated by observable market data by correlation or other means.

•

Level 3: Inputs to the valuation methodology are unobservable and significant to the fair value measurement. Level 3 assets and liabilities include financial instruments whose value is determined using discounted cash flow methodologies, as well as instruments for which the determination of fair value requires significant management judgment or estimation.

The Company’s investments are valued by level within the fair value hierarchy. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The valuation methodology for each investment type and discussion of key unobservable inputs is described below.

-39-

CAPSTONE FINANCIAL GROUP, INC.

NOTES TO FINANCIAL STATEMENTS

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Common Stocks

Generally, when the Company invests in common stocks that are traded on the NASDAQ Markets or over-the-counter markets (such as the OTCBB, OTCQB or OTC Pink marketplaces), such common stocks are valued at the last traded price. If there is no trade on a measurement date, the Company will typically value the common stock at the closing bid price. However, in certain circumstances, the closing trading price is not considered to be a fair indication of the value for which the Company can sell the common stock. In such cases, the common stock must be analyzed to determine what exit price the Company would receive when liquidating the position. Investments in non-marketable common stocks at December 31, 2014 were valued based on subsequent transactions with unrelated third parties. These positions are classified as Level 3 securities by the Company.

Derivative Financial Instruments

Derivative financial instruments include stock options and call and put warrants at December 31, 2014. Derivatives are accounted for at fair value with changes in fair value reported in operations. The significant unobservable inputs used in the fair value measurement of the Company’s derivative financial instruments include the underlying common stock, duration, volatility and discount rate, which are used in the Black-Scholes model. Changes to any of those inputs in isolation would result in fluctuations in the fair value measurement.

Investment Transaction, Related Income and Expenses

Purchases and sales of investments are recorded on a trade-date basis. Realized gains and losses on investments are recognized on the first-in, first-out method. Dividend income on investments owned is recognized on the exdividend date, net of applicable withholding taxes.

Revenue Recognition

The Company recognizes revenue for services when all of the following conditions are satisfied: (1) there is persuasive evidence of an arrangement; (2) the investment banking service has been provided to the customer; (3) the amount of fees to be paid by the customer is fixed or determinable; and (4) the collection of fees is probable.

Earnings per Share

The Company follows ASC Topic 260 to account for the earnings per share. Basic earnings per common share calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. During periods when common stock equivalents, if any, are anti-dilutive they are not considered in the computation. As of December 31, 2014 and 2013, there were no dilutive common shares equivalents outstanding.

Concentration Risks

During the year ended December 31, 2014, the Company had $83,338 in revenue generated from two customers for consulting services and had interest income from a related party of $36,585. During the year ended December 31, 2013, the Company had $164,593 in revenue generated from two customers.

-40-

CAPSTONE FINANCIAL GROUP, INC.

NOTES TO FINANCIAL STATEMENTS

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Income Taxes

The Company follows ASC Topic 740 for recording the provision for income taxes. Deferred tax assets and liabilities are computed based upon the difference between the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate applicable when the related asset or liability is expected to be realized or settled. Deferred income tax expenses or benefits are based on the changes in the asset or liability each period. If available evidence suggests that it is more likely than not that some portion or all of the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized. Future changes in such valuation allowance are included in the provision for deferred income taxes in the period of change.

Deferred income taxes may arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. Deferred taxes are classified as current or non-current, depending on the classification of assets and liabilities to which they relate. Deferred taxes arising from temporary differences that are not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse.

The Company applies a more-likely-than-not recognition threshold for all tax uncertainties. ASC Topic 740 only allows the recognition of those tax benefits that have a greater than 50% likelihood of being sustained upon examination by the taxing authorities. As of December 31, 2014 the Company reviewed its tax positions and determined there were no outstanding or retroactive tax positions with less than a 50% likelihood of being sustained upon examination by the taxing authorities; therefore, this standard has not had a material effect on the Company.

Advertising costs

Advertising costs are expensed as incurred. For the years ended December 31, 2014 and 2013, advertising costs of $62,816 and $44,173, respectively, were included in general and administrative expenses.

Recent Accounting Pronouncements

The Company has evaluated the recent accounting pronouncements through the date of this filing, and management does not expect adoption of such pronouncements to have an impact on the Company’s financial statements.

NOTE 3 – INVESTMENTS, AT FAIR VALUE

Investments in securities and unrealized gain, net are comprised of the following at December 31, 2014.

		Cost		Estimated Fair Value		Unrealized Gain (Loss)
ASSETS
Common Stocks	$	6,215	$	8,350,500	$	8,344,288
Unlisted Call Options		2,492		6,312,801		6,310,309
Warrants - "A" (the First Warrant)		---		9,947,368		9,947,368
Warrants - "B" (the Second Warrant)		---		4,227,632		4,227,632
	$	8,707	$	28,838,301	$	28,829,597

LIABILITIES
Warrant put option	$	---	$	(9,973,684)	$	(9,973,684)

For the year ended December 31, 2014, the Company recorded a net unrealized gain on investment securities of $18,855,913.

-41-

CAPSTONE FINANCIAL GROUP, INC.

NOTES TO FINANCIAL STATEMENTS

NOTE 3 – INVESTMENTS, AT FAIR VALUE (CONTINUED)

During the first quarter of 2014, the Company purchased shares in a company traded on the OTC Markets for a total of $2,919. The Company currently categorizes these holdings as Level 3 assets. As of December 31, 2014, this investment is carried at $0 value under management’s valuation guidelines.

In August 2014, the Company purchased 10,987,500 split-adjusted shares of common stock of Twinlab Consolidated Holdings, Inc. (“Twinlab”) in private transactions from 25 shareholders for total consideration of $3,296. In November 2014, the Company sold 436,681 of these shares.

In August 2014, the Company purchased options to acquire 8,743,000 outstanding shares of Twinlab’s Common Stock (collectively, the “Call Options”) in a private transaction from 14 stockholders, for total consideration of $2,623. The Call Options exercise price is $0.0001 per share and the Call Options expire in August 2015. Such options are immediately exercisable and in February 2015, the Company exercised 7,244,500 of those options.

In September 2014, Twinlab issued to the Company a Series A Warrant to purchase up to 52,631,579 shares of Twinlab’s Common Stock at an exercise price of $0.76 per share (the “First Warrant”) and a Series B Warrant to purchase up to 22,368,421 shares of Twinlab’s Common Stock at an exercise price of $0.76 per share (the “Second Warrant”). Both the First Warrant and the Second Warrant are exercisable from October 2014 through October 2017.

Twinlab and the Company also entered into a Common Stock Put Agreement, dated as of September 30, 2014, as amended on December 15, 2014 (the “Put Agreement”). Pursuant to the Put Agreement, if the Company does not exercise the First Warrant by February 16, 2015 and thereafter at a rate of no less than 1,461,988 shares of Common Stock (“the Minimum Amount”) per month (the “Minimum Rate”) over the term of the First Warrant, Twinlab has the right (subject to certain conditions) to require the Company to exercise the First Warrant at the Minimum Rate for the duration of the First Warrant.

Fair Value of Financial Instruments

The Company's financial instruments recorded at fair value have been categorized based upon a fair value hierarchy in accordance with accounting guidance. The following fair value hierarchy table presents information about the Company's financial instruments measured at fair value.

	Assets and Liabilities Measured at
	Fair Value on a Recurring Basis
	December 31, 2014						December 31, 2013
	Level 2		Level 3		Total		Total
Assets
Financial instruments, at fair value:
Common Stocks	$	—	$	8,350,500	$	8,350,500	$	—
Unlisted Call Options		—		6,312,801		6,312,801		—
Warrants - "A" (the First Warrant)		—		9,947,368		9,947,368		—
Warrants - "B" (the Second Warrant)		—		4,227,632		4,227,632		—
Total Financial instruments, at fair value		—		28,838,301		28,838,301		—
Total assets held at fair value	$	—	$	28,838,301	$	28,838,301	$	—

Liabilities
Financial instruments, at fair value:
Warrant put option		—		9,973,684		9,973,684		—
Total liabilities held at fair value	$	—	$	9,973,684	$	9,973,684	$	—

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CAPSTONE FINANCIAL GROUP, INC.

NOTES TO FINANCIAL STATEMENTS

NOTE 3 – INVESTMENTS, AT FAIR VALUE (CONTINUED)

This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. For some products or in certain market conditions, observable inputs used in valuing certain financial assets and liabilities were unavailable. In situations where there is little, if any, market activity for an asset or liability at the measurement date, the fair value measurement objective remains to measure the financial asset at the price that would be received by the holder of the financial asset (or liability) in an orderly transaction that is not a forced liquidation or distressed sale at the measurement date.

At December 31, 2014, the Company recorded its investment in Twinlab common stock at $0.76 per share which is management's estimate of the fair market value and is based, in part, on the subsequent sale of Twinlab common shares to unrelated parties in 2015 (see Note 11).

At December 31, 2014, the Company recorded its investment in the Call Options at the estimated fair market value of $0.76 per option share, which reflects management’s estimate of the fair market value of the underlying common stock of Twinlab.

At December 31, 2014, the Company recorded its investment in the First Warrant and the Second Warrant and its liability under the Put Agreement at management's estimate of the fair market value using the Black-Scholes option pricing model with the following weighted-average assumptions:

	For the year ended
	December 31, 2014
Volatility	44%
Risk - free interest rate	0.58%
Dividend yield	-
Expected life in years	2

NOTE 4 – LINES OF CREDIT, NET – RELATED PARTY

On August 8, 2013, the Company entered into (as borrower) an unsecured $500,000 revolving line of credit with Capstone Affluent Strategies, Inc. (“Affluent”), which was owned and controlled by Darin Pastor. The line of credit bore interest at 2% per annum with principal and interest due on August 8, 2015. At December 31, 2013, the balance payable on the line of credit was $892,093.

On September 13, 2013, the Company entered into (as lender) an unsecured $500,000 revolving line of credit with Capstone Affluent Strategies, Inc., which was owned and controlled by Darin Pastor. In October 2013, the maximum amount available under this line of credit was increased to $2,000,000. The line of credit bore interest at 2% per annum with principal and interest due on September 13, 2015. At December 31, 2013, the balance receivable on the line of credit was $1,472,136.

Due to a right of offset, the receivable and payable under the crossing revolving lines of credit with Affluent had been presented in the accompanying balance sheet as a $580,043 net receivable at December 31, 2013.

As part of an October 28, 2014 transaction, the crossing revolving lines of credit with Affluent were cancelled, and the Company forgave its $1,089,617 net receivable thereunder. (See Note 8.)

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CAPSTONE FINANCIAL GROUP, INC.

NOTES TO FINANCIAL STATEMENTS

NOTE 5 – NOTE RECEIVABLE

On November 14, 2014 the Company loaned $600,000 to Twinlab’s chief executive officer/controlling shareholder under an unsecured note due December 29, 2015 bearing interest at 5%. At December 31, 2014 the balance receivable on the note is $603,952.

NOTE 6 – DEPOSIT

At December 31, 2013, the Company had made a $100,000 deposit related to an anticipated purchase transaction. In February 2014, the transaction was cancelled and the $100,000 was repaid to the Company. In 2014, the Company made a deposit of $65,000 toward an anticipated purchase transaction.

NOTE 7 – STOCKHOLDERS’ EQUITY

On September 6, 2013, the Company effected a 20-for-1 forward stock split of its $0.001 par value common stock and increased its authorized common stock to 2,000,000,000 shares. All shares and per share amounts have been retroactively restated to reflect this forward stock split.

NOTE 8 – DEEMED DIVIDEND TO RELATED PARTY; FORGIVENESS OF DEBT - RELATED PARTY

On October 28, 2014, the Company entered into a transaction in which it acquired directly from Darin Pastor (the former sole shareholder of Affluent) certain fixed assets and prepaid expenses of Affluent amounting to $152,429 and assumed certain promissory notes of Affluent (which had been dissolved in April 2014) in favor of Darin Pastor with an aggregate outstanding principal balance of $1,636,633. In the transaction, liabilities exceeded assets transferred and a deemed dividend of $1,484,204 was recorded in additional paid-in capital. As the transaction was between related parties, the assets and liabilities transferred were recorded at their carryover bases. In connection with such transaction, the crossing revolving lines of credit between the Company and Affluent (see Note 4) were cancelled; the Company forgave its $1,089,617 net receivable thereunder and recorded a $1,089,617 loss.

NOTE 9 – INCOME TAXES

The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.

At December 31, 2014 and 2013, the Company had cumulative federal operating loss carryforwards of $1,905,580 and $735,653, respectively, which begin to expire in 2032.

The Company recognizes deferred tax assets to the extent that the Company believes these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income and tax-planning.

Components of net deferred taxes are as follows at December 31, 2014 and 2013:

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CAPSTONE FINANCIAL GROUP, INC.

NOTES TO FINANCIAL STATEMENTS

NOTE 9 – INCOME TAXES (CONTINUED)

		2014		2013
Deferred tax assets:
Net operating loss carryforward	$	768,417	$	302,397
Total deferred tax assets		768,417		302,397
Less: Valuation allowance		—		(302,397	)
Net deferred tax assets	$	768,417	$	—

		2014		2013
Deferred tax liabilities:
Unrealized gains	$	7,511,140	$	—
Net deferred tax liabilities		7,511,140		—
Total deferred taxes	$	6,742,723	$	—

The valuation allowance for deferred tax assets as of December 31, 2014 and 2013 was $0 and $302,397, respectively. The net operating losses will begin to expire in 2032. In assessing the recovery of the deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income in the periods in which those temporary differences become deductible. Management considers the scheduled reversals of future deferred tax assets, projected future taxable income, and tax planning strategies in making this assessment.

Reconciliation between the statutory rate and the effective tax rate is as follows at December 31, 2014 and 2013:

	2014		2013
Federal statutory rate	34.0	%	(35.0	)%
State taxes, net of federal benefit	4.15	%	(0.00	)%
Change in valuation allowance	0	%	35	%
Effective tax rate	38.15	%	0	%

The components of income tax expense (benefit) for the years ended December 31, 2014 and 2013 are as follows:

		2014		2013
Current tax expense (benefit)	$	800	$	800
Deferred tax expense (benefit)		6,742,723		—
Total income tax expense (benefit)	$	6,743,523	$	800

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CAPSTONE FINANCIAL GROUP, INC.

NOTES TO FINANCIAL STATEMENTS

NOTE 10 – MARKET, CREDIT AND LIQUIDITY RISK

Market risk is the potential loss the Company may incur as a result of changes in the market or fair value of a particular financial instrument. Risks arise in options and warrant contracts from changes in the market or fair value of their underlying financial instruments.

Credit risk is the potential loss the Company may incur as a result of the failure of a counterparty or an issuer to make payments according to the terms of a contract. Credit risk can arise from investment activities in financially distressed issuers. To manage this risk, the Company may seek to diversify its investment portfolio with respect to specific credits, sectors and asset classes.

The Company is also subject to market concentration risk since a significant portion of its investment portfolio has similar characteristics, and is therefore affected similarly by changes in economic conditions.

Investments of the Company trade in relatively thin markets and throughout the year, depending upon market conditions, may be considered illiquid. As a result, the market values can be more volatile and difficult to determine relative to other securities. In addition, if the Company is required to liquidate all or a portion of its portfolio quickly, it may realize significantly less than the value at which it previously recorded its investments.

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CAPSTONE FINANCIAL GROUP, INC.

NOTES TO FINANCIAL STATEMENTS

NOTE 11 – SUBSEQUENT EVENTS

The Company has evaluated subsequent events through the date the financial statements were available to be issued. Except as noted below, there are no events which require adjustments to, or disclosure in, the financial statements for the period ended December 31, 2014.

In February 2015, the Company exercised the Call Options. Optionors honored the exercise as to 7,244,500 Twinlab shares, and the acquisition of the 7,244,500 Twinlab shares has been completed. Other optionors have not yet honored the exercise, as to at least 1,498,500 Twinlab shares.

In March and April 2015, the Company sold 2,210,756 Twinlab shares to unrelated third parties for approximately $1,680,159.

In April 2015, the Company partially exercised the First Warrant and received 657,895 Twinlab shares in exchange for an aggregate exercise price of approximately $500,000.

In April 2015, the Company entered into a 126-month Lease Agreement for 17,335 square feet of space in an office building at 8600 Transit Road, East Amherst, NY 14051, for the Company headquarters office. The lease extends to October 31, 2025. Base rent is $23,113 per month through April 30, 2016 (following a free base-rent period ending October 31, 2015), with annual 3% monthly base rent increases on each April 30 from 2016 through the end of the lease term.

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CREATIVE APP SOLUTIONS, INC.

WRITTEN CONSENT TO ACTION WITHOUT MEETING OF THE BOARD OF DIRECTORS

CREATIVE APP SOLUTIONS, INC.

A Nevada Corporation Dated: August 26, 2013

The undersigned, being all the Directors of CREATIVE APP SOLUTIONS, INC., a Nevada Corporation, hereby execute this written consent to action, as provided by Section 78.315 of the Nevada Revised Statutes and in lieu of a formal meeting. The undersigned hereby waive, pursuant to Section 78.375 of the Nevada Revised Statutes and Article III , Section 14 of the By laws, all requirements of notice, including notice of purpose, whether contained in the Nevada Constitution , Nevada Revised Statutes or the By-laws of this Corporation , and do hereby adopt the following resolutions:

WHEREAS, on August 26, 201 3, Mr. Ryan Faught submitted his letter of resignation as President, CEO and Director to the Company; and

WHEREAS, on August 26, 201 3, Mr. Matthew Lane submitted his letter of resignation as Secretary of the Company; be it

RESOLVED , the Board of Directors (the "Board") of Creative App Solutions, Inc., accepts the resignation of Mr. Ryan Faught as President , CEO and Director of the Company, effective immediately; and be it

FURTHER RESOLVED, the Board accepts the resignation of Mr. Matthew Lane as Secretary and Treasurer of the Company, effective immediately; and be it

FURTHER RESOLVED, that the Board of Directors appoint Mr. Darin Pastor to the position of Chief Executive Officer ("CEO"), Secretary, Treasurer, and Chairman of the Board of the Company; and be it

FURTHER RESOLVED, that the Board of Directors appoint Mr. George Schneider to the positions of President Chief Investment Officer ("CIO"), and a Director of the Company; and be it

AUTHORIZATION OF CORPORATE ACTION

Creative App Solutions, Inc. - Resignation of Faught & Lane		August 26, 2013
Page 1 of 2

RESOLVED THAT each officer of the Corporation is hereby authorized and directed to do and perform , or cause to be done and performed , al l such acts, deeds and things and to make, execute and deliver, or cause to be made, executed and delivered, all such agreements, undertakings , documents, instruments or certificates in the name and on behalf of the Corporation or otherwise as each such officer may deem necessary or appropriate to effectuate or carry out fully the purpose and intent of the foregoing resolutions and any of the transactions contemplated thereby.

All actions heretofore taken by any director or officer of the Corporation in connection with any matter referred to in the foregoing resolutions are hereby approved, ratified and confirmed in all respects .

The secretary and any assistant secretary of the Corporation or any other officer of the Corporation , is hereby authorized to certify and deliver, to any person to whom such certification and delivery may be deemed necessary or appropriate in the opinion of such officer, a true copy of the foregoing resolutions .

APPROVAL

Dated: August 26, 2013

/s/ Darin Pastor

Darin Pastor, Chairman

/s/ George Schneider

George Schneider, Director

IN WITNESS WHEREOF:	/s/ Darin Pastor
	Darin Pastor, Secretary

The following is appended hereto:

•

Resignation Letter of Ryan Faught - dated August 26, 2013

•

Resignation Letter of Matthew Lane - dated August 26, 201 3

Creative App Solutions, Inc. - Resignation of Faught & Lane		August 26, 2013
Page 2 of 2

AGREEMENT

This Agreement ("Agreement") is made by and between Matthew Lane ("Employee") and Creative App Solutions, Inc., a Nevada corporation (the "Company) (hereinafter collectively "the parties").

WHEREAS, Employee is employed by the Company as Secretary and Treasurer; and

WHEREAS, the parties acknowledge it is in their individual and mutual best interests for Employee to terminate his services as an officer and employee of the Company effective August 26, 2013 and to resign as Secretary of the Company effective August 26, 2013; and

WHEREAS, the parties wish to define the terms and conditions of Employee's resignation and separation from employment with the Company;

Now, THEREFORE, in exchange for and in consideration of the following mutual covenants and promises, the undersigned parties, intending to be legally bound, hereby agree as follows:

1. Retirement. Employee agrees to terminate his employment with the Company effective August 26, 2013 ("Termination Date"). On the Termination Date, Employee's employment with the Company and all further compensation, remuneration and eligibility of Employee under Company benefit plans shall terminate, except as otherwise provided in this Agreement or by applicable law.

2. Resignations. Employee hereby resigns as an officer of the company, effective August 26, 2013.

3. Termination of Employment Agreement and Cancellation of Matthew Lane shares.

(a)

Employee hereby tenders to Company all 20,000 outstanding shares of common stock held by Employee in Company,

(b)

The Employment by and between the Employee and the Company shall terminate effective August 26, 2013.

4. Cooperation, Non-Disparagement, and Indemnity. Neither the Employee nor the officers of the Company shall state or otherwise publish anything about the other party which would adversely affect the reputation, image or business relationships and goodwill of the other party in its/his market and community at large, except as required by law. Employee shall fully cooperate with the Company in defense of legal claims asserted against the Company, and other matters, which require the Employee's testimony or input regarding knowledge gained during the course of his employment. The Company agrees to reimburse Employee for reasonable costs and expenses incurred as a result thereof. Employee agrees that he will not speak or communicate with any party or representative of any party, who is known to Employee to be either adverse to the Company in litigation or administrative proceedings or to have threatened to commence litigation legal action, unless given express permission to do so by the Company, or is otherwise compelled by law to do so, and then only after advance notice to the Company. Additionally, for a period of one year following the Termination Date, Employee agrees to be bound by and follow the same standards and duty of loyalty to the Company as are required of the Company's employees and officers, except that Employee may engage in other employment and related activities. The Company agrees to indemnify Employee for liabilities and costs incurred by Employee by reason of his employment with the Company, on the same basis as it does in similar circumstances with other employees and officers.

-1-

5. Release of All Claims.

(a) Release of Company by Employee. In consideration of the receipt of the sums and covenants stated herein, Employee does hereby, on behalf of himself, his heirs, administrators, executors, agents, and assigns, forever release, requite, and discharge the Company and its agents, parents, subsidiaries, affiliates, divisions, officers, directors, employees, predecessors, successors, and assigns ("Released Parties"), from any and all charges, claims, demands, judgments, actions causes of action, damages, expenses, costs, attorney's fees, and liabilities of any kind whatsoever, whether known or unknown, vested or contingent, in law, equity or otherwise, which Employee has ever had, now has, or may hereafter have against said Released Parties for or on account of any matter, cause or thing whatsoever which has occurred prior to the date of this signing this Agreement. This release of claims includes, without limitation of the generality of the foregoing, any and all claims which are related to Employee's employment with the Company and his retirement from his officer position and his employment on August 26, 2013; and may and all rights which Employee has or may have had under the following laws: Title VII of the Civil Rights Act of 1964, as amended by the Equal Employment Opportunity Act of 1972, the Civil Rights Act of 1991; the Employee Retirement income Security Act, 29 U.S.C Section. 1001 et seq.; the Americans With Disabilities Act; the Age Discrimination in Employment Act, as amended; and all other federal, state, and local statutes, regulations or public policies, as well as the laws of contract, torts, and all other subjects; provided, however, that nothing herein shall be deemed to affect any rights of Employee under this Agreement or to restricted shares; and provided further that nothing herein shall be deemed to affect any rights of Employee to indemnity for liabilities incurred for acts taken in good faith in the course and scope of employment with the Company which acts are otherwise covered under the terms and conditions of Directors and Officers liability insurance maintained by Company during the employment of Employee.

(b) Release of Employee by Company. The Company does hereby, on behalf of itself and its agents, parents, subsidiaries, affiliates, divisions, officers, directors, employees, predecessors, successors and assigns, forever release, requite, and discharge the Employee and his immediate family members, heirs, administrators, executors, attorneys, agents and assigns, from any and all charges, claims, demands, judgments, actions, causes of action, damages, expenses, costs, attorneys' fees, and liabilities of any kind whatsoever, whether known or unknown, vested or contingent, in law, equity or otherwise, which the Company ever had, now has, or may hereafter have against Employee for or on account of any matter, cause or thing whatsoever which has occurred prior to the date of Employee's signing this Agreement; provided, however, that nothing herein shall be deemed to release or affect any rights of the Company pursuant to this Agreement.

6. Complete and Absolute Defense. This Agreement constitutes, among other things, a full and complete release of any and all claims released by either party, and it is the intention of the parties hereto that this Agreement is and shall be a complete and absolute defense to anything released hereunder. The parties expressly knowingly waive their respective rights to assert any claims against the other which are released hereunder, and covenant not to sue the other party or Released Parties based upon any claims released hereunder. The parties further represent and warrant that no changes, claims, or suits, of any kind have been filed by either against the other as of the date of this Agreement.

7. Non-Admission. It is understood that this Agreement is, among other things, an accommodation of the desires of each party, and the above-mentioned payments and covenants are not, and should not be construed as, an admission or acknowledgment by either party of any liability whatsoever to the other party or any other person or entity.

-2-

8. Knowing and Voluntary Execution. Each of the parties hereto further states represents that he or it has carefully read the foregoing Agreement and knows the contents thereof, and that he or it has executed the same as his or its own free act and deed. Employee further acknowledges that he has been and is hereby advised to consult with an attorney concerning this Agreement and that he had adequate opportunity to seek the advice of legal counsel in connection with this Agreement. Employee also acknowledges that he has had the opportunity to ask questions about each and every provision of this Agreement and that he fully understands the effect of the provisions contained herein upon his legal rights.

9. Executed Counterparts. This Agreement may be executed in one or more counterparts, and any executed copy of this Agreement shall be valid and have the same force and effect as the originally executed Agreement.

10. Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Nevada.

11. Modification. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by the Employee and the Company.

12. Assignability. Employee's obligations and agreements under this Agreement shall be binding on the Employee’s heirs, executors, legal representatives and assigns and shall insure to the benefits of any successors and assigns of the Company. The Company may assign this Agreement or any of its rights or obligations arising hereunder to any party, as part of a sale of its assets or other similar change of control.

13. Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto in respect of the subject matter hereof, and this Agreement supersedes all prior contemporaneous agreements between the parties hereto in connections with the subject matter hereof.

14. Further Assurances. The parties mutually agree to execute and deliver such additional documents as is reasonably necessary to give full force and effect to this Agreement.

-3-

IN WITNESS WHEROF, the undersigned have executed this Agreement as of the 26^th day of August 2013.

EMPLOYEE:

/s/Matthew Lane

__________________________________

Matthew Lane

Company:

Creative App Solutions, Inc., a Nevada Corporation

By: /s/ Darin Pastor

Darin Pastor, CEO

-4-

AGREEMENT

This Agreement ("Agreement") is made by and between Ryan Faught ("Employee") and Creative App Solutions, Inc., a Nevada corporation (the "Company) (hereinafter collectively "the parties").

WHEREAS, Employee is employed by the Company as Secretary and Treasurer; and

WHEREAS, the parties wish to define the terms and conditions of Employee's resignation and separation from employment with the Company;

Now, THEREFORE, in exchange for and in consideration of the following mutual covenants and promises, the undersigned parties, intending to be legally bound, hereby agree as follows:

2. Resignations. Employee hereby resigns as an officer of the company, effective August 26, 2013.

3. Termination of Employment Agreement and Cancellation of Ryan Faught shares.

(a)

Employee hereby tenders to Company all 4,000,000 outstanding shares of common stock held by Employee in Company,

(b)

The Employment by and between the Employee and the Company shall terminate effective August 26, 2013.

-1-

5. Release of All Claims.

-2-

10. Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Nevada.

14. Further Assurances. The parties mutually agree to execute and deliver such additional documents as is reasonably necessary to give full force and effect to this Agreement.

-3-

IN WITNESS WHEROF, the undersigned have executed this Agreement as of the 26^th day of August 2013.

EMPLOYEE:

/s/ Ryan Faught

__________________________________

Ryan Faught

Company:

Creative App Solutions, Inc., a Nevada Corporation

By: /s/ Darin Pastor

Darin Pastor, CEO

-4-

AGREEMENT

This AGREEMENT (“Agreement”) dated as of October 28, 2014, is made by and between Darin Pastor, an individual (“Pastor”), and Capstone Financial Group, Inc., a Nevada corporation (the “Corporation”).

RECITALS

WHEREAS, on December 13, 2013, the Corporation entered into a reverse triangular merger by and among Capstone Sub Co (“Sub Co.”), a Nevada corporation and a wholly owned subsidiary of the Company, and Capstone Affluent Strategies, Inc. (“Affluent”), a California Corporation. (the “Merger Agreement”) Sub Co and Affluent being the constituent entities in the Merger. Pursuant to the terms of the Merger, Sub Co merged with Affluent wherein Sub Co ceased to exist and Affluent became a wholly owned subsidiary of the corporation (the “Merger.”); and

WHEREAS, on January 15, 2014 the Merger was completed, however as a result of being unable to complete a timely audit of the financial statements, among other things, on May 14, 2014, the Corporation, Sub Co. and Affluent executed a Rescission Letter Agreement, wherein they mutually agreed to rescind the Merger Agreement rendering the Merger Agreement void and of no effect, without any liability on any party to the Merger Agreement (“Merger Rescission”); and

WHEREAS, on April 28, 2014, a Domestic Stock Corporation Certificate of Dissolution for Affluent was prematurely filed with the Secretary of State of California dissolving Affluent as a corporation (the “Affluent Dissolution.”); and

WHEREAS, as a result of the Affluent Dissolution, neither the Corporation, Affluent nor Pastor were provided the opportunity to properly document and effectuate their intentions subsequent to the Merger Rescission; and

WHEREAS, Pastor was the President and Director of Affluent prior to its dissolution and the Corporation still desires to utilize Pastor’s expertise, knowledge base and experience, and believes that Pastor’s efforts and development of the Affluent business have an overriding redeeming economic value to the Corporation; and

WHEREAS, the Corporation wishes to assume certain assets from Affluent in exchange for the assumption of certain liabilities; and

WHEREAS, Pastor and the Corporation feel it is in the best interests of all involved to enter into this Agreement memorializing the intentions, as if they were originally given the chance to enter into such; so

NOW, THEREFORE, in consideration of the foregoing recitals, the following mutual covenants and agreements, and other good and valuable consideration, the receipt and

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sufficiency of which are hereby acknowledged by each of the parties hereto, the Corporation and Pastor hereby agree as follows:

1. Assignment and Transfer by Pastor and Affluent. Subject to the terms and conditions of this Agreement, Pastor and Affluent hereby transfers, assigns and conveys to Corporation all rights, title and interest in and to the Assets, listed in Exhibit A attached hereto, (“Assets”) subject to all liens and encumbrances against such Assets.

2. Acceptance and Assumption by Corporation. Corporation hereby agrees to and shall accept and assume the rights, title and interest in the Assets in consideration and in exchange for assuming the obligations contained in and under the Liabilities listed in Exhibit B Attached hereto (“Liabilities”); in

3. Representations and Warranties of Pastor and Affluent. Pastor and Affluent represents and warrants to the Corporation as follows:

(a) Pastor and Affluent, individually and collectively, possess all ownership rights in and to the Assets and no other person has any rights therein or thereto.

(b) Pastor and Affluent, individually and collectively have paid in full all taxes, levies and other assessments of any kind to which any of the Assets are subject.

(c) No consent, approval, notice or filing pursuant to applicable law (including, without limitation, any community property law) or otherwise is required to be made or to be obtained from any person not a party to this Agreement in connection with the transactions contemplated by this Agreement, except such consents, approvals, notices or filings as have already been made or obtained on or prior to the date hereof.

(d) Pastor and Affluent, jointly and severally, agree to indemnify the Corporation to the fullest extent permitted by applicable law against all losses, expenses (including reasonable attorneys' fees and expenses), claims, damages or liabilities based on, or arising out of the leases, liens, or encumbrances related to the Assets or (ii) based on, arising out of or pertaining to the transactions contemplated by this Agreement.

4. Tax Consequences. Pastor and Affluent will look solely to, and rely upon, his/their own advisors with respect to the tax consequences of this Agreement.

5. Assignment. This Agreement may not be changed, supplemented or otherwise modified except by a writing signed by the parties hereto.

6. Notices. Any notice to be given under this Agreement shall be in writing and shall be deemed effective upon personal delivery or upon deposit in the U.S. mail, registered or certified, postage prepaid and properly addressed to the party entitled to such notice at the address indicated as such party may designate by ten (10) days’ advance written notice under this section to all other parties to this Agreement.

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7. No Waiver. The failure of any party at any time to enforce performance by another party of any provision of this Agreement shall in no way affect the party's rights to enforce that performance, nor shall the waiver by any party of any breach of any provision of this letter agreement be deemed to be a waiver by that party of any other breach of that provision or any other provision of this Agreement.

8. Undertaking. Pastor and Affluent hereby agree to take whatever additional action and execute whatever additional documents the Corporation may deem necessary or advisable in order to carry out or effect one or more of the obligations of this Agreement.

9. Governing Law. This Agreement shall be governed by, construed under and enforced in accordance with, the laws of the State of California, as such laws are applied to contracts entered into and performed in such State without resort to that State’s conflict-of-laws provisions.

10. Successors and Assigns. The provisions of this Agreement shall inure to the benefit of, and be binding upon, the Corporation and its successors and legal representatives, heirs, legatees, distributees, and transferees by operation of law, whether or not any such person shall have become a party to this Agreement and have agreed in writing to join herein and be bound by the terms and conditions hereof.

11. Counterparts. This Agreement may be executed in one or more counterparts. Each such counterpart shall be deemed to be an original and all such counterparts shall together constitute one and the same instrument.

12. Captions. The captions and headings of the sections included in this Agreement are inserted for convenience only and are not intended to affect the meaning or interpretation of this Agreement.

13. Entire Agreement. This instrument contains the entire agreement of the parties relating to the rights granted and obligations assumed in this instrument. Any oral representations or modifications concerning this instrument shall be of no force or effect unless contained in a subsequent written modification signed by the party to be charged.

14. Attorneys' Fees. If any legal action, arbitration or other proceeding is brought for the enforcement of this Agreement, or because of any alleged dispute, breach, default or misrepresentation in connection with this Agreement, the successful or prevailing party shall be entitled to recover actual attorneys' fees (including fees for paraprofessionals and similar personnel and disbursements) and other costs it incurs in that action or proceeding, in addition to any other relief to which it may be entitled. The parties agree that actual attorneys' fees shall be based on the attorneys' fees actually incurred (based on the attorneys' customary hourly billing rates) rather than the court or arbitrator making an independent inquiry concerning reasonableness.

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15. Remedies Cumulative. The remedies of each party contained in this Agreement are cumulative and shall not exclude or diminish any other remedies to which such party may be lawfully entitled.

16. Dispute Resolution. All claims, disputes and other matters in controversy (“Dispute”) arising directly or indirectly out of or related to this Agreement, or the breach thereof, whether contractual or noncontractual, and whether during the term or after the termination of this Agreement, shall be resolved exclusively according to the procedures set forth in this Section.

(a) Neither party shall commence an arbitration proceeding pursuant to the provisions of paragraph (b) below unless such party shall first give a written notice (a “Dispute Notice”) to the other party setting forth the nature of the Dispute. The parties shall attempt in good faith to resolve the Dispute by mediation under the American Arbitration Association Commercial Mediation Rules in effect on the date of the Dispute Notice. If the parties cannot agree on the selection of a mediator within twenty (20) days after delivery of the Dispute Notice, the mediator shall be selected by the American Arbitration Association. If the Dispute has not been resolved by mediation within sixty (60) days after delivery of the Dispute Notice, then the Dispute shall be determined by arbitration in accordance with the provisions of subparagraph (b) below.

(b) Any Dispute that is not settled by mediation as provided in paragraph (a) above shall be resolved by arbitration before a single arbitrator appointed by the American Arbitration Association or its successor in Clark County. The determination of the arbitrator shall be final and absolute. The arbitrator shall be governed by the duly promulgated rules and regulations of the American Arbitration Association or its successor then in effect, and the pertinent provisions of the laws of the State of California relating to arbitration. The decision of the arbitrator may be entered as a final judgment in any court of the State of California or elsewhere.

[Signature page follows]

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IN WITNESS WHEREOF, each of Pastor, Affluent and the Corporation has executed this Agreement as of the date first above written.

CORPORATION:

Capstone Financial Group, Inc. a Nevada corporation

/s/ George Schneider

George Schneider, President

PASTOR:

/s/ Darin Pastor

Darin Pastor, Individual

AFFLUENT:

/s/ Darin Pastor

Darin Pastor, former President

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EXHIBIT A

DESCRIPTION OF ASSETS

The Assets of Capstone Affluent Strategies, Inc. and/or Darin Pastor which were owned and used by Capstone Affluent Strategies, Inc. and/or the directors and officers of Capstone Affluent Strategies, Inc. subject to this Agreement:

NAME	DESCRIPTION	VALUE
Office Lease Capstone Affluent Strategies, Inc. and 2600, Michelson Drive, LLC (Edgecore) dated April 1, 2013	Prepaid Lease for the office space located for Suite 700 at 2600, Michelson Drive, Irvine CA. Termination date: March 31, 2015	$509,004 prepaid
Regus Online Service Agreement- Lease for office space in New York, New York	Lease for office space in New York, New York	$85/month
Travelers Property Casualty Company	Travelers Insurance to insure the furniture and fixtures in the Michelson Suite 700 office space.	$1,900 a year
Cort Rental Agreement	Rental Agreement for office furniture	$120,124
Cox Communications Services Agreement	Cox phone, cable and internet agreement prepaid for 24 months	$57,882.72
Red Rock Cabling and Installation	Cabling and Installation of (Sharp 60” 1080P LCD TV & Sharp 70” 1080P LCD TV)	$14,218.22
Coastal Gardens Agreement	Agreement to provide plants for the office space, prepaid in advance for 24 months	$5,902.89
Building Signage	Capstone Affluent Strategies Signage paid in full	$3,795.40
Lock Smith Costs	Cost to hire Locksmith to replace locks and keys	$2,200.02
CDI Coastline Maintenance Agreement	Agreement for Maintenance of Irvine Building	$6,318.17
Office Technology	Three printers, Wi-Fi routers & Adapters	$2,000
Office Technology- Televisions	Cost of two televisions (Sharp 60” 1080P LCD TV & Sharp 70” 1080P LCD TV)	$10,000

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Payroll paid to former Affluent employees now working for the Corporation, and being paid wages from Pastor’s personal account.

EMPLOYEE NAME	TITLE	PAY PER PERIOD (every other Friday)
Darin Pastor	Chief Executive Officer	$495.00
Halford Johnson	Chief Financial Officer	$3,461.54
Tracy Pastor	Chief Brand Officer	$360.00
Tom Radice Jr.	Senior Vice President	$1,900.00
		$5,731.44 per Period (with deductions)

Total Blue Shield Benefits paid to eligible above employees: $4,084.30 per month

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EXHIBIT B

DESCRIPTION OF LIABILITES

The Liabilities of Capstone Affluent Strategies, Inc. and/or Darin Pastor which were the obligations of Capstone Affluent Strategies, Inc. and/or the directors and officers of Capstone Affluent Strategies, Inc. subject to this Agreement:

Promissory Note dated December 31, 2012, payable to Darin Pastor, in the amount for

$1,339,772.50 with the minimal federal interest rate per annum published by the Internal Revenue Service until the Maturity Date of October 4, 2017, subject to the terms of Principal plus accrued interest Forgiveness schedule attached thereto as Exhibit A.

Promissory Note dated October 22, 2012, payable to Darin Pastor, in the amount for

$577,373.47 with the minimal federal interest rate per annum published by the Internal Revenue Service until the Maturity Date of October 4, 2017, subject to the terms of Principal plus accrued interest Forgiveness schedule attached thereto as Exhibit A.

Promissory Note dated October 4, 2012, payable to Darin Pastor, in the amount for

$1,893,035.72 with the minimal federal interest rate per annum published by the Internal Revenue Service until the Maturity Date of October 4, 2017, subject to the terms of Principal plus accrued interest Forgiveness schedule attached thereto as Exhibit A.

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AMENDMENT TO AGREEMENT

This Amendment to Agreement (this “Amendment”) is made with regard to the following facts:

1. The undersigned entered into an Agreement dated October 28, 2014 pertaining to the transfer of assets to and assumption of liabilities by Capstone Financial Group, Inc. (the “Agreement”).

2. Exhibits A and B to the Agreement identified the specific assets being transferred to, and the specific liabilities being assumed by, Capstone Financial Group, Inc. Such exhibits also set forth the “value” (in fact, what was set forth as value was the original basis/book value of those assets) of the specified assets and the current amounts owing on the specified liabilities.

3. But for a scrivener’s error, Exhibits A and B to the Agreement would have been drafted to also identify the amortized/depreciated basis/book value of the specified assets as of October 28, 2014 and to state correctly (rather than incorrectly) the current amounts owing on the specified liabilities as of October 28, 2014.

4. The undersigned have now agreed as to how Exhibits A and B to the Agreement are to be amended in order to correctly and fully set forth the undersigned’s actual October 28, 2014 meeting of the minds.

5. The undersigned all hereby agree that (a) the Agreement is hereby amended ab initio so that its Exhibit A reads in full as set forth in Exhibit A to this Amendment, and (b) the Agreement is hereby amended ab initio so that its Exhibit B reads in full as set forth in Exhibit B to this Amendment.

6. The undersigned confirm their prior agreements in an Agreement to Reform Promissory Notes Due to Scrivener’s Error, dated December 15, 2014, that the notes assumed by Capstone Financial Group, Inc. in the Agreement were reformed and Capstone Financial Group, Inc. re-confirms its binding obligations to Darin R. Pastor under the assumed notes as so reformed and with Capstone Financial Group, Inc. being substituted for Capstone Affluent Strategies, Inc. as “Borrower” for all purposes of the assumed notes.

7. Except as expressly set forth in this Amendment, the Agreement remains unchanged and in full force and effect. IN WITNESS WHEREOF, the undersigned have signed this Amendment to Agreement as of December 31, 2014.

	/s/ DARIN R. PASTOR
	DARIN R. PASTOR

CAPSTONE AFFLUENT STRATEGIES, INC., a dissolved corporation

	By:	/s/ Darin R. Pastor
		Darin R. Pastor, formerly its sole director and officer and (until January 15, 2014) its sole stockholder

By: Capstone Financial Group, Inc., its sole stockholder after January 15, 2014

By:	/s/ George L. Schneider
	George L. Schneider, President

CAPSTONE FINANCIAL GROUP, INC.

By:	/s/ George L. Schneider
	George L. Schneider, President

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EXHIBIT A

DESCRIPTION OF ASSETS

The Assets subject to this Agreement are:

NAME	DESCRIPTION	ORIGINAL BASIS	AMORTIZED/ DEPRECIATED BASIS
Office Lease Capstone Affluent Strategies, Inc. and 2600, Michelson Drive, LLC (Edgecore) dated April 1, 2013	Prepaid Lease for the office space located for Suite 700 at 2600, Michelson Drive, Irvine CA. Termination date: March 31, 2015	$509,004 prepaid	$145,596
Regus Online Service Agreement- Lease for office space in New York, New York	Lease for office space in New York, New York	$85/month	0
Travelers Property Casualty Company	Travelers Insurance to insure the furniture and fixtures in the Michelson Suite 700 office space.	$1,900 a year	0
Cort Rental Agreement	Rental Agreement for office furniture	$120,124	0
Cox Communications Services Agreement	Cox phone, cable and internet agreement prepaid for 24 months	$57,882.72	0
Red Rock Cabling and Installation	Cabling and Installation of (Sharp 60” 1080P LCD TV & Sharp 70” 1080P LCD TV)	$14,218.22	0
Coastal Gardens Agreement	Agreement to provide plants for the office space, prepaid in advance for 24 months	$5,902.89	0
Building Signage	Capstone Affluent Strategies Signage paid in full	$3,795.40	0
Lock Smith Costs	Cost to hire Locksmith to replace locks and keys	$2,200.02	0
CDI Coastline Maintenance Agreement	Agreement for Maintenance of Irvine Building	$6,318.17	0
Office Technology	Three printers, Wi-Fi routers & Adapters	$2,000	0
Office Technology- Televisions	Cost of two televisions (Sharp 60” 1080P LCD TV & Sharp 70” 1080P LCD TV)	$10,000	$6,833

Assembled workforce/executive team: Payroll wages from Pastor’s personal account have been paid at the following biweekly rate to former Affluent employees now working for Capstone Financial Group, Inc.:

EMPLOYEE NAME	TITLE	PAY PER PERIOD (every other Friday)
Darin Pastor	Chief Executive Officer	$495.00
Halford Johnson	Chief Financial Officer	$3,461.54
Tracy Pastor	Chief Brand Officer	$360.00
Tom Radice Jr.	Senior Vice President	$1,900.00
		$5,731.44 per Period (with deductions)

Total Blue Shield Benefits paid for eligible above employees: $4,084.30 per month

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EXHIBIT B

DESCRIPTION OF LIABILITES

The Liabilities subject to this Agreement are the obligations associated with:

Promissory Note dated December 31, 2012, payable to Darin Pastor, in the original principal amount of

$1,339,772.50, bearing interest at the minimal federal interest rate per annum published by the Internal Revenue Service until the Maturity Date of October 4, 2017, subject to all previous payments thereon and the Forgiveness schedule attached thereto.

Promissory Note dated October 22, 2012, payable to Darin Pastor, in the original principal amount of

$577,373.47, bearing interest at t h e min mal federal interest rate per annum published by the Internal Revenue Service until the Maturity Date of October 4, 2017, subject to all previous payments thereon and the Forgiveness schedule attached thereto.

Promissory Note dated October 4, 2012, payable to Darin Pastor, in the original principal amount of $1,893,035.72, bearing interest at the minimal federal interest rate per annum published by the Internal Revenue Service until the Maturity Date of October 4, 2017, subject to all previous payments thereon and the Forgiveness schedule attached

thereto.

The parties confirm that the obligations associated with all notes payable by Capstone Affluent Strategies, Inc. and/or Darin Pastor to Capstone Financial Group, Inc. are hereby forgiven; that the amount of such principal/interest forgiveness is deemed to be payments on the obligations associated with the assumed notes; and that, considering all things, the outstanding principal balance of and accrued interest on the obligations associated with the assumed notes as of October 28, 2014 was $1,636,633.

PROMISSORY NOTE

$600,000		New York, New York
		November 14, 2014

FOR VALUE RECEIVED, Thomas A. Tolworthy, an individual (“Maker”), promises to pay to the order of Capstone Financial Group, Inc., a Nevada corporation (“Lender”) the principal amount of $600,000 plus 5% per annum simple interest accrued on the principal balance from time to time outstanding.

All principal and accrued interest shall be payable on December 29, 2015. Provided, that Lender may, at its option, declare to be due and payable immediately the entire remaining principal amount of and all accrued interest on this Note, upon the happening of any of the following events: (a) Maker makes a general assignment for the benefit of creditors, (b) Maker files any petition or action for relief under any bankruptcy, reorganization, insolvency or moratorium law or any other law for the relief of, or relating, to debtors (“Bankruptcy Laws”), (c) an involuntary petition is filed against Maker under any Bankruptcy Law and such petition has not been dismissed or vacated within 60 days after it was filed, or (d) an order appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official for Maker or of any substantial part of his property is issued and such order has not been stayed, dismissed or vacated within 60 days after it was issued.

All payments under this Note shall be applied first to accrued but unpaid interest, if any, and then to principal. Any principal or interest not paid when due hereunder shall bear interest from its due date at 10% per annum simple interest (in addition to and not exclusive of Lender’s collection and other rights and remedies).

Notwithstanding any other provision of this Note, the holder of this Note does not intend to charge and Maker shall not be required to pay any interest or other fees or charges in excess of the maximum permitted by applicable law; any payments in excess of such maximum shall be refunded to Maker or credited to reduce principal hereunder.

Payments of principal and/or interest will be made by cashier’s check or wire transfer in immediately available United States funds sent to the holder of this Note at the address furnished to Maker for that purpose.

At any time and from time to time, Maker may voluntarily prepay this Note either in whole or in part without penalty or premium.

Maker waives diligence, presentment, protest and demand and also notice of protest, demand, dishonor and nonpayment of this Note, and all other demands and

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notices of any kind in connection with the execution, delivery, performance and enforcement of this Note.

Upon receipt of evidence reasonably satisfactory to Maker of the loss, theft, destruction or mutilation of this Note, Maker shall issue a new Note, of like tenor and amount, in lieu of such lost, stolen, destroyed or mutilated Note.

Lender shall (and by acceptance of this Note agrees to) deliver this original manually-executed Note (or the manually-executed replacement Note as provided under the preceding paragraph) at the principal office of Maker for cancellation before or forthwith after payment of all principal and accrued interest.

Maker agrees, subject only to limitations imposed by applicable law, to pay Lender’s reasonable costs in collecting this Note, including reasonable attorney's fees (and specifically including but not limited to all such collection efforts that may be made through a bankruptcy court).

This Note shall be governed by and construed in accordance with the internal laws of the State of New York without giving effect to the conflicts of laws principles thereof.

In the event any one or more of the provisions of this Note shall for any reason be held to be invalid, illegal or unenforceable, in whole or in part or in any respect, or in the event that any one or more of the provisions of this Note operate or would prospectively operate to invalidate this Note, then and in any such event, such provision(s) only shall be construed or reformed so as to realize the parties’ intention to the maximum extent possible while still being valid, legal and enforceable, and in all events the remaining provisions of this Note shall remain operative and in full force and effect and in no way shall be affected, prejudiced, or disturbed thereby.

The rights and remedies of Lender shall be cumulative and concurrent, and may be pursued singularly, successively or together.

No provision of this Note shall be interpreted for or against Maker or Lender because that person or that person’s legal representative drafted such provision.

The terms of this Note cannot be amended or waived except in a writing signed by Maker and the holder of this Note. The acceptance by Lender of any payment hereunder which is less than the payment in full of all amounts due and payable at the time of such payment shall not constitute a waiver of the right to payment in full.

/s/Thomas A. Tolworthy

Thomas A. Tolworthy

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LEASE AGREEMENT

THIS LEASE AGREEMENT is made as of this 29th day of April 2015, by and between CAPSTONE FINANCIAL GROUP, INC., a Nevada corporation having its principal office at 3960 Howard Hughes Parkway, Suite 500, Las Vegas, NV 89169 (“Tenant”) and ISKALO 8600 TRANSIT LLC, a New York limited liability company having an office c/o Iskalo Development Corp., Harbinger Square, 5166 Main Street, Williamsville, New York 14221 (“Landlord”).

NOW, THEREFORE, for one dollar ($1.00) and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Landlord and Tenant hereby agree as follows:

Article 1 BASIC LEASE INFORMATION

1.1 Basic Lease Information. As used in this Lease, the following basic lease terms shall have the meanings ascribed thereto:

(a) Lease Date: April 30, 2015

(b) Landlord’s Address:

Iskalo 8600 Transit LLC

c/o Iskalo Development Corp.

Harbinger Square

5166 Main Street

Williamsville, New York 14221

with a copy at the same time to:

Hodgson Russ LLP

Guaranty Building

140 Pearl Street

Buffalo, New York 14203

Attention: Terrence M. Gilbride, Esq.

Tenant’s Address:

3960 Howard Hughes Parkway, Suite 500

Las Vegas, NV 89169

(d)

Premises: Suite 200 in the Building consisting of approximately 6,806 leasable square feet on the first floor, 9,530 leasable square feet on the second floor and

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999 leasable square feet on the third floor for a total of 17,335 leasable square feet of office space in the Building as shown on Exhibit A to this Lease.

(e)

Tenant’s Pro Rata Share: A percentage, based upon the ratio of the total leasable square footage of the Premises to the total leasable square footage of the Building. Tenant’s Pro Rata Share, based upon the current leasable square footage of the Building and the current leasable square footage of the Premises, is 93.064%, but may be increased or decreased by Landlord during the Term to take into account any changes in the leasable area of the Building occurring after the Commencement Date.

(f)

Term: One hundred twenty-six (126) months, beginning on the Commencement Date and expiring on the Expiration Date.

(g)

Commencement Date: May 1, 2015.

(h)

Expiration Date: October 31, 2025, unless adjusted or sooner terminated as provided herein.

(i) Security Deposit: None

(j) Base Rent: Throughout the Term, Base Rent shall be paid as follows:

Commencement Date through October 31, 2015: $ 0.00 monthly;

November 1, 2015 through April 30, 2016: $23,113.33 monthly;

May 1, 2016 through April 30, 2017: $23,806.73 monthly;

May 1, 2017 through April 30, 2018: $24,520.94 monthly;

May 1, 2018 through April 30, 2019: $25,256.56 monthly;

May 1, 2019 through April 30, 2020: $26,014.26 monthly;

May 1, 2020 through April 30, 2021: $26,794.69 monthly;

May 1, 2021 through April 30, 2022: $27,598.53 monthly;

May 1, 2022 through April 30, 2023: $28,426.48 monthly;

May 1, 2023 through April 30, 2024: $29,279.28 monthly;

May 1, 2024 through April 30, 2025: $30,157.66 monthly;

May 1, 2025 through October 31, 2025: $31,062.39 monthly.

(k) Broker: None

(l)

Estimated Monthly Additional Rent Charge (not including Tenant’s Pro Rata Share of Taxes and Premises Janitorial): $4,897.14

1.2 Additional Definitions. As used in this Lease, the following terms shall have the meanings ascribed thereto:

(a) Additional Rent: Any amounts that this Lease requires Tenant to pay in addition to Base Rent.

(b) Building: The building and related improvements (including, without limitation, parking lots, walkways, driveways, fences and landscaping) of which the Premises are a part.

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(c) Common Areas: The hallways, entryways, stairs, elevators, driveways, walkways, terraces, loading areas, restrooms, trash facilities, and all other areas and facilities in and about the Building that are provided and designated from time to time by Landlord for the general nonexclusive use and convenience of Tenant with Landlord and other tenants of the Building and their respective employees, invitees, licensees or visitors.

(d) Land: The land on which the Building is located, which is described on Exhibit B.

(e) Parking Areas: Those portions of the parking lots adjacent to the Building which Landlord shall from time to time designate for use by the tenants of the Building for parking.

(f) Prime Rate: The rate of interest from time to time announced by Manufacturers and Traders Trust Company as its prime rate of interest.

(g) Rent: The Base Rent and Additional Rent.

If any other provision of this Lease contradicts any definition of this Article, the other provision will prevail.

1.3 Exhibits. The following exhibits are attached to and made a part of this Lease:

EXHIBIT A -- The Premises

EXHIBIT B -- Legal Description of the Land

EXHIBIT C -- Work Letter

EXHIBIT D -- Commencement Date Certificate

EXHIBIT E -- Rules and Regulations

EXHIBIT F -- Furniture and Equipment

Article 2 AGREEMENT

2.1 Grant of Lease. Landlord leases the Premises to Tenant, and Tenant leases the Premises from Landlord, on the terms and conditions set forth in this Lease.

2.2 Right of First Offer - For long as the Lease is in full force and no Event of Default has occurred and is continuing beyond any notice and cure period, Tenant shall have a right of first offer to lease the adjacent 1,292 leasable square foot suite on the first floor in the Building should it become vacant and available. Landlord shall notify Tenant of the availability of said suite. Tenant shall then have the right for a period of ten (10) days from the delivery of such notice to elect such right. If Tenant fails to elect its right to lease such space within the ten (10) day period, Tenant’s right of first offer shall be considered null and void. If Tenant elects its right of first offer to lease such space, Landlord and Tenant shall within ten (10) days of such exercise, enter into a lease amendment with respect to such space on terms consistent with the remaining rental schedule in the Lease. The Lease Term for the right of first offer space shall be

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coterminous with the main Lease (or if less than thirty-six (36) months remain, the Lease Term shall be extended to a minimum of thirty-six (36) months from the date of occupancy of the right of first offer space on all space leased by Tenant).

Article 3 DeLIVERY OF PREMISES

3.1 Delivery of Possession.

(a) Landlord shall complete the Premises in accordance with the Work Letter attached hereto as Exhibit C. The construction shall be in a good and workmanlike manner and shall be in compliance with all applicable laws, ordinances, rules and regulations of any duly constituted governmental authority having jurisdiction thereof. Landlord represents and warrants that the Premises and all systems contained in or related to operation of the Premises, including, without limitation, the electrical, lighting, heating, ventilating and air conditioning systems shall be free of defects and in good working condition on the date of Delivery of Possession.

(b) “Delivery of Possession” shall occur on the Commencement Date.

(c) Tenant acknowledges that neither Landlord nor its agents or employees have made any representations or warranties as to the suitability or fitness of the Premises for the conduct of Tenant’s business or for any other purpose, nor has Landlord or its agents or employees agreed to undertake any alterations or construct any tenant improvements to the Premises except as expressly provided in this Lease. Tenant will execute the Commencement Date Certificate attached to this Lease as Exhibit D within fifteen (15) days of Landlord’s request.

(d) Promptly following the Lease Date, but in no event any later than five (5) days prior to the Commencement Date, Tenant shall make arrangements with the gas and electric utility providers for service at the Premises in Tenant's name and shall deliver to Landlord meter and account numbers evidencing the establishment of such gas and electric utility service. To the extent that Tenant shall fail to so establish such service, for each day such service is not so established, Tenant shall pay to Landlord as Additional Rent all gas and electric charges incurred by Landlord with respect to the Premises, plus an administrative charge equal to twenty percent (20%) of such charges.

(e) Any access to the Premises, the Building or the Common Areas by Tenant prior to Delivery of Possession, including any access to the Premises by Tenant’s contractors, agents and employees for purposes of equipping or otherwise preparing the Premises for Tenant’s use and operation, is subject to all of the terms and conditions of this Lease, excluding the obligation to pay Base Rent and Additional Rent pursuant to Article 6 or Taxes.

Article 4 BASE RENT

4.1 Payment of Base Rent. Throughout the Term, Tenant will pay Base Rent to Landlord in monthly installments, the first of which shall become due on the November 1, 2015 with successive installments to become due on the first day of each successive calendar month thereafter. Base Rent will be paid to Landlord, without written notice or demand, and without deduction or offset, in lawful money of the United States of America at Landlord’s Address, or to such other address as Landlord may from time to time designate in writing.

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4.2 Late Payment. In the event that Tenant fails to pay any installment of Rent or any reimbursement, Additional Rent, or any other payment hereunder as and when such payment is due, to help defray the additional cost to Landlord for processing such late payments, Tenant shall pay to Landlord on demand as Additional Rent, a late charge in an amount of $25 for each $500 of delinquency. The provision for such late charge shall be in addition to all of Landlord’s other rights hereunder, and shall not be construed as liquidated damages or as limiting Landlord’s remedies in any manner.

Article 5 REAL ESTATE AND ASSESSMENTS

5.1 Tenant’s Obligation to Pay Taxes. Tenant covenants and agrees that it shall pay to Landlord, as Additional Rent, Tenant’s Pro Rata Share of all real property taxes and assessments of whatever kind and nature, including water and sewer rents, special assessments and payments in lieu of taxes levied, imposed, assessed or fixed on or against the Building and the Land or arising from the use, occupancy or possession thereof, during the Term hereof (hereinafter collectively referred to as the “Taxes”). Tenant shall pay such Pro Rata Share within fifteen (15) days of Landlord’s invoice therefor. Notwithstanding the foregoing, Tenant’s obligation to pay its Pro Rata Share of all real property taxes and assessments as described herein shall be abated for the period commencing on the Commencement Date through October 31, 2015.

5.2 Contest by Landlord. Landlord shall have the right to contest in good faith any Tax or assessment and all costs and expenses, including, but not limited to, legal fees, incurred by Landlord in such contest shall be deemed to constitute additional charges for which Tenant shall pay its Pro Rata Share. Tenant shall pay any such sums, as Additional Rent, on the first day of the month following demand therefor. Provided that Tenant shall have paid its Pro Rata Share of all costs and expenses in accordance with the provisions of this Paragraph 5.2, Tenant shall be entitled to its Pro Rata Share of the net proceeds of any refund received by Landlord as a result of any such contest.

5.3 Contest by Tenant. In the event that Landlord shall fail to contest any Tax or assessment, Tenant shall have the right to contest such tax or assessment in good faith, at its own cost and expense, provided, however, that notwithstanding such contest, (1) Tenant shall pay when due its Pro Rata Share of any Taxes; (2) Tenant shall comply with all applicable laws, rules and regulations regarding the payment of Taxes; (3) Tenant shall not take any action which would adversely affect, threaten or jeopardize the interest of Landlord in the Building or the Land; and (4) Tenant shall promptly pay, indemnify and save Landlord harmless from, all penalties and interest which may be charged or imposed as a result of or during the pendency of, any such contest. In the event of any such contest by Tenant, Landlord agrees to reasonably cooperate with Tenant, provided, however, that such cooperation shall be without any cost or expense to Landlord and shall not be construed so as to require Landlord to withhold the payment of any Tax, interest or penalty otherwise due and owing to, or charged by, any taxing authority.

5.4 Adjustments for Partial Lease Years. It is further agreed that for the first and last lease years of the Term, the portion of all Taxes, other than such as result from assessments attributable to Tenant, to be paid by Tenant shall be prorated, depending on the proportion which each such lease year shall bear to the tax year in which it falls.

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5.5 Alternative Taxes. If at any time during the Term, a tax or excise on rents or other tax, however described, is levied or assessed by any municipality, county, state or country or any political subdivision thereof, against Landlord or the Rent, or any part thereof, as a substitute, in whole or in part, for any revenues derived from any Tax assessed or imposed by any such political entity on land and buildings, Tenant covenants to pay to Landlord, such sum as shall be necessary to pay and discharge such tax or excise on rents or other tax, which sum shall be paid to Landlord in the manner herein set forth for Taxes, provided, however, that the parties shall have the right to contest said levy in the same manner as provided herein for Taxes.

5.6 Other Taxes Imposed on Landlord. Except as otherwise provided herein, Tenant shall not be obligated or required hereunder to pay any franchise, excise, corporate, estate, inheritance, succession, capital levy or transfer tax of Landlord, or any income, profit or revenue tax upon the income or receipts of Landlord.

5.7 Taxes Attributable to Tenant. Tenant shall be responsible for and shall pay prior to the time when such payment shall be deemed delinquent, all Taxes assessed during the Term against any leasehold interest, or any improvements, alterations, additions, fixtures or personal property of any nature placed in, on or about the Premises by Tenant, whether such tax shall have been levied or assessed against Landlord or Tenant.

Article 6 ADDITIONAL RENT

6.1 In addition to all other rental charges provided for in this Lease, Tenant agrees to pay as Additional Rent:

(a) its Pro Rata Share of all insurance premium costs incurred by Landlord in connection with its obtaining and maintaining of fire, extended coverage and all risk insurance; rental insurance sufficient to include both Base Rent and Additional Rent; sprinkler damage insurance; and public liability insurance, all of which insurance coverages, if maintained, shall be in such amounts and with such companies as Landlord may deem reasonable or proper;

(b) its Pro Rata Share of all costs and expenses incurred by Landlord in connection with the management, operation, maintenance and repair of the Land and the Building during the Term; and

(c) One hundred percent (100%) of the cost of any janitorial or other service furnished exclusively to the Premises, except that Landlord, at its sole cost and expense, shall provide janitorial services to the Premises for the period commencing on the Commencement Date through May 31, 2015; and

(d) Fifteen percent (15%) of all the foregoing costs to cover Landlord’s administrative and overhead costs.

(e) Notwithstanding the foregoing, Tenant’s obligation to pay Additional Rent for those items described in Sections 6.1(a) and 6.1(b) shall be abated for the period commencing on the Commencement Date through October 31, 2015.

6.2 Estimated Payments. It is acknowledged that the total annual Additional Rent to be paid by Tenant pursuant to the provisions of this Lease cannot be determined except on an

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annual basis. It is therefore agreed that, in addition to the payments of Additional Rent as may be provided for elsewhere in this Lease, Tenant shall pay the estimated monthly sum set forth in Paragraph 1.1 on account of its Additional Rent obligations pursuant to the provisions of this Lease. Such estimated monthly sum shall not include Tenant’s Pro Rata Share of Taxes, which shall be paid by Tenant in accordance with Paragraph 5.1 of this Lease. Said estimated Additional Rental payments shall be paid in advance, on the first day of each month, and shall be based on an annual period from January 1 through December 31 during each year of the Term hereof, and shall be adjusted annually within ninety (90) days following the conclusion of each such annual period by written notice delivered by Landlord to Tenant. Said notice shall set forth the total amount of the costs and expenses incurred by Landlord for such annual period, the sum which represents the proportion to be paid by Tenant, the sum actually paid by Tenant for such period, and the amount of any required adjustment. Said notice shall also set forth the estimated monthly payment to be paid by Tenant for the following annual period.

6.3 Adjustment for Partial Years. For the first and last lease years of the Term hereof, the portion of Additional Rental to be paid by Tenant (other than for real estate taxes, which are covered by Article 5 hereof), shall be prorated depending on the proportion which each such lease year shall bear to the aforesaid annual period in which it falls.

Article 7 INDUSTRIAL DEVELOPMENT REVENUE BOND FINANCING

7.1 Tenant acknowledges that Landlord has transferred title to the Building to the Town of Amherst Industrial Development Agency (the “Agency”) and that the Building may be leased by the Agency to Landlord. Accordingly, upon such transfer and lease, this Lease will thereupon be deemed a sublease and the terms and conditions of this Lease shall be subject and subordinate to the terms and conditions of the lease agreement with the Agency.

Article 8 INSURANCE

8.1 Tenant’s Insurance. At all times during the Term, Tenant will carry and maintain, at Tenant’s expense, the following insurance, in the amounts specified below or such other amounts as Landlord may from time to time reasonably request, with insurance companies and on forms satisfactory to Landlord:

(a) Commercial general liability insurance with coverage for bodily injury and property damage liability, with a combined single occurrence limit of not less than $2,000,000. All such insurance shall include contractual liability coverage for the performance by Tenant of the indemnity agreements set forth in Article 24 of this Lease;

(b) Insurance covering all of Tenant’s furniture and fixtures, machinery, equipment, stock, and any other personal property owned and used in Tenant’s business and found in, on, or about the Building, and any leasehold improvements to the Premises in an amount not less than full replacement cost. Property forms shall provide coverage on a broad form basis insuring against “all risks of direct physical loss.” All policy proceeds will be used for the repair or replacement of the property damaged or destroyed; however, if this Lease ceases under the provisions of Article 21, Tenant will be entitled to any proceeds resulting from damage to Tenant’s furniture and fixtures, machinery, equipment, stock, and any other personal property;

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(c) Worker’s compensation insurance insuring against and satisfying Tenant’s obligations and liabilities under the worker’s compensation laws of the State of New York; and

(d) If Tenant operates owned, hired, or non-owned vehicles on or about the Building, comprehensive automobile liability at a limit of liability not less than $500,000 combined bodily injury and property damage.

8.2 Forms of Policies. Certificates of insurance, together with copies of the endorsements, when applicable, naming Landlord and Landlord’s manager as additional insureds, will be delivered to Landlord prior to Tenant’s occupancy of the Premises and from time to time at least ten (10) days prior to the expiration of the term of each such policy. All commercial general liability or comparable policies maintained by Tenant will name Landlord and Landlord’s manager as additional insureds, entitling Landlord and Landlord’s manager to recover under such policies for any loss sustained by Landlord, Landlord’s manager and their agents, and employees as a result of the acts or omissions of Tenant. All such policies maintained by Tenant will provide that they may not be terminated nor may coverage be reduced except after thirty (30) days’ prior written notice to Landlord and Landlord’s manager. All commercial general liability and property policies maintained by Tenant will be written as primary policies, not contributing with and not supplemental to the coverage that Landlord or Landlord’s Mortgagee may carry.

8.3 Waiver of Subrogation. Landlord and Tenant each waive any and all rights to recover against the other or against any other tenant or occupant of the Building, or against the officers, directors, shareholders, partners, joint venturers, employees, agents, customers, invitees or business visitors of such other party or of such other tenant or occupant of the Building, for any loss or damage to such waiving party arising from any cause covered by any property insurance required to be carried by such party pursuant to this Article 8 or any other property insurance actually carried by such party to the extent of the limits of such policy. Landlord and Tenant from time to time will cause their respective insurers to issue appropriate waiver of subrogation rights endorsements to all property insurance policies carried in connection with the Building or the Premises or the contents of the Building or the Premises. Tenant agrees to cause all other occupants of the Premises claiming by, under, or through Tenant to execute and deliver to Landlord such a waiver of claims and to obtain such waiver of subrogation rights endorsements.

8.4 Adequacy of Coverage. Landlord, its agents, and employees make no representation that the limits of liability specified to be carried by Tenant pursuant to this Article 8 are adequate to protect Tenant. If Tenant believes that any of such insurance coverage is inadequate, Tenant will obtain such additional insurance coverage as Tenant deems adequate, at Tenant’s sole expense.

Article 9 USE

9.1 Tenant’s Use of the Premises. The Premises will be used by Tenant solely as a corporate office for a venture capital and wealth management services organization, and for no other purpose. Tenant acknowledges and agrees that the Premises will not be used for the retail sale of any goods or services, or for any outdoor sales or storage. Tenant will use the Premises in a careful, safe, and proper manner. Tenant will not use or permit the Premises to be used or occupied for any purpose or in any manner prohibited by any applicable laws. Tenant will not

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commit waste or suffer or permit waste to be committed in, on, or about the Premises. Tenant will conduct its business and control its employees, agents, and invitees in such a manner as not to create any nuisance or interfere with, annoy, or disturb any other tenant or occupant of the Building or Landlord in its operation of the Building.

Article 10 REQUIREMENTS OF LAW; FIRE INSURANCE

10.1 General. At its sole cost and expense, Tenant will promptly comply with all laws, statutes, ordinances, and governmental rules, regulations, or requirements now in force or in force after the Lease Date, with the requirements of any board of fire underwriters or other similar body, with any direction or occupancy certificate issued pursuant to any law by any public officer or officers, as well as with the provisions of all recorded documents affecting the Premises, insofar as they relate to the condition, use, or occupancy of the Premises, excluding requirements of structural changes to the Premises or the Building, unless required by the unique nature of Tenant’s use or occupancy of the Premises.

10.2 Hazardous Materials.

(a) For purposes of this Lease, “Hazardous Materials” means any explosives, radioactive materials, hazardous wastes, or hazardous substances, including without limitation substances defined as “hazardous substances” in the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. §§ 9601-9657; the Hazardous Materials Transportation Act of 1975, 49 U.S.C. §§ 1801-1812; the Resource Conservation and Recovery Act of 1976, 42 U.S.C. §§ 6901-6987; or any other federal, state, or local statute, law, ordinance, code, rule, regulation, order, or decree regulating, relating to, or imposing liability or standards of conduct concerning hazardous materials, waste, or substances now or at any time hereafter in effect (collectively, “Hazardous Materials Laws”).

(b) Tenant will not cause or permit the storage, use, generation, or disposition of any Hazardous Materials in, on, or about the Premises or the Building by Tenant, its agents, employees, or contractors. Tenant will not permit the Premises to be used or operated in a manner that may cause the Premises or the Building to be contaminated by any Hazardous Materials in violation of any Hazardous Materials Laws. Tenant will immediately advise Landlord in writing of (i) any and all enforcement, cleanup, remedial, removal, or other governmental or regulatory actions instituted, completed, or threatened pursuant to any Hazardous Materials Laws relating to any Hazardous Materials affecting the Premises; and (ii) all claims made or threatened by any third party against Tenant, Landlord, or the Premises relating to damage, contribution, cost recovery, compensation, loss, or injury resulting from any Hazardous Materials on or about the Premises. Without Landlord’s prior written consent, Tenant will not take any remedial action or enter into any agreements or settlements in response to the presence of any Hazardous Materials in, on, or about the Premises.

(c) Tenant will be solely responsible for and will defend, indemnify and hold Landlord, its agents, and employees harmless from and against all claims, costs, and liabilities, including attorneys’ fees and costs, arising out of or in connection with Tenant’s breach of its obligations in this Article 10. Tenant will be solely responsible for and will defend, indemnify, and hold Landlord, its agents, and employees harmless from and against any and all claims, costs, and liabilities, including attorneys’ fees and costs, arising out of or in connection with the removal, cleanup, and restoration work and materials necessary to return the Premises and any

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other property of whatever nature located on the Building to their condition existing prior to the appearance of Tenant’s Hazardous Materials on the Premises. Tenant’s obligations under this Article 10 will survive the expiration or other termination of this Lease.

10.3 Certain Insurance Risks. Tenant will not do or permit to be done any act or thing upon the Premises or the Building which would (a) jeopardize or be in conflict with fire insurance policies covering the Building or fixtures and property in the Building; (b) increase the rate of fire insurance applicable to the Building to an amount higher than it otherwise would be for use of the Building as an office; or (c) subject Landlord to any liability or responsibility for injury to any person or persons or to property by reason of any business or operation being carried on upon the Premises.

Article 11 ASSIGNMENT AND SUBLETTING

11.1 General. Tenant, for itself, its heirs, distributees, executors, administrators, legal representatives, successors, and assigns, covenants that it will not assign, mortgage, or encumber this Lease, nor sublease, nor permit the Premises or any part of the Premises to be used or occupied by others, without the prior written consent of Landlord in each instance, which consent will not be unreasonably withheld or delayed. Any assignment or sublease in violation of this Article 11 will be void. If this Lease is assigned, or if the Premises or any part of the Premises are subleased or occupied by anyone other than Tenant, Landlord may, after default by Tenant, collect rent from the assignee, subtenant, or occupant, and apply the net amount collected to Rent. No assignment, sublease, occupancy, or collection will be deemed (a) a waiver of the provisions of this Section 11.1; (b) the acceptance of the assignee, subtenant, or occupant as Tenant; or (c) a release of Tenant from the further performance by Tenant of covenants on the part of Tenant contained in this Lease. The consent by Landlord to an assignment or sublease will not be construed to relieve Tenant from obtaining Landlord’s prior written consent in writing to any further assignment or sublease. No permitted subtenant may assign or encumber its sublease or further sublease all or any portion of its subleased space, or otherwise permit the subleased space or any part of its subleased space to be used or occupied by others, without Landlord’s prior written consent in each instance.

11.2 Submission of Information. If Tenant requests Landlord’s consent to a specific assignment or subletting, Tenant will submit in writing to Landlord (a) the name and address of the proposed assignee or subtenant; (b) the business terms of the proposed assignment or sublease; (c) reasonably satisfactory information as to the nature and character of the business of the proposed assignee or subtenant, and as to the nature of its proposed use of the space; (d) banking, financial, or other credit information reasonably sufficient to enable Landlord to determine the financial responsibility and character of the proposed assignee or subtenant; and (e) the proposed form of assignment or sublease for Landlord’s reasonable approval.

11.3 Payments to Landlord. If Landlord consents to a proposed assignment or sublease, then Landlord will have the right to require Tenant to pay to Landlord a sum equal to (a) any rent or other consideration paid to Tenant by any proposed transferee that is in excess of the Rent allocable to the transferred space then being paid by Tenant to Landlord pursuant to this Lease; (b) any other profit or gain realized by Tenant from any such sublease or assignment; and (c) Landlord’s reasonable attorneys’ fees and costs incurred in connection with negotiation, review, and processing of the transfer. All such sums payable will be payable to Landlord at the time the next payment of Additional Rent is due.

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11.4 Landlord’s Right of Recapture. Landlord may, within thirty (30) days after submission of Tenant's written request for Landlord's consent to a proposed assignment of this Lease, cancel this Lease (or, as to a subletting, cancel as to the portion of the Premises proposed to be sublet) as of the date the proposed subletting or assignment was to be effective. If Landlord cancels this Lease as to any portion of the Premises, then this Lease shall cease for such portion of the Premises and Tenant shall pay to Landlord all Rent accrued through the cancellation date relating to the portion of the Premises covered by the proposed subletting or assignment. Thereafter, Landlord may lease such portion of the Premises to the prospective transferee (or to any other person) without liability to Tenant.

11.5 Prohibited Transfers. The transfer of a majority of the issued and outstanding capital stock of any corporate Tenant or subtenant of this Lease, or a majority of the total interest in any partnership Tenant or subtenant, however accomplished, and whether in a single transaction or in a series of related or unrelated transactions, will be deemed an assignment of this Lease or of such sublease requiring Landlord’s consent in each instance.

11.6 Permitted Transfer. No Landlord consent shall be necessary in the case of an assignment of this Lease or sublease of all or part of the Premises to a wholly-owned subsidiary of Tenant or the parent of Tenant or to any corporation into or with which Tenant may be merged or consolidated; provided that Tenant promptly provides Landlord with a fully executed copy of such assignment or sublease, Tenant shall remain liable under the terms of this Lease, and the resulting or surviving entity has a net worth at the time of such assignment, equal to or in excess of Tenant’s.

11.7 Remedies. If Tenant believes that Landlord has unreasonably withheld its consent pursuant to this Article 11, Tenant’s sole remedy will be to seek a declaratory judgment that Landlord has unreasonably withheld its consent or an order of specific performance or mandatory injunction of Landlord’s agreement to give its consent.

11.8 Individual Office/Desk Leases. Subject to the provisions of this Section 11.8, without the consent of Landlord, Tenant may from time to time, permit portions of the Premises to be used or occupied by 1099 employees or independent contractors working in cooperation with Tenant (hereinafter “Desk/Space User”), provided that (i) any such use or occupancy of desk or office space shall be without modification to the Premises, (ii) each Desk Space User shall use the Premises for the uses permitted hereunder and for no other purpose, (iii) such “desk space use” arrangement shall terminate automatically upon the expiration or earlier termination of this Lease, and (iv) such “desk space use” arrangement is for a valid business purpose and not to circumvent the provisions of this Article 11. As used herein the term “Desk Space User” shall mean any person who is an employee, officer, director, or otherwise affiliated with any organization or entity actively engaged in venture capital and/or wealth management. At Landlord’s request, from time to time, Tenant shall provide Landlord with a list setting forth the name of each then existing Desk Space User. Any such use of the Premises by Desk Space User(s) shall not relieve Tenant of its obligations under this Lease. Tenant shall indemnify Landlord against any and all loss, cost, damage, liability and expense of any nature (including, without limitation, reasonable attorneys’ fees and disbursements) arising from, relating to or in connection with the use of the Premises (or any actions or omissions) by any Desk Space User.

Article 12

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RULES AND REGULATIONS

12.1 Landlord’s Rules and Regulations. Tenant and its employees, agents, licensees and visitors will at all times observe faithfully, and comply strictly with, the rules and regulations set forth in Exhibit E. Landlord may from time to time reasonably amend, delete, or modify existing rules and regulations, or adopt new rules and regulations for the use, safety, cleanliness, and care of the Premises and the Building, and the comfort, quiet, and convenience of occupants of the Building. Modifications or additions to the rules and regulations will be effective upon 30 days’ prior written notice to Tenant from Landlord. In the event of any breach of any rules or regulations or any amendments or additions to such rules and regulations, Landlord will have all remedies that this Lease provides for default by Tenant, and will in addition have any remedies available at law or in equity, including the right to enjoin any breach of such rules and regulations. Landlord will not be liable to Tenant for violation of such rules and regulations by any other tenant, its employees, agents, visitors, or licensees or any other person. In the event of any conflict between the provisions of this Lease and the rules and regulations, the provisions of this Lease will govern.

Article 13 COMMON AREAS

13.1 Tenant’s Use of the Common Areas. Landlord grants Tenant, its employees, invitees, licensees, and other visitors a nonexclusive license for the Term to use the Common Areas with others, subject to the terms and conditions of this Lease. Without advance written notice to Tenant, except with respect to matters covered by subsection (a) below, and without any liability to Tenant in any respect, provided Landlord will take no action permitted under this Article 13 in such a manner as to materially impair or adversely affect Tenant’s substantial benefit and enjoyment of the Premises, Landlord will have the right to:

(a) Close off any of the Common Areas to whatever extent required in the opinion of Landlord and its counsel to prevent a dedication of any of the Common Areas or the accrual of any rights by any person or the public to the Common Areas;

(b) Temporarily close any of the Common Areas for maintenance, alteration, or improvement purposes; and

(c) Change the size, use, shape, or nature of any such Common Areas, including erecting additional buildings on the Common Areas, expanding the Building or other buildings to cover a portion of the Common Areas, converting Common Areas to a portion of the Building or other buildings, or converting any portion of the Building (excluding the Premises) or other buildings to Common Areas. Upon erection of any additional buildings or change in Common Areas, the portion of the Building upon which buildings or structures have been erected will no longer be deemed to be a part of the Common Areas.

Article 14 LANDLORD’S REPAIR AND MAINTENANCE

14.1 Landlord’s Repair of Building and Common Areas. Landlord shall maintain and shall keep in good order, condition and repair, the Building and Common Areas consistent with the level of care for similar buildings in the locality of the Building, excluding, however, all windows, doors, plate glass, signs and all repairs required by any casualty. For the purpose of this Lease, a structural repair shall be defined as any structural repair to the steel frame, footings,

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foundations, masonry walls, and roof of the Building. Except as hereinafter provided, Tenant shall pay its Pro Rata Share of the cost of any such repairs in accordance with Article 6 of this Lease. To the extent that any repairs, whether structural or otherwise, result from damage caused by any act, omission or negligence of Tenant, any subtenant, Desk Space User or concessionaire, or their respective employees, agents, invitees, licensees or contractors, such repairs shall be performed by Landlord at the sole cost and expense of Tenant, which expenses (including 15% of such expense for Landlord’s overhead) shall constitute Additional Rent.

14.2 Limitation on Liability. Landlord will not be in default under this Lease or be liable to Tenant or any other person for direct or consequential damage, or otherwise, for any failure to supply any heat, air conditioning, cleaning, lighting, security; for surges or interruptions of electricity; or for other services Landlord has agreed to supply during any period when Landlord uses reasonable diligence to supply such services. Landlord will use reasonable efforts to diligently remedy any interruption in the furnishing of such services. Landlord reserves the right temporarily to discontinue such services at such times as may be necessary by reason of accident; repairs, alterations or improvements; strikes; lockouts; riots; acts of God; governmental preemption in connection with a national or local emergency; any rule, order, or regulation of any governmental agency; conditions of supply and demand that make any product unavailable; Landlord’s compliance with any mandatory governmental energy conservation or environmental protection program, or any voluntary governmental energy conservation program at the request of or with consent or acquiescence of Tenant; or any other happening beyond the control of Landlord. Landlord will not be liable to Tenant or any other person or entity for direct or consequential damages resulting from the admission to or exclusion from the Building of any person. In the event of invasion, mob, riot, public excitement, strikes, lockouts, or other circumstances rendering such action advisable in Landlord’s sole opinion, Landlord will have the right to prevent access to the Building during the continuance of the same by such means as Landlord, in its sole discretion, may deem appropriate, including without limitation locking doors and closing Parking Areas and other Common Areas. Landlord will not be liable for damages to person or property or for injury to, or interruption of, business for any discontinuance permitted under this Article 14, nor will such discontinuance in any way be construed as an eviction of Tenant or cause an abatement of Rent or operate to release Tenant from any of Tenant’s obligations under this Lease.

Article 15 TENANT’S CARE OF THE PREMISES

15.1 Care of the Premises.

(a) Tenant shall take good care of the Premises and shall not permit the Premises to be used in any manner as to cause excessive depreciation of or to the Building, nor permit waste of or damage or nuisance to, in, or about the Premises or the Building. Tenant shall not cause nor permit any dirt, debris or rubbish to be put, placed or maintained in the Common Areas. Tenant further agrees that it shall promptly notify Landlord or Landlord’s Manager of any repair that may be required to the Premises, the Building or the Common Areas.

(b) Tenant shall have no right of access to the roof of the Premises or the Building and shall not install, repair, place or replace any aerial, fan, air conditioner or other device on the roof of the Premises or the Building without the prior written consent of Landlord. Any aerial, fan, air conditioner or device installed without such written consent shall be subject to removal, at Tenant’s expense, without notice at any time. Landlord shall repair at Tenant’s expense, any

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damage to the Building or roof resulting from the installation, repair, use, or replacement of any such air conditioner or other device.

Article 16 ALTERATIONS

16.1 General.

(a) During the Term, Tenant will not make or allow to be made any alterations, additions, or improvements to or of the Premises or any part of the Premises, or attach any fixtures or equipment to the Premises, without first obtaining Landlord’s written consent, which consent will not be unreasonably withheld. Unless otherwise arranged by Landlord and Tenant, all such alterations, additions, and improvements consented to by Landlord, and capital improvements that are required to be made to the Building as a result of the nature of Tenant’s use of the Premises will be made by Landlord for Tenant’s account, and Tenant will reimburse Landlord for its cost (including 15% for Landlord’s overhead) within ten (10) days after receipt of a statement of such cost.

(b) Subject to Tenant’s rights in Article 19, all alterations, additions, fixtures, and improvements, whether temporary or permanent in character, made in or upon the Premises either by Tenant or Landlord, will immediately become Landlord’s property and at the end of the Term will remain on the Premises without compensation to Tenant, unless when consenting to such alterations, additions, fixtures, or improvements, Landlord has advised Tenant in writing that such alterations, additions, fixtures, or improvements must be removed at the expiration or other termination of this Lease.

16.2 Removal. If Landlord has required Tenant to remove any or all alterations, additions, fixtures, and improvements that are made in or upon the Premises pursuant to this Article 16, Tenant will remove such alterations, additions, fixtures, and improvements at Tenant’s sole cost and will restore the Premises to the condition in which they were before such alterations, additions, fixtures, improvements, and additions were made, reasonable wear and tear excepted.

Article 17 UTILITY SERVICE

17.1 Utility Service for Premises. Tenant agrees to pay as and when the same become due and payable, all charges for electricity, gas, heat, steam, hot water, telephone and other utilities supplied to the Premises during the Term, together with cost of repair, maintenance, replacement and reading of all meters measuring Tenant’s use or consumption thereof. If any such services are separately metered or billed to Tenant, Tenant shall pay all charges for such services directly. If, however, any such services are not separately metered or billed to Tenant but rather are billed to and paid by Landlord, Tenant will pay to Landlord its proportionate share of the cost of such services (as determined by Landlord) as Additional Rent. In the event that Tenant shall fail to pay any charges for any or all of the aforesaid services when due, Landlord shall have the right, but not the obligation to make such payments, in which event, a sum equal to any such payments (plus 20% for Landlord’s overhead) shall be considered Additional Rent, and shall be collectible as such, together with interest at an annual rate equal to five (5%) percent above the Prime Rate, from the date of payment by Landlord. In no event shall Landlord be responsible or liable for the failure to supply Tenant or for the failure of Tenant to receive, any utility service, nor shall Tenant be entitled to any cessation, abatement, reduction or other offset

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of Rent in the event of any failure to receive any utility service. Notwithstanding the foregoing, Tenant’s obligation to pay utility charges for those items described in this Section 17.1 shall be abated for a period commencing on the Commencement Date through June 30, 2015.

Article 18 MECHANICS’ LIENS

18.1 Removal of Liens. Tenant will pay or cause to be paid all costs and charges for work (a) done by Tenant or caused to be done by Tenant, in or to the Premises, and (b) for all materials furnished for or in connection with such work. Tenant will indemnify Landlord against and hold Landlord, the Premises, and the Building free, clear, and harmless of and from all mechanics’ liens and claims of liens, and all other liabilities, liens, claims, and demands on account of such work by or on behalf of Tenant, other than work performed by Landlord pursuant to the Work Letter attached hereto as Exhibit C. If any such lien, at any time, is filed against the Premises or any part of the Building, Tenant will cause such lien to be discharged of record within ten (10) days after the filing of such lien, except that if Tenant desires to contest such lien, it will furnish Landlord, within such ten (10) day period, security reasonably satisfactory to Landlord of at least 150% of the amount of the claim, plus estimated costs and interest, or comply with such statutory procedures as may be available to release the lien. If a final judgment establishing the validity or existence of a lien for any amount is entered, Tenant will pay and satisfy the same at once. If Tenant fails to pay any charge for which a mechanics’ lien has been filed, and has not given Landlord security as described above, or has not complied with such statutory procedures as may be available to release the lien, Landlord may, at its option, pay such charge and related costs and interest, and the amount so paid, together with reasonable attorneys’ fees incurred in connection with such lien, will be immediately due from Tenant to Landlord as Additional Rent. Nothing contained in this Lease will be deemed the consent or agreement of Landlord to subject Landlord’s interest in the Building to liability under any mechanics’ or other lien law. If Tenant receives written notice that a lien has been or is about to be filed against the Premises or the Building, or that any action affecting title to the Building has been commenced on account of work done by or for or materials furnished to or for Tenant, it will immediately give Landlord written notice of such notice. At least fifteen (15) days prior to the commencement of any work (including but not limited to any maintenance, repairs, alterations, additions, improvements, or installations) in or to the Premises, by or for Tenant, Tenant will give Landlord written notice of the proposed work and the names and addresses of the persons supplying labor and materials for the proposed work. Landlord will have the right to post notices of non-responsibility or similar written notices on the Premises in order to protect the Premises against any such liens.

Article 19 END OF TERM

19.1 End of Term. At the end of this Lease, Tenant will promptly quit and surrender the Premises broom-clean, in good order and repair, ordinary wear and tear excepted. If Tenant is not then in default, Tenant may remove from the Premises any trade fixtures, equipment, and movable furniture placed in the Premises by Tenant, whether or not such trade fixtures or equipment are fastened to the Building. Tenant will not remove any trade fixtures or equipment without Landlord’s prior written consent if such fixtures or equipment are used in the operation of the Building, or if the removal of such fixtures or equipment will result in impairing the structural strength of the Building. Whether or not Tenant is in default, Tenant will remove such alterations, additions, improvements, trade fixtures, equipment, and furniture as Landlord has requested in accordance with Article 16. Tenant will fully repair any damage occasioned by the

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removal of any trade fixtures, equipment, furniture, alterations, additions, and improvements. All trade fixtures, equipment, furniture, inventory, effects, alterations, additions, and improvements on the Premises after the end of the Term will be deemed conclusively to have been abandoned and may be appropriated, sold, stored, destroyed, or otherwise disposed of by Landlord without written notice to Tenant or any other person and without obligation to account for them. Tenant will pay Landlord for all expenses incurred in connection with the removal of such property, including but not limited to the cost of repairing any damage to the Building or Premises caused by the removal of such property. Tenant’s obligation to observe and perform this covenant will survive the expiration or other termination of this Lease.

Article 20 EMINENT DOMAIN

20.1 Condemnation of Premises. If all of the Premises are taken by exercise of the power of eminent domain (or conveyed by Landlord in lieu of such exercise) this Lease will terminate on a date (the “Termination Date”) which is the earlier of the date upon which the condemning authority takes possession of the Premises or the date on which title to the Premises is vested in the condemning authority. If condemnation results in any material impairment to the Premises, that cannot be mitigated or corrected by Landlord (i.e. through reconfiguration of the Premises or Tenant’s layout of the Premises), Tenant will have the right to cancel this Lease by written notice to Landlord given within 20 days after the Termination Date. If the condemnation does not result in a material impairment of the Premises is so taken, or if the Tenant does not cancel this Lease according to the preceding sentence, the Base Rent will be abated in the proportion of the rentable area of the Premises so taken to the rentable area of the Premises immediately before such taking, and Tenant’s Pro Rata Share will be appropriately recalculated. If 25% or more of the Building is so taken, Landlord may cancel this Lease by written notice to Tenant given within 30 days after the Termination Date. In the event of any such taking, the entire award will be paid to Landlord and Tenant will have no right or claim to any part of such award; however, Tenant will have the right to assert a claim against the condemning authority in a separate action, so long as Landlord’s award is not otherwise reduced, for Tenant’s moving expenses and leasehold improvements.

Article 21 DAMAGE AND DESTRUCTION

21.1 Notice of Casualty. If the Premises or the Building are damaged by fire or other insured casualty, Landlord will give Tenant written notice of the time which will be needed to repair such damage, as determined by Landlord in its reasonable discretion, and the election (if any) which Landlord has made according to this Article 21. Such notice will be given before the 30th day (the “Notice Date”) after the fire or other insured casualty.

21.2 Minor Damage. If the Premises or the Building are damaged by fire or other insured casualty to an extent which may be repaired within one hundred twenty (120) days after the Notice Date, as reasonably determined by Landlord, Landlord will promptly begin to repair the damage after the Notice Date and will diligently pursue the completion of such repair. In that event this Lease will continue in full force and effect except that Base Rent will be abated on a pro rata basis from the date of the damage until the date of the completion of such repairs (the “Repair Period”) based on the proportion of the rentable area of the Premises Tenant is unable to use during the Repair Period.

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21.3 Major Damage. If the Premises or the Building are damaged by fire or other insured casualty to an extent that may not be repaired within one hundred twenty (120) days after the Notice Date, as reasonably determined by Landlord, then (a) Landlord may cancel this Lease as of the date of such damage by written notice given to Tenant on or before the Notice Date or (b) Tenant may cancel this Lease as of the date of such damage by written notice given to Landlord within ten (10) days after Landlord’s delivery of a written notice that the repairs cannot be made within such one hundred twenty (120) day period. If neither Landlord nor Tenant so elects to cancel this Lease, Landlord will diligently proceed to repair the Building and Premises and Base Rent will be abated on a pro rata basis during the Repair Period based on the proportion of the rentable area of the Premises Tenant is unable to use during the Repair Period.

21.4 Uninsured/Underinsured Casualty. Notwithstanding the provisions of Paragraphs 21.1, 21.2 and 21.3 above, if the Premises or the Building are damaged by uninsured casualty, or if the proceeds of insurance are insufficient to pay for the repair of any damage to the Premises or the Building, Landlord will have the option to repair such damage or cancel this Lease as of the date of such casualty by written notice to Tenant on or before the Notice Date.

21.5 Tenant Caused Casualty. If any such damage by fire or other casualty is the result of the willful conduct, negligence or failure to act of Tenant, its agents, contractors, employees, or invitees, there will be no abatement of Base Rent as otherwise provided for in this Article 21. Tenant will have no right to terminate this Lease on account of any damage to the Premises, or the Building, except as set forth in this Lease.

Article 22 SUBORDINATION

22.1 General. This Lease and Tenant’s rights under this Lease are subject and subordinate to any mortgage, together with any renewals, extensions, modifications, consolidations, and replacements of such mortgage (a “Superior Lien”), now or after the date affecting or placed, charged, or enforced against the Land, the Building, or all or any portion of the Building or any interest of Landlord in them or Landlord’s interest in this Lease and the leasehold estate created by this Lease (except to the extent any such instrument expressly provides that this Lease is superior to such instrument). This provision will be self-operative and no further instrument of subordination will be required in order to effect it. Notwithstanding the foregoing, Tenant will execute, acknowledge, and deliver to Landlord, within twenty (20) days after written demand by Landlord, such documents as may be reasonably requested by Landlord or the holder of any Superior Lien to confirm or effect any such subordination.

22.2 Attornment. Tenant agrees that in the event that any holder of a Superior Lien succeeds to Landlord’s interest in the Premises, Tenant will pay to such holder all Rents subsequently payable under this Lease. Further, Tenant agrees that in the event of the enforcement by the holder of a Superior Lien of the remedies provided for by law or by such Superior Lien, Tenant will, upon request of any person or party succeeding to the interest of Landlord as a result of such enforcement, automatically become the tenant of and attorn to such successor in interest without change in the terms or provisions of this Lease. Such successor in interest will not be bound by:

(a) Any payment of Rent for more than one month in advance;

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(b) Any amendment or modification of this Lease made without the written consent of such successor in interest;

(c) Any claim against Landlord arising prior to the date on which such successor in interest succeeded to Landlord’s interest; or

(d) Any claim or offset of Rent against Landlord.

Upon request by such successor in interest and without cost to Landlord or such successor in interest, Tenant will, within twenty (20) days after written demand, execute, acknowledge, and deliver an instrument or instruments confirming the attornment, so long as such instrument provides that such successor in interest will not disturb Tenant in its use of the Premises in accordance with this Lease.

Article 23 ENTRY BY LANDLORD

23.1 Landlord’s Right of Entry. Landlord, its agents, employees, and contractors may enter the Premises at any time in response to an emergency and at reasonable hours to (a) inspect the Premises; (b) exhibit the Premises to prospective purchasers, lenders or tenants; (c) determine whether Tenant is complying with all its obligations in this Lease; (d) supply services to be provided by Landlord to Tenant according to this Lease; (e) post written notices of non-responsibility or similar notices; or (f) make repairs required of Landlord under the terms of this Lease or make repairs to any adjoining space or utility services or make repairs, alterations, or improvements to any other portion of the Building; however, all such work will be done as promptly as reasonably possible and so as to cause as little interference to Tenant as reasonably possible.

Tenant, by this Article 23, waives any claim against Landlord, its agents, employees, or contractors for damages for any injury or inconvenience to or interference with Tenant’s business, any loss of occupancy or quiet enjoyment of the Premises, or any other loss occasioned by any entry in accordance with this Article 23. Landlord will, at all times, have and retain a key with which to unlock all of the doors in, on or about the Premises. Landlord will have the right to use any and all means it may deem proper to open doors in and to the Premises in an emergency in order to obtain entry to the Premises. Any entry to the Premises by Landlord in accordance with this Article 23 will not be construed or deemed to be a forcible or unlawful entry into or a detainer of the Premises or an eviction, actual or constructive, of Tenant from the Premises or any portion of the Premises, nor will any such entry entitle Tenant to damages or an abatement of Base Rent, Additional Rent, or other charges that this Lease requires Tenant to pay.

Article 24 INDEMNIFICATION, WAIVER, AND RELEASE

24.1 Indemnification. Except for any injury or damage to persons or property on the Premises that is proximately caused by or results proximately from the negligence or deliberate act of Landlord, its employees, or agents, and subject to the provisions of Section 8.3, Tenant will neither hold nor attempt to hold Landlord, its employees, or agents liable for, and Tenant will indemnify and hold harmless Landlord, its employees, and agents from and against, any and all losses, demands, claims, causes of action, fines, penalties, damages (including consequential damages), liabilities, judgments, and expenses (including without limitation attorneys’ fees and disbursements) incurred in connection with or arising from:

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(a) the use or occupancy or manner of use or occupancy of the Premises by Tenant or any person claiming under Tenant;

(b) any activity, work, or thing done or permitted by Tenant in or about the Premises or the Building;

(d) any injury or damage to the person, property, or business of Tenant, its employees, agents, contractors, or invitees entering upon the Premises under the express or implied invitation of Tenant.

If any action or proceeding is brought against Landlord, its employees, or agents by reason of any such claim for which Tenant has indemnified Landlord, Tenant, upon written notice from Landlord, will defend the same at Tenant’s expense, with counsel reasonably satisfactory to Landlord.

24.2 Waiver and Release. Tenant, as a material part of the consideration to Landlord for this Lease, by this Section 24.2 waives and releases all claims against Landlord, its employees, and agents with respect to all matters for which Landlord has disclaimed liability pursuant to the provisions of this Lease.

Article 25 SECURITY DEPOSIT

25.1 Security for Performance by Tenant. Tenant, simultaneously herewith, has deposited with Landlord the sum set forth in Section 1.1 to be held by Landlord as security for the faithful performance by Tenant of all of the terms, covenants, provisions and conditions of this Lease to be performed by Tenant. In the event Tenant defaults with respect to any of the terms, covenants, provisions or conditions of this Lease, including, but not limited to, the payment of Rent, then without notice to Tenant, and in addition to any other remedies to which Landlord may be entitled by virtue of the provisions of this Lease, or pursuant to law or equity, Landlord shall have the right to use, apply or retain the whole or any part of the security so deposited to the extent required for the payment of any Rent or any other sum as to which Tenant is in default or any sum which Landlord may expend or may be required to expend by reason of Tenant’s default, including, but not limited to, damages or deficiencies resulting from the reletting of the Premises, whether such damages or deficiencies accrued before or after summary proceedings or other reentry by Landlord. If any portion of the Security Deposit is so used, applied, or retained, Tenant will within 5 days after written demand deposit cash with Landlord in an amount sufficient to restore the Security Deposit to its original amount. Landlord will not be required to keep the Security Deposit separate from its general funds, and Tenant will not be entitled to interest on the Security Deposit. The Security Deposit will not be deemed a limitation on Landlord’s damages or a payment of liquidated damages or a payment of the Base Rent due for the last month of the Term. If Tenant fully, faithfully, and timely performs every provision of this Lease to be performed by it, the Security Deposit or any balance of the Security Deposit will be returned to Tenant within 60 days after the expiration of the Term. Landlord may deliver the funds deposited under this Lease by Tenant to the purchaser of the Building in the event the Building is sold, and after such time Landlord will have no further liability to Tenant with respect to the Security Deposit.

Article 26

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QUIET ENJOYMENT

26.1 Covenant of Quiet Enjoyment. Landlord covenants and agrees with Tenant that so long as Tenant pays the Rent and observes and performs all the terms, covenants, and conditions of this Lease on Tenant’s part to be observed and performed, Tenant may peaceably and quietly enjoy the Premises subject, nevertheless, to the terms and conditions of this Lease, and Tenant’s possession will not be disturbed by anyone claiming by, through, or under Landlord.

Article 27 EFFECT OF SALE

27.1 Sale of the Building. A sale, conveyance, or assignment of the Building will operate to release Landlord from liability from and after the effective date of such sale, conveyance, or assignment upon all of the covenants, terms, and conditions of this Lease, express or implied, except those liabilities that arose prior to such effective date, and, after the effective date of such sale, conveyance, or assignment, Tenant will look solely to Landlord’s successor in interest in and to this Lease. This Lease will not be affected by any such sale, conveyance, or assignment, and Tenant will attorn to Landlord’s successor in interest to this Lease, so long as such successor in interest assumes Landlord’s obligations under the Lease from and after such effective date.

Article 28 DEFAULT

28.1 Events of Default. The following events are referred to, collectively, as “Events of Default” or, individually, as an “Event of Default”:

(a) Tenant defaults in the due and punctual payment of Rent, and such default continues for five (5) days after written notice from Landlord; however, Tenant will not be entitled to more than 1 written notice for monetary defaults during any twelve (12) month period, and if after such written notice any Rent is not paid when due, an Event of Default will be considered to have occurred without further notice;

(b) Tenant fails to take possession of the Premises on the Commencement Date or later vacates or abandons the Premises without Notice to Landlord;

(c) This Lease or the Premises or any part of the Premises are taken upon execution or by other process of law directed against Tenant, or are taken upon or subject to any attachment by any creditor of Tenant or claimant against Tenant, and said attachment is not discharged or disposed of within fifteen (15) days after its levy;

(d) Tenant files a petition in bankruptcy or insolvency or for reorganization or arrangement under the bankruptcy laws of the United States or under any insolvency act of any state, or admits the material allegations of any such petition by answer or otherwise, or is dissolved or makes an assignment for the benefit of creditors;

(e) Involuntary proceedings under any such bankruptcy law or insolvency act or for the dissolution of Tenant are instituted against Tenant, or a receiver or trustee is appointed for all or substantially all of the property of Tenant, and such proceeding is not dismissed or such

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receivership or trusteeship vacated within sixty (60) days after such institution or appointment; or

(f) Tenant breaches any of the other agreements, terms, covenants, or conditions that this Lease requires Tenant to perform, and such breach continues for a period of thirty (30) days after written notice from Landlord to Tenant or, if such breach cannot be cured reasonably within such thirty (30) day period, if Tenant fails to diligently commence to cure such breach within thirty (30) days after written notice from Landlord and to complete such cure within a reasonable time thereafter.

28.2 Landlord’s Remedies. If any one or more Events of Default set forth in Section 28.1 occurs then Landlord has the right, at its election:

(a) To give Tenant ten (10) days’ written notice of the expiration of the Term and upon the giving of such notice and the expiration of such ten (10) day period, Tenant’s right to possession of the Premises will cease and this Lease will be terminated, except as to Tenant’s liability, as if the expiration of the term fixed in such notice were the end of the Term;

(b) Without further demand or notice, to reenter and take possession of the Premises or any part of the Premises, repossess the same, expel Tenant and those claiming through or under Tenant, and remove the effects of both or either, using such force for such purposes as may be necessary, without being liable for prosecution, without being deemed guilty of any manner of trespass, and without prejudice to any remedies for arrears of Rent or other amounts payable under this Lease or as a result of any preceding breach of covenants or conditions; or

(c) Without further demand or notice to cure any Event of Default and to charge Tenant for the cost of effecting such cure, including without limitation reasonable attorneys’ fees and interest on the amount so advanced at the rate set forth in Section 30.21, provided that Landlord will have no obligation to cure any such Event of Default of Tenant.

Should Landlord elect to reenter as provided in subsection (b), or should Landlord take possession pursuant to legal proceedings or pursuant to any notice provided by law, Landlord may, from time to time, without terminating this Lease, relet the Premises or any part of the Premises in Landlord’s or Tenant’s name, but for the account of Tenant, for such term or terms (which may be greater or less than the period which would otherwise have constituted the balance of the Term) and on such conditions and upon such other terms (which may include concessions of free rent and alteration and repair of the Premises) as Landlord, in its reasonable discretion, may determine, and Landlord may collect and receive the rent. Landlord will in no way be responsible or liable for any failure to relet the Premises, or any part of the Premises, or for any failure to collect any rent due upon such reletting. No such reentry or taking possession of the Premises by Landlord will be construed as an election on Landlord’s part to terminate this Lease unless a written notice of such intention is given to Tenant. No written notice from Landlord under this Section or under a forcible or unlawful entry and detainer statute or similar law will constitute an election by Landlord to terminate this Lease unless such notice specifically so states. Landlord reserves the right following any such reentry or reletting to exercise its right to terminate this Lease by giving Tenant such written notice, in which event this Lease will terminate as specified in such notice.

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28.3 Certain Damages. In the event that Landlord does not elect to terminate this Lease as permitted in Section 28.2(a), but on the contrary elects to take possession as provided in Section 28.2(b), Tenant will pay to Landlord Rent and other sums as provided in this Lease that would be payable under this Lease if such repossession had not occurred, less the net proceeds, if any, of any reletting of the Premises after deducting all of Landlord’s reasonable expenses in connection with such reletting, including without limitation all repossession costs, brokerage commissions, attorneys’ fees, expenses of employees, alteration and repair costs, and expenses of preparation for such reletting. If, in connection with any reletting, the new lease term extends beyond the scheduled expiration of the existing term, or the Premises covered by such new lease include other premises not part of the Premises, a fair apportionment of the rent received from such reletting and the expenses incurred in connection with such reletting as provided in this Section will be made in determining the net proceeds from such reletting, and any rent concessions will be equally apportioned over the term of the new lease. Tenant will pay such rent and other sums to Landlord on the days on which the Rent would have been payable under this Lease if possession had not been retaken, and Landlord will be entitled to receive such Rent and other sums from Tenant on each such day.

28.4 Continuing Liability After Termination. If this Lease is terminated on account of the occurrence of an Event of Default, Tenant will remain liable to Landlord for damages in an amount equal to Rent and other amounts that would have been owing by Tenant for the balance of the Term, had this Lease not been terminated, less the net proceeds, if any, of any reletting of the Premises by Landlord subsequent to such termination, after deducting all of Landlord’s expenses in connection with such reletting, including without limitation, the expenses enumerated in Section 28.3. Landlord will be entitled to collect such damages from Tenant on the days on which Rent and other amounts would have been payable under this Lease if this Lease had not been terminated, and Landlord will be entitled to receive such Rent and other amounts from Tenant on each such day.

28.5 Cumulative Remedies. Any suit or suits for the recovery of the amounts and damages set forth in Sections 28.3 and 28.4 may be brought by Landlord, from time to time, at Landlord’s election, and nothing in this Lease will be deemed to require Landlord to await the date upon which this Lease or the Term would have expired had there occurred no Event of Default. Each right and remedy provided for in this Lease is cumulative and is in addition to every other right or remedy provided for in this Lease or now or after the Lease Date existing at law or in equity or by statute or otherwise, and the exercise or beginning of the exercise by Landlord of any one or more of the rights or remedies provided for in this Lease or now or after the Lease Date existing at law or in equity or by statute or otherwise will not preclude the simultaneous or later exercise by Landlord of any or all other rights or remedies provided for in this Lease or now or after the Lease Date existing at law or in equity or by statute or otherwise. All costs incurred by Landlord in collecting any amounts and damages owing by Tenant pursuant to the provisions of this Lease or to enforce any provision of this Lease, including reasonable attorneys’ fees from the date any such matter is turned over to an attorney, whether or not one or more actions are commenced by Landlord, will also be recoverable by Landlord from Tenant.

28.6 Waiver of Redemption. Tenant waives any right of redemption arising as a result of Landlord’s exercise of its remedies under this Article 28.

Article 29

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PARKING

29.1 Use of Parking Areas. Tenant will be entitled to non-exclusive use of the Parking Areas during the Term subject to the rules and regulations set forth in Exhibit E, and any amendments or additions to them.

Article 30 FURNITURE AND EQUIPMENT

30.1 title to the Furniture and Equipment located in the Building and the Premises shall remain the property of Landlord at all times and Tenant shall not have any right, title or interest in or to any of the Furniture and Equipment, except as expressly provided in this Lease. No later than ten (10) days following the Lease Date, Landlord and Tenant shall agree upon a schedule of the Furniture and Equipment to be used by Tenant, which schedule shall be attached to and made a part of this Lease as Exhibit F (“Furniture and Equipment”). Tenant shall execute and deliver to Landlord all financing statements under the Uniform Commercial Code and any other agreements, instruments or other writings which Landlord deems necessary to perfect or record its interest in the Furniture and Equipment. If permitted under applicable law, Landlord may file any such financing statements, signed only by Landlord, which Landlord deems necessary to perfect or record its interest in the Furniture and Equipment.

30.2 Tenant acknowledges that (a) Landlord is not a manufacturer or vendor of, or an agent of any manufacturer or vendor of, the Furniture and Equipment, and is not a dealer in property of the same kind as the Furniture and Equipment, (b) neither any vendor nor any salesman or other agent of any vendor is an agent of Landlord, and (c) Tenant is satisfied that the Furniture and Equipment is or will be suitable for the purposes for which it tenant intends.

30.3 Tenant shall assume all risk of any (a) loss, destruction or theft of or damage to the Furniture and Equipment from any cause of any kind or (b) condemnation, expropriation, confiscation, requisition or other taking of the Furniture and Equipment or of the use of the Furniture and Equipment by any governmental authority (a “Casualty”). No Casualty shall release or suspend any obligation of Tenant pursuant to this Lease (including, but not limited to the obligation to pay Rent pursuant to this Lease). Immediately upon acquiring knowledge of any Casualty, Tenant shall provide notice of such Casualty to Landlord. Promptly upon the request of Landlord, Tenant shall, at its own cost and expense, at the option of Landlord, (a) restore the Furniture and Equipment affected by any Casualty to as good condition as when first delivered to Tenant, ordinary wear and tear excepted, or (b) replace the Furniture and Equipment affected by such Casualty with similar furniture and equipment of equivalent value and to which at the time of such replacement Landlord acquires clear title thereto subject to no security or other interest of any person or entity other than the interest of Tenant pursuant to this Lease.

30.4 Tenant shall obtain and maintain at its own cost and expense during the term of this Lease (a) an insurance policy covering the Furniture and Equipment for any Casualty for not less than the replacement value of such Furniture and Equipment which names Landlord as loss payee and which is otherwise acceptable to Landlord and (b) any other insurance protection which Landlord in its sole discretion shall reasonably require.

30.5 Tenant shall indemnify Landlord against and hold Landlord harmless from each action, claim, damage, expense (including, but not limited to, fees and disbursements of counsel to Tenant), loss, liability and obligation (including, but not limited to, any of the foregoing

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arising or imposed in connection with latent or other defects in the Furniture and Equipment or under the doctrine of strict liability) arising out of the manufacture, purchase, lease, possession, operation, condition, return or use of the Furniture and Equipment, excluding, however, any of the foregoing resulting from the gross negligence or willful misconduct of Landlord.

30.6 Landlord makes no representation or warranty of any kind, whether express or implied, as to Landlord’s title to the Furniture and Equipment, as to the value, condition, quality, design, suitability, durability or operability of the Furniture and Equipment, as to the materials and workmanship in the Furniture and Equipment or as to any other matter, and, without limiting the generality of the foregoing, Landlord makes no warranty of merchant-ablity or fitness for a particular purpose as to the Furniture and Equipment, and leases the Furniture and Equipment to Tenant “as is”.

30.7 Landlord shall have no responsibility or liability to Tenant under this Lease for any consequential, incidental, indirect or special damages (including, but not limited to, any lost profit with respect to the Furniture and Equipment) even if advised of the possibility of such damages. Landlord shall have no responsibility or liability to Tenant for any loss, damage, cost or expense of any kind (including, but not limited to, any lost profit) that results directly or indirectly from the Furniture and Equipment or from any use, operation, maintenance, service or repair of, any failure or interruption of use or operation of, any failure to maintain, service or repair, or any delay in maintaining, servicing or repairing the Furniture and Equipment.

Article 31 MISCELLANEOUS

31.1 No Offer. This Lease is submitted to Tenant on the understanding that it will not be considered an offer and will not bind Landlord in any way until Tenant has duly executed and delivered duplicate originals to Landlord and Landlord has executed and delivered one of such originals to Tenant.

31.2 Joint and Several Liability. If Tenant is composed of more than one signatory to this Lease, each signatory will be jointly and severally liable with each other signatory for payment and performance according to this Lease. The act of, written notice to, written notice from, refund to, or signature of any signatory to this Lease (including without limitation modifications of this Lease made by fewer than all such signatories) will bind every other signatory as though every other signatory had so acted, or received or given the written notice or refund, or signed.

31.3 No Construction Against Drafting Party. Landlord and Tenant acknowledge that each of them and their counsel have had an opportunity to review this Lease and that this Lease will not be construed against Landlord merely because Landlord has prepared it.

31.4 Time of the Essence. Time is of the essence of each and every provision of this Lease.

31.5 No Recordation. Tenant’s recordation of this Lease or any memorandum or short form of it will be void and a default under this Lease.

31.6 No Waiver. The waiver by Landlord of any agreement, condition, or provision contained in this Lease will not be deemed to be a waiver of any subsequent breach of the same

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or any other agreement, condition, or provision contained in this Lease, nor will any custom or practice that may grow up between the parties in the administration of the terms of this Lease be construed to waive or to lessen the right of Landlord to insist upon the performance by Tenant in strict accordance with the terms of this Lease. The subsequent acceptance of Rent by Landlord will not be deemed to be a waiver of any preceding breach by Tenant of any agreement, condition, or provision of this Lease, other than the failure of Tenant to pay the particular Rent so accepted, regardless of Landlord’s knowledge of such preceding breach at the time of acceptance of such Rent.

31.7 Limitation on Recourse. The term “Landlord” as used in this Lease means only the owner, the holder of a lease or the mortgagee in possession for the time being of the Premises, so that in the event of any sale of the Building or an assignment of this Lease or an underlying lease, Landlord herein shall be and hereby is entirely freed and relieved of all obligations of Landlord hereunder without the necessity of further agreement between the parties and such purchaser, assignee or lessee agrees that the purchaser, assignee or lessee has assumed and agreed to observe and perform all obligations of Landlord hereunder. Notwithstanding anything herein contained to the contrary, it is specifically understood and agreed that there shall be no personal liability on the part of the Landlord (or its shareholders, venturers and partners, their shareholders, venturers and partners, and all of their officers, directors and employees), with respect to any of the terms, provisions, covenants and conditions of this Lease, and that Tenant shall look solely to the estate, property and equity of Landlord or such successor in interest in the Building and subject to the prior rights of any mortgagee or ground lessee, for the satisfaction of each and every remedy of Tenant in the event of any breach by Landlord or by such successor in interest of any of the terms, provisions, covenants and conditions of this Lease to be performed by Landlord, which exculpation of personal liability shall be absolute and without exception.

31.8 Estoppel Certificates. At any time and from time to time but within ten (10) days after prior written request by Landlord, Tenant will execute, acknowledge, and deliver to Landlord, promptly upon request, a certificate certifying (a) that this Lease is unmodified and in full force and effect or, if there have been modifications, that this Lease is in full force and effect, as modified, and stating the date and nature of each modification; (b) the date, if any, to which Rent and other sums payable under this Lease have been paid; (c) that no written notice of any default has been delivered to Landlord which default has not been cured, except as to defaults specified in said certificate; (d) that there is no Event of Default under this Lease or an event which, with notice or the passage of time, or both, would result in an Event of Default under this Lease, except for defaults specified in said certificate; and (e) such other matters as may be reasonably requested by Landlord. Any such certificate may be relied upon by any prospective purchaser or existing or prospective mortgagee of the Building. Tenant’s failure to deliver such a certificate within such time will be conclusive evidence of the matters set forth in it.

31.9 Waiver of Jury Trial. Landlord and Tenant by this Section 30.9 waive trial by jury in any action, proceeding, or counterclaim brought by either of the parties to this Lease against the other on any matters whatsoever arising out of or in any way connected with this Lease, the relationship of Landlord and Tenant, Tenant’s use or occupancy of the Premises, or any other claims (except claims for personal injury or property damage), and any emergency statutory or any other statutory remedy.

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31.10 No Merger. The voluntary or other surrender of this Lease by Tenant or the cancellation of this Lease by mutual agreement of Tenant and Landlord or the termination of this Lease on account of Tenant’s default will not work a merger, and will, at Landlord’s option, (a) terminate all or any subleases and subtenancies or (b) operate as an assignment to Landlord of all or any subleases or subtenancies. Landlord’s option under this Section 30.10 will be exercised by written notice to Tenant and all known sublessees or subtenants in the Premises or any part of the Premises.

31.11 Holding Over. Tenant will have no right to remain in possession of all or any part of the Premises after the expiration of the Term. If Tenant remains in possession of all or any part of the Premises after the expiration of the Term, with the express or implied consent of Landlord: (a) such tenancy will be deemed to be a periodic tenancy from month-to-month only; (b) such tenancy will not constitute a renewal or extension of this Lease for any further Term; and (c) such tenancy may be terminated by Landlord upon the earlier of 30 days’ prior written notice or the earliest date permitted by law. In such event, Base Rent will be increased to an amount equal to 200% of the Base Rent payable during the last month of the Term, and any other sums due under this Lease will be payable in the amount and at the times specified in this Lease. Such month-to-month tenancy will be subject to every other term, condition, and covenant contained in this Lease.

31.12 Notices. Any notice, request, demand, consent, approval, or other communication required or permitted under this Lease must be in writing and will be deemed to have been given when personally delivered, sent by facsimile with receipt acknowledged, deposited with any nationally recognized overnight carrier that routinely issues receipts, or deposited in any depository regularly maintained by the United States Postal Service, postage prepaid, certified mail, return receipt requested, addressed to the party for whom it is intended at its address set forth in Section 1.1. Either Landlord or Tenant may add additional addresses or change its address for purposes of receipt of any such communication by giving 10 days’ prior written notice of such change to the other party in the manner prescribed in this Section 30.12.

31.13 Severability. If any provision of this Lease proves to be illegal, invalid, or unenforceable, the remainder of this Lease will not be affected by such finding, and in lieu of each provision of this Lease that is illegal, invalid, or unenforceable a provision will be added as a part of this Lease as similar in terms to such illegal, invalid, or unenforceable provision as may be possible and be legal, valid, and enforceable.

31.14 Written Amendment Required. No amendment, alteration, modification of, or addition to the Lease will be valid or binding unless expressed in writing and signed by Landlord and Tenant. Tenant agrees to make any modifications of the terms and provisions of this Lease required or requested by any lending institution providing financing for the Building, provided that no such modifications will materially adversely affect Tenant’s rights and obligations under this Lease.

31.15 Entire Agreement. This Lease, the exhibits and addenda, if any, contain the entire agreement between Landlord and Tenant. No promises or representations, except as contained in this Lease, have been made to Tenant respecting the condition or the manner of operating the Premises or the Building.

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31.16 Captions. The captions of the various articles and sections of this Lease are for convenience only and do not necessarily define, limit, describe, or construe the contents of such articles or sections.

31.17 Notice of Landlord’s Default. In the event of any alleged default in the obligation of Landlord under this Lease, Tenant will deliver to Landlord written notice listing the reasons for Landlord’s default and Landlord will have 30 days following receipt of such notice to cure such alleged default or, in the event the alleged default cannot reasonably be cured within a 30-day period, to commence action and proceed diligently to cure such alleged default. A copy of such notice to Landlord will be sent to any holder of a mortgage or other encumbrance on the Building of which Tenant has been notified in writing, and any such holder will also have the same time periods to cure such alleged default.

31.18 Authority. Tenant and the party executing this Lease on behalf of Tenant represent to Landlord that such party is authorized to do so by requisite action of the board of directors or partners, as the case may be, and agree upon request to deliver to Landlord a resolution or similar document to that effect.

31.19 Brokers. Landlord and Tenant respectively represent and warrant to each other that neither of them has consulted or negotiated with any broker or finder with regard to the Premises except the broker named in Section 1.1, if any. Each of them will indemnify the other against and hold the other harmless from any claims for fees or commissions from anyone with whom either of them has consulted or negotiated with regard to the Premises except the broker. Landlord will pay any fees or commissions due the broker.

31.20 Governing Law. This Lease will be governed by and construed pursuant to the laws of New York, without regard to principles of conflict of laws.

31.21 Late Payments. Any Rent that is not paid when due will accrue interest at a late rate charge of the Prime Rate plus 5% per annum (but in no event in an amount in excess of the maximum rate allowed by applicable law) from the date on which it was due until the date on which it is paid in full with accrued interest.

31.22 Financial Reports. To the extent Tenant’s financial reports and/or statements cease to become publicly available, thereafter, within 15 days after Landlord’s request but no more frequently than once per annum, Tenant will furnish Tenant’s most recent audited financial statements (including any notes to them) to Landlord, or, if no such audited statements have been prepared, such other financial statements (and notes to them) as may have been prepared by an independent certified public accountant or, failing those, Tenant’s internally prepared financial statements. In such event, Tenant will discuss its financial statements with Landlord and will give Landlord access to Tenant’s books and records in order to enable Landlord to verify the financial statements. Landlord will not disclose any aspect of Tenant’s financial statements that Tenant designates to Landlord as confidential except (a) to Landlord’s lenders or prospective purchasers of the Building, (b) in litigation between Landlord and Tenant, and (c) if required by court order.

31.23 Landlord’s Consent. With respect to any provision hereof which provides for the consent or approval of Landlord, said consent or approval shall be in writing and shall not be unreasonably withheld. Tenant in no event shall be entitled to make any claim, and Tenant hereby waives any claim for money damages, whether by way of set off, counterclaim, defense

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or otherwise, based upon any claim or assertion by Tenant that Landlord has unreasonably withheld or delayed any consent or approval. Tenant’s sole remedies shall be an action or proceeding to enforce any such provision, or for an injunction or declaratory judgment. All expenses reasonably incurred by Landlord in reviewing and acting upon any request for consent hereunder, including but not limited to, attorneys’ and architects’ fees, shall be reimbursed by Tenant to Landlord, shall be deemed to constitute Additional Rent and shall be paid over to Landlord on the first day of the month following demand therefor.

31.24 Binding Effect. The covenants, conditions, and agreements contained in this Lease will bind and inure to the benefit of Landlord and Tenant and their respective heirs, distributees, executors, administrators, successors, and, except as otherwise provided in this Lease, their assigns.

31.25 Operating Covenant. If Tenant ceases to operate its business on the Premises for more than sixty (60) consecutive days (excluding any period the Premises are not being operated due to casualty, condemnation, renovation or repairs and periods falling under Force Majeure), Landlord shall have the right to terminate this Lease by giving written notice to Tenant ("Landlord's Termination Notice"). If Tenant fails to re-open within thirty (30) days following receipt of Landlord's Termination Notice, this Lease shall terminate and shall be of no further force and effect.

REMAINDER OF PAGE INTENTIONALLY BLANK

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IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of the day and year first above written.

LANDLORD:

ISKALO 8600 TRANSIT LLC

By: Iskalo Development Corp., its manager

By: /s/ Paul B. Iskalo

Paul B. Iskalo, President & CEO

TENANT:

CAPSTONE FINANCIAL GROUP, INC.

By: /s/ Darin Pastor

Darin Pastor, Chairman & CEO

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EXHIBIT B

Legal Description of the Land

ALL THAT TRACT OR PARCEL OF LAND, situate in the Town of Amherst, County of Erie and State of New York, being part of Lot No. 99, Township 12, Range 7 of the Holland Land Company’s Survey, described as follows:

BEGINNING at a point in the center line of Transit Road 625 feet northerly from its intersection with the center line of Klein Road, being also the south line of Lot No. 99 aforesaid; running thence westerly parallel with the center line Klein Road and the south line of Lot No. 99 aforesaid 433 feet; running thence northerly parallel with the center line of Transit Road 100 feet to a point; running thence easterly parallel with the center line of Klein Road and the south line of Lot No. 99 aforesaid 433 feet to a point in the center line of Transit Road; running thence southerly along the center line of Transit Road 100 feet to the point or place of beginning.

EXCEPTING therefrom land appropriated by the People of the State of New York by Notice of Appropriation recorded in the Erie County Clerk’s Office in Liber 9531 of Deeds at page 131.

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EXHIBIT C

Work Letter

In accordance with the attached Work Letter Floor Plans Landlord will complete the following work and installation for Tenant, all of which shall be of material, manufacture, design, capacity, finish and color palette of the building standard (“Landlord’s Work”). Any Tenant directed changes to the Work Letter Floor Plans that increase the cost of Landlord’s Work will be the responsibility of Tenant and shall be due and payable as Additional Rent.

With the exception of the Landlord’s Work described herein, the Premises is otherwise being accepted by Tenant in “as is” condition.

Office Area

Landlord shall construct offices as depicted on attached Work Letter Floor Plans. Scope of work is as follows:

Demolition of existing walls, ceilings, etc. as indicated on the attached Work Letter Floor Plans;
All metal stud framing and drywall, taped, sanded and ready for paint to complete the work indicated on the attached Work Letter Floor Plans;
Existing doors, frames and door hardware will be re-used where possible. New doors, frames and door hardware, if required, shall match building standard;
All painting and staining of wood trim material associated with new work as indicated on the attached Work Letter Floor Plans shall match building standard;
Relocate existing light fixtures and HVAC diffusers, as required, to accommodate the work indicated on the attached Work Letter Floor Plans;
Each of the newly constructed offices will include one (1) room occupancy light switch, one (1) electrical receptacle per wall and one (1) data box complete with pull string per office;
Replace carpet in the first floor affected work areas with building standard carpet material;
Acoustical ceiling will be installed to match building standard in affected work areas.

EXCLUSIONS

The following items are not provided, nor included in Landlord’s Work:

Tenant’s furniture, fixtures and equipment;

Moving of Tenant furniture, fixtures or equipment;

Supplemental HVAC for specialty rooms such as IT servers rooms;

Cabling for data and/or telephone;

Data or electrical for open office area. Cost for this item can be provided once the

furniture manufacture and layout has been approved by Tenant.

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EXHIBIT D

Commencement Date Certificate

This Commencement Date certificate is entered into by Landlord and Tenant pursuant to Section 3.1 of the Lease.

1. DEFINITIONS. In this certificate the following terms have the meanings given to them:

(a) Landlord: ISKALO 8600 TRANSIT LLC

(b) Tenant: CAPSTONE FINANCIAL GROUP, INC.

(d)

Premises: Suite 200 in the Building consisting of approximately 17,335 square feet of leasable space.

(e) Building Address: 8600 Transit Road, Amherst, New York 14051

2. CONFIRMATION OF LEASE COMMENCEMENT: Landlord and Tenant confirm that the Commencement Date of the Lease is May 1, 2015 and the Expiration Date is October 31, 2025 and that Sections 1.1(h) and (i) are accordingly amended.

Landlord and Tenant have executed this Commencement Date certificate as of the dates set forth below.

TENANT: LANDLORD:

CAPSTONE FINANCIAL GROUP, INC. ISKALO 8600 TRANSIT LLC

By: Iskalo Development Corp., its manager

By:___________________________ By:_______________________________

Darin Pastor, Chairman & CEO Paul B. Iskalo, President & CEO

Date:_________________________

Date:______________________________

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EXHIBIT E

Rules and Regulations

1. Landlord may from time to time adopt appropriate systems and procedures for the security or safety of the Building, any persons occupying, using, or entering the Building, or any equipment, furnishings, or contents of the Building, and Tenant will comply with Landlord’s reasonable requirements relative to such systems and procedures.

2. The sidewalks, halls, passages, exits, entrances, elevators, and stairways of the Building will not be obstructed by any tenants or used by any of them for any purpose other than for ingress to and egress from their respective premises. The halls, passages, exits, entrances, elevators and stairways are not for the general public, and Landlord will in all cases retain the right to control and prevent access to such halls, passages, exits, entrances, elevators, and stairways of all persons whose presence in the judgment of Landlord would be prejudicial to the safety, character, reputation, and interests of the Building and its tenants, provided that nothing contained in these rules and regulations will be construed to prevent such access to persons with whom any tenant normally deals in the ordinary course of its business, unless such persons are engaged in illegal activities. No tenant and no employee or invitee of any tenant will go upon the roof of the Building. No tenant will be permitted to place or install any object (including without limitation radio and television antennas, loudspeakers, sound amplifiers, microwave dishes, solar devices, or similar devices) on the exterior of the Building or on the roof of the Building.

3. No sign, placard, picture, name, advertisement, or written notice visible from the exterior of the Premises will be inscribed, painted, affixed, or otherwise displayed by Tenant on any part of the Building or the Premises without the prior written consent of Landlord. All approved signs or lettering on doors will be printed, painted, affixed, or inscribed at the expense of the Tenant by a person approved by Landlord. Other than draperies expressly permitted by Landlord and Building standard mini-blinds, material visible from outside the Building will not be permitted. In the event of the violation of this rule by Tenant, Landlord may remove the violating items without any liability, and may charge the expense incurred by such removal to Tenant.

4. No cooking will be done or permitted by any tenant on the Premises, except in areas of the Premises which are specially constructed for cooking and except that use by Tenant of microwave ovens and Underwriters’ Laboratory approved equipment for brewing coffee, tea, hot chocolate, and similar beverages will be permitted, provided that such use is in accordance with all applicable federal, state, and city laws, codes, ordinances, rules and regulations.

5. No smoking shall be done or permitted by any tenant or by any agent, employee, guest or invitee of any tenant in the Building.

6. The toilet rooms, toilets, urinals, wash bowls and other plumbing fixtures will not be used for any purposes other than those for which they were constructed, and no sweepings, rubbish, rags, or other foreign substances will be thrown in such plumbing fixtures.

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All damages resulting from any misuse of the fixtures will be borne by the tenant who, or whose servants, employees, agents, visitors, or licensees, caused the same.

7. No tenant will in any way deface any part of the Premises or the Building. In those portions of the Premises where carpet has been provided directly or indirectly by Landlord, Tenant will at its own expense install and maintain pads to protect the carpet under all furniture having casters other than carpet casters.

8. Tenant will not alter, change, replace, or rekey any lock or install a new lock or a knocker on any door of the Premises. Landlord, its agent, or employees will retain a pass (master) key to all door locks on the Premises. Any new door locks required by Tenant or any change in keying of existing locks will be installed or changed by Landlord following Tenant’s written request to Landlord and will be at Tenant’s expense. All new locks and rekeyed locks will remain operable by Landlord’s pass (master) key. Landlord will furnish each tenant, free of charge, with two (2) keys to each door lock on the Premises. Landlord will have the right to collect a reasonable charge for additional keys requested by any tenant. Tenant, upon termination of its tenancy, will deliver to Landlord all keys for the Premises and Building that have been furnished to such tenant.

9. No tenant will use or keep in the Premises or the Building any kerosene, gasoline, or inflammable or combustible or explosive fluid or material or chemical substance other than limited quantities of such materials or substances reasonably necessary for the operation or maintenance of office equipment or limited quantities of cleaning fluids and solvents required in such tenant’s normal operations in the Premises. Without Landlord’s prior written approval, no tenant will use any method of heating or air conditioning other than that supplied by Landlord. No tenant will use or keep or permit to be used or kept any foul or noxious gas or substance in the Premises.

10. Landlord will have the right, exercisable upon written notice and without liability to any tenant, to change the name and street address of the Building.

11. Landlord will have the right to prohibit any advertising by any tenant mentioning the Building that, in Landlord’s reasonable opinion, tends to impair the reputation of the Building or its desirability, and upon written notice from Landlord, such tenant will refrain from or discontinue such advertising.

12. Tenant will not bring any animals or birds into the Building, and will not permit bicycles or other vehicles inside or on the sidewalks outside the Building except in areas designated from time to time by Landlord for such purposes.

13. Tenant will store all its trash and garbage within the Premises or in receptacles provided by Landlord. No material will be placed in the trash boxes or receptacles if such material is of such nature that it may not be disposed of in the ordinary and customary manner of removing and disposing of trash and garbage without being in violation of any law or ordinance governing such disposal. Removal of any furniture or furnishings, large equipment, packing crates and packing materials will be the responsibility of each tenant and such items may not be disposed of in the Building trash receptacles. No furniture, appliances, equipment or flammable products of any type may be disposed of in the Building’s trash receptacles.

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14. Canvassing, peddling, soliciting and distributing handbills or any other written materials in the Building are prohibited, and each tenant will cooperate to prevent the same.

15. The requirements of the tenants will be attended to only upon application by written, personal, or telephone notice to Landlord at Landlord’s Address. Employees of Landlord will not perform any work or do anything outside of their regular duties unless under special instructions from Landlord.

16. Upon request of Tenant, Landlord shall install, at Tenant’s sole cost and expense, a listing above the exterior entrance of the Building identifying Tenant, provided such sign is approved in writing by Landlord, which approval shall not be unreasonably withheld, conditioned or delayed, and such sign complies with all applicable laws and regulations. Said signage right is personal to Tenant. Tenant will see that the doors of the Premises are closed and locked and that all water faucets, water apparatus, and utilities are shut off before Tenant or Tenant’s employees leave the Premises, so as to prevent waste or damage, and for any default or carelessness in this regard Tenant will make good all injuries sustained by other tenants or occupants of the Building or Landlord.

17. Tenant will not conduct itself in any manner that is inconsistent with the character of the Building or that will impair the comfort and convenience of other tenants in the Building.

18. Neither Landlord nor any operator of the Parking Areas will be liable for loss of or damage to any vehicle or any contents of such vehicle or accessories to any such vehicle, or any property left in any of the Parking Areas, resulting from fire, theft, vandalism, accident, conduct of other users of the Parking Areas and other persons, or any other casualty or cause. Further, Tenant understands and agrees that: (a) Landlord will not be obligated to provide any traffic control, security protection or operator for the Parking Areas; (b) Tenant uses the Parking Areas at its own risk; and (c) Landlord will not be liable for personal injury or death, or theft, loss of, or damage to property. Tenant waives and releases Landlord from any and all liability arising out of the use of the Parking Areas by Tenant, its employees, agents, invitees, and visitors, whether brought by any of such persons or any other person.

19. Tenant (including Tenant’s employees, agents, invitees, and visitors) will use the Parking Areas solely for the purpose of parking passenger model cars, small vans, and small trucks and will comply in all respects with any rules and regulations that may be promulgated by Landlord from time to time with respect to the Parking Areas. The Parking Areas shall not under any circumstances be used by Tenant or its agents or employees for the display or parking of vehicles advertised as being for sale. Tenant will ensure that any vehicle parked in any of the Parking Areas will be kept in proper repair and will not leak excessive amounts of oil or grease or any amount of gasoline. If any of the Parking Areas are at any time used (a) for any purpose other than parking as provided above; (b) in any way or manner reasonably objectionable to Landlord; or (c) by Tenant after default by Tenant under the Lease, Landlord, in addition to any other rights otherwise available to Landlord, may consider such default an Event of Default under the Lease.

20. Tenant’s right to use the Parking Areas will be in common with other tenants of the Building and with other parties permitted by Landlord to use the Parking Areas.

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Landlord reserves the right to assign and reassign, from time to time, particular parking spaces for use by persons selected by Landlord, provided that Tenant’s rights under the Lease are preserved. Notwithstanding the foregoing, for as long as Tenant occupies ninety percent (90%) or more of the Building, Landlord shall not assign more than ten (10) parking spaces for use by persons unrelated to Tenant. Landlord will not be liable to Tenant for any unavailability of Tenant’s designated spaces, if any, nor will any unavailability entitle Tenant to any refund, deduction, or allowance. Tenant will not park in any numbered space or any space designated as: RESERVED, HANDICAPPED, VISITORS ONLY, or LIMITED TIME PARKING (or similar designation).

21. If the Parking Areas are damaged or destroyed, or if the use of the Parking Areas is limited or prohibited by any governmental authority, or the use or operation of the Parking Areas is limited or prevented by strikes or other labor difficulties or other causes beyond Landlord’s control, Tenant’s inability to use the Parking Areas will not subject Landlord or any operator of the Parking Areas to any liability to Tenant and will not relieve Tenant of any of its obligations under the Lease and the Lease will remain in full force and effect.

22. Tenant has no right to assign or sublicense any of its rights in the Parking Areas, except as part of a permitted assignment or sublease of the Lease.

23. No act or thing done or omitted to be done by Landlord or Landlord’s agent during the Term of the Lease in connection with the enforcement of these rules and regulations will constitute an eviction by Landlord of any tenant nor will it be deemed an acceptance of surrender of the Premises by any tenant, and no agreement to accept such termination or surrender will be valid unless in writing signed by Landlord. The delivery of keys to any employee or agent of Landlord will not operate as a termination of the Lease or a surrender of the Premises unless such delivery of keys is done in connection with a written instrument executed by Landlord approving the termination or surrender.

24. In these rules and regulations, Tenant includes the employees, agents, invitees and licensees of Tenant and others permitted by Tenant to use or occupy the Premises.

25. Landlord may waive any one or more of these rules and regulations for the benefit of any particular tenant or tenants, but no such waiver by Landlord will be construed as a waiver of such rules and regulations in favor of any other tenant or tenants, nor prevent Landlord from enforcing any such rules and regulations against any or all of the tenants of the Building after such waiver.

26. These rules and regulations are in addition to, and will not be construed to modify or amend, in whole or in part, the terms, covenants, agreements and conditions of the Lease.

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EXHIBIT F

To be provided within ten (10) days of the Lease Date.

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August 8, 2013

Code of Ethics

This Code of Ethics applies to the Chief Executive Officer, President, Chief Financial Officer, and Chief Accounting Officer of Capstone Financial Group, Inc. (the "firm") and to all other professionals of the firm serving in a finance, accounting, tax or investor relations role.

The purpose of this Code of Ethics is to promote honest and ethical conduct and compliance with the law, particularly as related to the maintenance of the firm's financial books and records and the preparation of its financial statements. The obligations of this Code of Ethics supplement, but do not replace, the firm's Code of Conduct. As a finance professional of the firm, you are expected to:

Engage in and promote ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships, and to disclose to the Office of the Secretary any material transaction or relationship that reasonably could be expected to give rise to such a conflict.

Carry out your responsibilities honestly, in good faith and with integrity, due care and diligence, exercising at all times the best independent judgment.

Assist in the production of full, fair, accurate, timely and understandable disclosure in reports and documents that the firm and its subsidiaries file with, or submit to, the Securities and Exchange Commission and other regulators and in other public communications made by the firm.

Comply with applicable government laws, rules and regulations of federal, state and local governments and other appropriate regulatory agencies.

Promptly report (anonymously, if you wish to do so) to the Board of Directors any violation of this Code of Ethics or any other matters that would compromise the integrity of the firm's financial statements. You may contact the Board of Directors by mail, by phone, or by e-mail; contact information is set forth below.

Never to take, directly or indirectly, any action to coerce, manipulate, mislead or fraudulently influence the firm's independent auditors in the performance of their audit or review of the firm's financial statements.

Compliance with this Code of Ethics is a term and condition of your employment. The firm will take all necessary actions to enforce this Code, up to and including immediate dismissal. Violations of this Code of Ethics may also constitute violations of law, which may expose both you and the firm to criminal or civil penalties.

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If you have any questions about how this Code of Ethics should be applied in a particular situation, you should promptly contact the Office of the Secretary.

Board of Directors Contact Information

By mail:

Capstone Financial Group, Inc.

Attn: Chairman

2600 Michelson Drive STE 700

Irvine, CA 92612

By phone:

Call 866-798-4478

By e-mail:

darin@capstoneaffluentstrategies.com

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CERTIFICATION

I, Darin Pastor, certify that:

1. I have reviewed this Annual Report on Form 10-K of Capstone Financial Group, Inc.(the “Company”);

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 Company as of, and for, the periods presented in this report;

4. The Company’s other certifying officer and I are 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 Company and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us 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 our 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 Company’s disclosure controls and procedures and presented in this report our 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 Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal quarter (the Company’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and

5. The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company'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 Company’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 Company’s internal control over financial reporting.

Date: April 29, 2015

/s/	Darin Pastor
	Darin Pastor
	Chief Executive Officer

CERTIFICATION

I, Halford W. Johnson, certify that:

1. I have reviewed this Annual Report on Form 10-K of Capstone Financial Group, Inc.(the “Company”);

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

Date: April 29, 2015

/s/	Halford W. Johnson
	Halford W. Johnson
	Chief Financial Officer

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 the Annual Report of Capstone Financial Group, Inc. (the “Company”) on Form 10-K for the period ended December 31, 2014, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Darin Pastor, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

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

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

Date: April 29, 2015

	/s/	Darin Pastor
		Darin Pastor
		Chief Executive Officer

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 the Annual Report of Capstone Financial Group, Inc. (the “Company”) on Form 10-K for the period ended December 31, 2014, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Halford W. Johnson, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

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

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

Date: April 29, 2015

	/s/	Halford W. Johnson
		Halford W. Johnson
		Chief Financial Officer

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