Legal Utility Letter

Date: October 14, 2025 To: Tyler Gottstein & HubsAI From: Start to Finish Law, PLLC Re: Applicability of U.S. Securities Laws to the HubsAI Token LEGAL MEMORANDUM Start to Finish Law, PLLC (“Start to Finish Law,” “we” or “us”) is providing Tyler Gottstein and HubsAI (“HubsAI,” “you” or “your”) with guidance on the applicability of the U.S. federal securities laws to the HubsAI Token.

1. Issue. Whether the HubsAI cryptocurrency token ($HUBS), as described herein, constitutes a “security” under U.S. federal securities laws, specifically the Securities Act of 1933 and the Securities Exchange Act of 1934, as interpreted through the Howey test and relevant SEC guidance and case law?

2. Short Answer. Based on the information provided and subject to the assumptions herein, it is our view that the $HUBS token should not be considered a security under current interpretations of U.S. federal securities laws. Its design as a utility token with immediate consumptive functions, rapid transition to decentralized DAO governance, absence of profit-driven representations, and community-driven ecosystem development minimize the likelihood of meeting the Howey test criteria, particularly the expectation of profits and reliance on the efforts of others. However, given the lack of precise legal clarity in the cryptocurrency space, regulatory scrutiny remains a risk, and compliance with the described structure and industry best practices is critical.

3. Scope and Reliance on Memo. This memorandum is based solely on our understanding of the facts and circumstances as described to us by you and as set forth below. Our description and analysis relate to United States federal securities laws and regulations, as interpreted by the relevant federal agencies and applied by those agencies and by courts as of the date of this memorandum; this memorandum is not intended to address any other laws, contract considerations, regulations or any other legal requirements not expressly mentioned herein. We make no undertaking, and expressly disclaim any duty, to supplement or update this memorandum if, after the date hereof, facts or circumstances come to our attention or changes in the law occur that could affect the analysis set forth in this memorandum. Please note that, given the lack of precise legal clarity in the crypto token space, it is important to acknowledge that regulators or courts could reach a different conclusion than the opinions and analyses provided herein, but the information and analysis herein should - 1 - Start to Finish Law, PLLC https://starttofinishlaw.com provide you with a strong foundation for defending against any such oppositions. This memorandum is for your use only and may not be relied upon or used by any other person or entity, and it may not be shared publicly without our written consent.

4. Background and Proposed Business Plan. (a) Background HubsAI is developing a decentralized fulfillment network that integrates tokenized real-world products with autonomous kiosks to transform retail, fulfillment, and tokenized commerce. The platform aims to connect brands, logistics, and consumers through a decentralized ecosystem powered by the $HUBS token. The $HUBS token serves as the native utility and access token within the HubsAI ecosystem, facilitating various functions such as product minting, user rewards, staking, logistics, and governance. The HubsAI GitBook includes a whitepaper detailing the technology stack, tokenomics, and mission. The $HUBS token is designed to have immediate consumptive utility upon launch, with the following key functions: - - - - - Staking & Rewards: Users can stake $HUBS or tokenized product NFTs to earn ecosystem rewards or unlock product-based incentives. Governance Participation: Token holders can vote on DAO proposals related to infrastructure development, partner integrations, and reward mechanics. Network Access: $HUBS provides access to the HubsAI dashboard, analytics tools, and community participation within the DAO. Payments & Discounts: The token can be used for network transaction fees, partner discounts, and redemption across integrated kiosks and retail endpoints. Additionally, $HUBS serves as a currency for purchasing products within the HubsAI marketplace via the platform’s dashboard. To mitigate regulatory risks, HubsAI has structured its operations to emphasize decentralization and avoid characteristics of a security. The token issuance is handled by a dedicated independent entity, which will be dissolved or made dormant once decentralization milestones are achieved. HubsAI Labs, Inc. (name/structure to be determined) operates as a service provider, developing technology and contributing to the ecosystem without controlling it. Governance and treasury management will be handled by the HubsAI DAO, potentially structured as a Wyoming UNA/DUNA or offshore foundation. All token interactions are self-custodial and peer-to-peer, with tokens distributed via smart contracts directly to user wallets. Treasury and vesting wallets are managed by multi-signature contracts under DAO control. HubsAI explicitly avoids representations or promises of profits, value appreciation, or investment returns in its whitepaper, GitBook, and marketing materials, focusing solely on the token’s utility, network participation, and community governance. Any proceeds from token sales will be allocated to the DAO treasury, with neither the issuer nor HubsAI Labs retaining or profiting from these proceeds. Comprehensive terms of service, a privacy policy compliant with CCPA/GDPR, and risk disclosures addressing regulatory uncertainty, market volatility, smart contract vulnerabilities, and other risks will be implemented. Marketing efforts will avoid paid campaigns and restrict U.S. exposure, with initial liquidity planned on decentralized exchanges like Meteora and future listings determined by the DAO or independent third parties. - 2 - Start to Finish Law, PLLC https://starttofinishlaw.com (b) Proposed Business Plan HubsAI’s business plan centers on launching and scaling a decentralized fulfillment network powered by the $HUBS token. The key components of the plan include: - - - - - - Token Launch and Distribution: The $HUBS token will be minted and distributed through a dedicated issuance vehicle using audited smart contracts. Distribution will occur directly to user wallets, ensuring self-custodial and peer-to-peer interactions. Initial liquidity will be established on decentralized exchanges (e.g., Meteora), with trading driven by the community rather than HubsAI Labs, the token issuer, or the DAO. Ecosystem Development: HubsAI Labs will develop and contribute to the platform’s technology, including logistics, tokenized product minting, and kiosk integration. The platform will enable brands to tokenize physical products, track them as intelligent assets, and connect with consumers through the HubsAI marketplace. DAO Transition: Governance and treasury control will transition to the HubsAI DAO at or shortly after token issuance. Through $HUBS token voting, the DAO will manage treasury funds, community grants, and governance decisions, ensuring no single entity controls the ecosystem. Compliance and Transparency: HubsAI will implement a robust compliance stack, including OFAC screening, geofencing, and internal documentation to meet sanctions and financial laws. All smart contracts will be independently audited pre-launch, and contract addresses, DAO treasury wallets, and governance frameworks will be publicly disclosed. Funding Strategy: Any proceeds from token sales will be allocated to the DAO treasury, with neither the issuer nor HubsAI Labs retaining or profiting from these proceeds. Community and Utility Focus: The $HUBS token will drive ecosystem participation through staking, governance, network access, and payments. HubsAI will avoid speculative language and ensure all public materials emphasize utility and community-driven development. Comprehensive risk disclosures will address regulatory, market, and technical risks, and terms of service will clarify that $HUBS is a utility token, not an equity interest or other type of security or investment vehicle. By structuring the token and ecosystem to prioritize utility, decentralization, and compliance, HubsAI aims to minimize the risk of $HUBS being classified as a security under U.S. federal law while delivering a scalable, innovative solution for decentralized fulfillment and tokenized commerce.

5. Applicable Law. Under U.S. federal law, the determination of whether a cryptocurrency token like $HUBS constitutes a “security” is primarily governed by the Securities Act of 1933 (15 U.S.C. § 77a et seq.) and the Securities Exchange Act of 1934 (15 U.S.C. § 78a et seq.). The definition of a “security” under Section 2(a)(1) of the Securities Act and Section 3(a)(10) of the Exchange Act includes, among other things, an “investment contract.” The seminal test for determining whether a transaction involves an investment contract—and thus a security—is the Howey test, established in SEC v. W.J. Howey Co., 328 U.S. 293 (1946). Under the Howey test, a transaction is an investment contract if it involves: (1) an investment of money, (2) in a common enterprise, (3) with an expectation of profits, (4) derived solely from the efforts of others. The U.S. Securities and Exchange Commission (SEC) has provided significant guidance on applying the Howey test to digital assets. The SEC’s “Framework for ‘Investment Contract’ Analysis of Digital - 3 - Start to Finish Law, PLLC https://starttofinishlaw.com Assets” (April 3, 2019) emphasizes that the economic substance of the transaction, not its form, determines whether a token is a security. Key factors include whether the token is marketed or sold with promises of profit or appreciation, whether the token’s value depends on the efforts of a centralized entity, and whether the token has immediate consumptive utility within a functioning ecosystem. The 2019 framework highlights that a token’s utility and decentralization are critical in assessing whether it meets the Howey test’s “efforts of others” prong. The SEC has also indicated that tokens initially deemed securities may cease to be securities if the network becomes sufficiently decentralized, such that the token’s value no longer relies on the efforts of a central entity, as articulated in SEC Director William Hinman’s speech (June 14, 2018). The SEC’s Report of Investigation Pursuant to Section 21(a) of the Securities Exchange Act of 1934: The DAO (Exchange Act Rel. No. 81207, July 25, 2017) (“DAO Report”) further clarifies the application of securities laws to decentralized organizations and tokens. The DAO Report concluded that tokens issued by “The DAO,” a decentralized autonomous organization, were securities because they involved contributions of value (Ether), a common enterprise tied to the DAO’s platform, and an expectation of profits driven by the managerial efforts of the DAO’s creators and curators. The report underscored that the decentralized nature of a platform does not automatically exempt tokens from securities laws if the Howey test criteria are met, particularly when token holders rely on others’ efforts for value appreciation. The SEC has issued no-action letters providing fact-specific relief for certain utility tokens, offering insight into conditions under which the agency may decline enforcement. In the SEC Staff’s no-action letter to TurnKey Jet, Inc. (April 4, 2019), the Division of Corporation Finance stated it would not recommend enforcement action if TurnKey’s tokens—used exclusively for booking private jet services— met criteria including: (i) immediate consumptive utility at the time of sale, (ii) no marketing promises of profit or value appreciation, (iii) a fully functioning network with decentralized governance post-issuance, and (iv) independent audits of smart contracts. Similarly, in the no-action letter to Pocketful of Quarters, Inc. (March 18, 2019), the SEC declined action for gaming tokens with immediate in-game utility, provided there were no investment-like promotions and an operational ecosystem at launch. These letters, while non-precedential and fact-dependent, illustrate the SEC’s recognition that tokens with genuine, immediate utility and rapid decentralization may not satisfy the Howey test, particularly when aligned with the 2019 framework’s emphasis on economic reality over form. Courts have applied the Howey test in key cryptocurrency cases. In SEC v. Telegram Group Inc., 448 F. Supp. 3d 352 (S.D.N.Y. 2020), the court found that Telegram’s “Gram” tokens were securities due to centralized control by Telegram, promotional efforts suggesting profit potential, and the lack of immediate consumptive utility at the time of sale. Similarly, in SEC v. Ripple Labs, Inc., No. 20-cv 10832 (S.D.N.Y., ongoing as of 2025), the court distinguished between institutional and programmatic sales, finding that institutional sales of XRP met the Howey test due to expectations of profit from Ripple’s efforts, while programmatic sales to the public on exchanges were less likely to be securities due to their decentralized nature. Additionally, in SEC v. Kik Interactive Inc., 492 F. Supp. 3d 169 (S.D.N.Y. 2020), the court ruled that Kik’s “Kin” tokens were securities because the company promoted the tokens as an investment opportunity tied to its ecosystem development efforts. The SEC has also pursued enforcement actions emphasizing anti-fraud provisions under Rule 10b-5 of the Exchange Act (17 C.F.R. § 240.10b-5), which apply to misrepresentations or omissions in connection with the sale of securities or other assets. For example, in In re BitConnect, SEC Litigation Release No. 25108 (May 28, 2021), the SEC alleged that BitConnect’s token sales involved fraudulent representations of profit potential, reinforcing the importance of avoiding speculative promises. - 4 - Start to Finish Law, PLLC https://starttofinishlaw.com

6. Analysis. To determine whether the HubsAI cryptocurrency token ($HUBS) constitutes a “security” under U.S. federal law, we apply the Howey test, as established in SEC v. W.J. Howey Co., 328 U.S. 293 (1946), which requires: (1) an investment of money, (2) in a common enterprise, (3) with an expectation of profits, (4) derived solely from the efforts of others. The SEC’s “Framework for ‘Investment Contract’ Analysis of Digital Assets” (April 3, 2019), the DAO Report (Exchange Act Rel. No. 81207, July 25, 2017), and relevant case law, including SEC v. Telegram Group Inc., 448 F. Supp. 3d 352 (S.D.N.Y. 2020), SEC v. Ripple Labs, Inc., No. 20-cv-10832 (S.D.N.Y., ongoing as of 2025), and SEC v. Kik Interactive Inc., 492 F. Supp. 3d 169 (S.D.N.Y. 2020), guide this analysis. (a) Investment of Money. The first prong of the Howey test is likely satisfied, as token sales typically involve an investment of money or other value, such as fiat currency or cryptocurrency, in exchange for tokens. For $HUBS, if tokens are sold to users in exchange for payment (e.g., cryptocurrency or fiat), this would constitute an investment of money. However, HubsAI’s plan to distribute tokens via smart contracts to user wallets and establish initial liquidity on decentralized exchanges (e.g., Meteora) with community-driven trading suggests that not all token acquisitions may involve direct monetary investment. For example, tokens earned through staking rewards or community incentives may not meet this prong. Nevertheless, to the extent that any token sales occur, this element is likely met, consistent with findings in Telegram and Kik, where token purchases with cryptocurrency satisfied this requirement. (b) Common Enterprise. The second prong requires a common enterprise, typically characterized by horizontal commonality (pooling of investor funds with shared profits) or vertical commonality (investors’ fortunes tied to the efforts of a promoter). HubsAI’s structure mitigates the risk of a common enterprise. The $HUBS token is designed for consumptive use within a decentralized ecosystem, with proceeds from any token sales allocated to the DAO treasury for reward funding, infrastructure expansion, and ecosystem partnerships, rather than being pooled for profit-sharing. The issuer entity (e.g., HubsAI Token Ltd.) is a temporary vehicle that will be dissolved or made dormant upon achieving decentralization milestones, and HubsAI Labs operates as a service provider without retaining or profiting from proceeds. The DAO, potentially structured as a Wyoming UNA/DUNA or offshore foundation, will assume governance and treasury control shortly after token issuance, further reducing centralized control. This structure aligns with the SEC’s guidance in its 2019 framework and no-action letters such as Pocketful of Quarters, which noted that direct-to-wallet distributions and consumptive use in a functioning ecosystem diminish commonality risks by avoiding centralized pooling. In contrast, cases like The DAO and Telegram found a common enterprise due to centralized management of funds and promises of shared ecosystem growth. Here, the decentralized, community-driven nature of the HubsAI ecosystem and the absence of profit-sharing mechanisms suggest that this prong may not be fully satisfied. (c) Expectation of Profits. The third prong examines whether token holders have a reasonable expectation of profits. The SEC 2019 framework emphasizes that tokens marketed with promises of value appreciation or investment returns are more likely to meet this prong. HubsAI has taken deliberate steps to avoid such expectations by focusing exclusively on the utility of $HUBS in its whitepaper, GitBook, and marketing materials. The token’s functions—staking for rewards, voting in DAO governance, accessing the HubsAI dashboard, and - 5 - Start to Finish Law, PLLC https://starttofinishlaw.com facilitating payments or discounts—are consumptive and operational, available immediately upon launch. HubsAI explicitly avoids terms like “investors,” “returns,” or “growth” and includes comprehensive risk disclosures addressing market volatility, regulatory uncertainty, and the lack of guaranteed liquidity or price appreciation. These measures align with the SEC’s guidance that tokens with immediate consumptive utility are less likely to create an expectation of profits, as exemplified in the TurnKey no action letter, where exclusive service-use utility at sale negated profit expectations. In Kik, the court found an expectation of profits due to promotional materials suggesting token value would increase with ecosystem growth, and in Telegram, the court noted marketing that emphasized profit potential. Conversely, Ripple distinguished programmatic sales on exchanges, where buyers did not rely on Ripple’s promises of profit, from institutional sales with explicit expectations. HubsAI’s community driven trading on decentralized exchanges and lack of speculative promises reduce the likelihood of this prong being met. (d) Efforts of Others. The fourth prong requires that any expectation of profits be derived solely from the efforts of others, typically the issuer or a centralized entity. The SEC’s 2019 framework guidance and Hinman’s 2018 speech emphasize that tokens tied to a functioning, decentralized network are less likely to satisfy this prong. HubsAI’s rapid transition to DAO governance, planned at or shortly after token issuance, ensures that ecosystem development and governance are community-driven through $HUBS token voting. HubsAI Labs acts as a service provider, contributing technology (e.g., logistics, tokenized product minting, kiosk integration) via DAO proposals, not as a controlling entity. The issuer entity will be dissolved or made dormant post-launch, and neither it nor HubsAI Labs will retain proceeds or manage user funds, which are self-custodial via smart contracts. This structure aligns with the decentralization thresholds in the TurnKey no-action letter, where post-issuance network control by token holders mitigated reliance on promoters’ efforts. It contrasts with The DAO, where token holders relied on the curators’ efforts, and Telegram, where the company’s ongoing development was central to the token’s value. The Ripple case further supports that tokens traded on decentralized platforms with minimal promoter control are less likely to meet this prong. HubsAI’s audited smart contracts, transparent governance frameworks, and public disclosure of contract addresses and treasury wallets enhance decentralization, suggesting that the value of $HUBS is driven by community participation rather than the efforts of a central entity. (e) Additional Considerations. The SEC’s enforcement actions, such as In re BitConnect (SEC Litigation Release No. 25108, May 28, 2021), highlight the importance of avoiding misrepresentations or speculative promises, which HubsAI addresses through clear disclaimers and utility-focused messaging. AML and OFAC compliance, including screening and geofencing, supports HubsAI’s regulatory diligence. The planned Regulation D or Regulation S offerings for angel and institutional funding further demonstrate HubsAI’s intent to comply with securities laws for fundraising efforts, reducing overlap with $HUBS. (f) Regulatory Risk. Despite these measures, the lack of precise legal clarity in the cryptocurrency space, as noted in Section 3, means regulators or courts could reach a different conclusion. The SEC may scrutinize initial token sales or early ecosystem development if perceived as centralized, as seen in Telegram. No-action letters like TurnKey and Pocketful are fact-specific, non-binding, and do not guarantee enforcement discretion; the SEC retains authority to pursue action if conditions deviate. However, HubsAI’s emphasis - 6 - Start to Finish Law, PLLC https://starttofinishlaw.com on immediate utility, rapid decentralization, and transparent compliance—mirroring these letters— mitigates some these risks. (g) Secondary Market Considerations. While the primary analysis above focuses on initial token distribution, secondary market trading— including on decentralized exchanges (DEXs)—presents additional considerations under U.S. securities laws. The SEC evaluates each token transaction independently under the Howey test, and ongoing issuer efforts can imbue secondary sales with investment contract characteristics, as in SEC v. LBRY, Inc., 2022 WL 4125479 (D.N.H. Aug. 25, 2022), where promotional activities and credits for secondary purchasers contributed to the finding that LBC tokens were securities. To minimize risks for $HUBS secondary trading on platforms like Meteora: - - - - - Liquidity Provision: HubsAI's community-driven initial liquidity on DEXs, without direct involvement by HubsAI Labs or the issuer, aligns with decentralization goals. We recommend any affiliated liquidity be fully disclosed, promptly transferred to DAO multi-sig control, and limited to functional needs (e.g., enabling utility transactions) rather than speculative volume. Avoid token repurchases, market-making, or promotions emphasizing price appreciation, as these could trigger Exchange Act §9(a) anti-manipulation provisions, Rule 10b-5 fraud claims, or renew "efforts of others" reliance. Exchange Listings: Future listings should proceed organically via DAO or third-party decisions, without HubsAI Labs coordination. DAO proposals should prioritize utility integrations (e.g., payment gateways) over trading liquidity, reducing perceptions of centralized promotion. Vesting and Sales: Tokens held by HubsAI Labs, team, advisors, or affiliates should feature transparent, on-chain vesting (e.g., 12-24 months minimum with cliffs), lockups via audited smart contracts, public unlock schedules, and sale volume caps to avoid market disruption. Disclosures modeled on SEC Form 144 requirements for affiliate sales of restricted securities may enhance transparency. Post-Launch Conduct: To ensure secondary buyers do not reasonably expect profits from HubsAI's efforts, HubsAI Labs should limit public promotions (including U.S.-targeted marketing via geofencing), focusing instead on technical contributions submitted as DAO proposals, and position itself as a compensated service provider. Community-led adoption narratives, combined with the rapid DAO transition, support the position that secondary markets reflect decentralized value drivers, potentially shedding any initial security characterization consistent with the Hinman speech (2018), though SEC analysis remains fact-specific. These measures further weaken Howey prongs (c) and (d) for secondary transactions but do not eliminate risks, as the SEC may scrutinize the overall ecosystem.

7. Conclusion. As discussed above, we believe the $HUBS token, as currently structured, is unlikely to be deemed a security under U.S. federal securities laws. The Howey test analysis indicates that while the “investment of money” prong may be satisfied in token sales, the “common enterprise” and “expectation of profits” prongs are weakened by HubsAI’s decentralized structure, absence of profit-sharing mechanisms, and utility-focused messaging, consistent with SEC no-action relief in TurnKey and Pocketful. The “efforts of others” prong is further undermined by the rapid transition to DAO governance, self-custodial token interactions, and community-driven development. HubsAI’s compliance measures, including audited smart contracts, transparent disclosures, and avoidance of speculative promises, align with SEC guidance and judicial precedent, such as the Ripple case’s distinction for programmatic sales. Nonetheless, the - 7 - Start to Finish Law, PLLC https://starttofinishlaw.com evolving nature of cryptocurrency regulation means that the SEC or courts could reach a different conclusion, particularly if initial token sales are perceived as centralized. To maintain this position, HubsAI must adhere strictly to its utility-focused approach, decentralized governance timeline, and comprehensive risk disclosures while continuing to monitor regulatory developments and align with industry best practices, potentially pursuing a no-action request from the SEC. Should you have any questions regarding this memo, please do not hesitate to email Eric Preston at [e-mail]. Sincerely, /s/ Eric R. Preston, Esq. Principal Attorney Start to Finish Law, PLLC [e-mail] https://starttofinishlaw.com