PowerUp Acquisition Corp

Subscription Agreements

On May 9, 2024, the Company entered into four separate Subscription Agreements (each, a “Second Subscription Agreement”) with the Sponsor, VKSS Capital, LLC (the “Affiliate”), and the four separate investors (the “Investors”), whereby, to support the Company’s anticipated de-SPAC transaction, the Investors collectively contributed to Sponsor a total of $500,000 (the “Second Contribution”) and, in turn, the Sponsor loaned $500,000 to the Company (the “May Loan”). The Sponsor and Affiliate have agreed that the Affiliate will transfer to the Investors an aggregate of 250,000 shares of Kernel Group Holdings, Inc. (“Kernel”) common stock (the “Subscription Shares”) at the closing of Kernel’s initial business combination. In consideration for the Affiliate’s transfer of the Subscription Shares to the Investors, the Sponsor will transfer 250,000 shares of the Company’s common stock to the Affiliate. In connection with repayment of the Second Contribution, the Sponsor will be charged a one-time, cash-based interest charge of $250,000. The May Loan also includes a one-time, cash-based interest charge of $250,000 and a one-time, stock-based interest charge of 500,000 shares of the Company’s common stock, which shares will be delivered to the Sponsor by the Company before the de-SPAC closing. The May Loan will be repaid by the Company upon the de-SPAC closing, or, otherwise the Sponsor will pay to the Investors all repayments of the May Loan Sponsor itself has received within two business days of the de-SPAC closing and make such other payments, if any, as may be required in order to repay all amounts due to the Investors under the Second Subscription Agreements. The Investors may elect at the de-SPAC closing to receive such payments in cash or shares of the Company’s common stock, at a rate of one share for each ten dollars ($10.00) of the Second Contribution. In the event that the de-SPAC closing does not occur within 120 days of the date of the Second Subscription Agreements or the Company liquidates without consummating its initial Business Combination, the Affiliate will immediately transfer the Subscription Shares to the Investors.

Nasdaq Notice

On June 3, 2024, the Company received a notice (the “Notice”) from the Nasdaq Listing Qualifications Department indicating that the Company was not compliant with the timely filing requirement for continued listing under Nasdaq Listing Rule 5250(c)(1) (the “Listing Rule”), which requires listed companies to timely file all required periodic reports with the SEC. The Notice indicates that the Company must, no later than August 2, 2024, submit a plan to regain compliance with respect to the filing requirement. Following receipt of such plan, Nasdaq may grant an extension of up to 180 calendar days from the due date of the Company’s Quarterly Report on Form 10-Q for the period ending March 31, 2024 (the “Form 10-Q”), or until November 18, 2024, for the Company to regain compliance. However, as a result of filing this Form 10-Q, the Company believes it has fully regained compliance with the Nasdaq Listing Rule.