STATEMENT OF INTENT

This Letter of Intent ("LOI") expresses our preliminary interest in implementing Neftwerk Protocol's blockchain-based backend technology to migrate our gallery inventory on-chain and leverage enhanced transaction capabilities.

BUSINESS CHALLENGES ADDRESSED

Our gallery currently faces several operational challenges that Neftwerk Protocol's solution appears positioned to address:

• Cross-Border Transaction Costs: Traditional international payments incur fees of 3-7%, significantly impacting our margins on international sales.

• Transaction Settlement Time: Current payment processing can take 3-60 business days for international transactions, affecting cash flow.

• Data Security and Sovereignty:  

• Inventory Transparency: Manual inventory tracking limits real-time visibility and inherent provenance documentation.

• Payment Processing Limitations: Credit card processing fees currently range 2.5-3.5% per transaction.

• Communication and Follow-up with Potential Clients: Current systems require administration and upkeep of several communication channels. 

ANTICIPATED BENEFITS

Based on our preliminary discussions, implementation of Neftwerk Protocol would potentially provide:

• Reduced Transaction Costs: Target transaction fee structure of 1% or less represents significant potential savings annually.

• Faster Settlement: Near-instantaneous transaction settlement improving cash flow management for all parties (artists, gallery splits, consultant percentage, etc).

• Automated Continuous Royalties for Artists: Smart-contract tokenization to provide and protect continuous artist royalties. 

• Enhanced Provenance: Immutable on-chain records strengthening authentication and ownership history

• Global Accessibility: 24/7 transaction capability across all time zones.

• Operational Efficiency: Automated inventory tracking and transaction recording with embedded data sovereignty and security.

• Seamless integration with My Pocket Gallery™: Providing user-friendly access to our clients to initiate sales and communicate with our gallery.

COMMERCIAL TERMS (Preliminary)

• Transaction Fee: 1% or less as discussed

• Implementation Cost: To be determined based on inventory size and complexity

• Ongoing Support: Monthly/annual maintenance fee structure to be negotiated

• Revenue Sharing: Potential for revenue sharing with gallery partners

CONDITIONS AND NEXT STEPS

This LOI is contingent upon:

1. Due Diligence: Comprehensive review of platform security, regulatory compliance, and technical capabilities

2. Pilot Program Success: Satisfactory completion of limited pilot implementation

3. Regulatory Compliance: Full compliance with global art market regulations

4. Insurance and Liability: Appropriate coverage for digital asset management and transaction processing

NON-BINDING NATURE

This LOI represents a preliminary expression of interest only and does not constitute a binding commitment by either party. Any formal agreement would require execution of definitive documentation following successful completion of due diligence and pilot program phases.

AUTHORIZATION

This Letter of Intent reflects our genuine interest in exploring a partnership with Neftwerk Protocol, subject to the conditions outlined above.