Item 1.01. Entry into a Material Definitive
Agreement.
Underwriting Agreement
On May 20, 2020, ShiftPixy, Inc., a Wyoming
Corporation (“the “Company”), entered into an underwriting agreement (the “Underwriting Agreement”)
with A.G.P./Alliance Global Partners (the “Underwriter”), in connection with a public offering (the “Offering”)
of an aggregate of (i) 1,898,850 shares (the “Shares”) of the Company’s common stock, par value $0.0001 per share
(the “Common Stock”), (ii) pre-funded warrants to purchase 323,310 shares of Common Stock (the “Pre-Funded Warrants”)
and (iii) warrants to purchase 1,277,580 shares of Common Stock (the “Common Warrants”), which included the partial
exercise of the Underwriter’s over-allotment option to purchase 166,500 additional Warrants.
Each Share and Pre-Funded Warrant sold
in the Offering was sold together with a Common Warrant as a fixed combination, with each Share and Pre-Funded Warrant sold being
accompanied by a Common Warrant to purchase 0.5 shares of Common Stock. The Shares and accompanying Common Warrants were sold at
a price to the public of $5.40, less underwriting discounts and commissions and the Pre-Funded Warrants and accompanying Common
Warrants were sold at a price to the public of $5.399, less underwriting discounts and commissions. The
Common Warrants are exercisable immediately, will expire on May 26, 2025 and have an exercise price of $5.40 per share, subject
to anti-dilution and other adjustments for certain stock splits, stock dividends, or recapitalizations.
The Pre-Funded Warrants were sold to purchasers
whose purchase of shares of Common Stock in the Offering would otherwise result in the purchaser, together with its affiliates
and certain related parties, beneficially owning more than 4.99% (or at the election of the purchaser, 9.99%) of the Company’s
outstanding Common Stock immediately following the consummation of the Offering, in lieu of shares of Common Stock. Each Pre-Funded
Warrant represents the right to purchase one share of Common Stock at an exercise price of $0.001 per share. The Pre-Funded Warrants
are exercisable immediately and may be exercised at any time until the Pre-Funded Warrants are exercised in full. Each Share and
each Pre-Funded Warrant was sold with an accompanying Common Warrant but were issued separately and are immediately separable upon
issuance.
The Offering was made pursuant to a Registration
Statement (No. 333-237457) on Form S-1 (the “Registration Statement”), which was filed by the Company with the Securities
and Exchange Commission on March 30, 2020, amended on May 19, 2020, and declared effective on May 20, 2020 (the “Effective
Date”), and a related registration statement filed pursuant to Rule 462 promulgated
under the Securities Act of 1933, as amended. The Offering was made only by means of a prospectus forming a part of
the Registration Statement.
Pursuant to the Underwriting Agreement,
the Company, upon closing of the Offering, issued to the Underwriter warrants to purchase up to 111,108 shares of Common Stock
(the “Underwriter Warrants” and, together with the Common Warrants and the Pre-Funded Warrants, the “Warrants”),
which is 5.0% of the aggregate number of Shares and Shares issuable upon exercise of the Pre-Funded Warrants sold in
the Offering. The Underwriter Warrants are exercisable at any time and from time to time, in whole or in part, commencing from
six months after the Effective Date and ending five years from the Effective Date, at a price per share equal to $5.94, which is
110% of the public offering price per Share.
The Offering closed on May 26, 2020 and
the Company received net proceeds of approximately $10.9 million after deducting underwriting discounts and commissions and estimated
expenses payable by the Company associated with the Offering. The Company intends to use the net proceeds from the Offering for
general corporate purposes, including working capital, operating expenses and capital expenditures.
The Underwriting Agreement contains customary
representations, warranties and agreements by the Company, customary conditions to closing, indemnification obligations of the
Company and the Underwriter, including for liabilities under the Securities Act of 1933, as amended, other obligations of the parties
and termination provisions.
The foregoing descriptions of the Underwriting
Agreement, the Common Warrants, the Pre-Funded Warrants and the Underwriter Warrants are not complete and are qualified
in their entirety by reference to the full text of the Underwriting Agreement and the forms of the Pre-Funded Warrant,
the Underwriter Warrant and the Common Warrant, copies of which are filed as Exhibit 1.1, Exhibit 4.1, Exhibit 4.2 and Exhibit
4.3, respectively, and are incorporated by reference herein.