UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
October 7, 2015
NEONODE INC.
(Exact name of issuer
of securities held pursuant to the plan)
Commission File Number
1-35526
Delaware |
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94-1517641 |
(State or other jurisdiction
of incorporation) |
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(I.R.S. Employer
Identification No.) |
Storgatan 23C, 114 55 Stockholm, Sweden
(Address of Principal Executive Office, including
Zip Code)
+46 (0) 8 667 17 17
Registrant’s telephone
number, including area code:
Not Applicable
(Former name or former
address, if changed since last report)
Check the appropriate box below if the Form 8-K
filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see
General Instruction A.2. below):
☐ |
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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☐ |
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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☐ |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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☐ |
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01. Entry into a Material Definitive Agreement.
On October 7, 2015, Neonode Inc. (the “Company”)
entered into an underwriting agreement (the “Underwriting Agreement”) with Craig-Hallum Capital Group LLC (the “Underwriter”)
relating to the sale of 3,200,000 shares of common stock of the Company.
The net proceeds to the Company from this offering are expected
to be approximately $5.7 million, after deducting the underwriting discount but before deducting other estimated offering expenses
payable by the Company. The offering is expected to close on or about October 13, 2015, subject to customary closing conditions.
The Company anticipates using the net proceeds from the offering primarily for general corporate purposes, including capital expenditures
and working capital.
The Underwriting Agreement contains customary representations,
warranties and agreements by us, 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 representations, warranties and covenants contained in the Underwriting Agreement were made only for purposes of such agreement
and as of specific dates, were solely for the benefit of the parties to such agreement, and may be subject to limitations agreed
upon by the contracting parties.
The offering is being made pursuant
to our effective registration statement on Form S-3 (File No. 333-196426) previously filed with the Securities and Exchange Commission
and a prospectus supplement thereunder.
The Underwriting Agreement is filed as Exhibit 1.1 to this
report and is incorporated by reference herein. The foregoing description of the terms of the Underwriting Agreement does not purport
to be complete and is qualified in its entirety by reference to such exhibit.
Forward-Looking Statements
This report contains forward-looking statements that are
subject to a number of risks and uncertainties, including statements about our expectations regarding our anticipated use of proceeds
from the offering. Actual results may differ materially from those set forth in this report due to risks and uncertainties detailed
in the risk factors included in our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and
in our other filings with the SEC. Except as required by law, we undertake no obligation to revise or update information herein
to reflect events or circumstances in the future, even if new information becomes available.
Item 8.01. Other Events.
On October 7, 2015, the Company issued a press release announcing
the pricing of the offering. A copy of the press release is attached as Exhibit 99.1 hereto and is incorporated into this Item
8.01 by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. |
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Description |
1.1 |
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Underwriting Agreement, dated as of October
7, 2015. |
5.1 |
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Opinion of Reed Smith LLP. |
23.1 |
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Consent of Reed Smith LLP (included in Exhibit 5.1). |
99.1 |
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Press Release of the Company dated October 7, 2015 announcing pricing of public offering of common stock. |
SIGNATURES
Pursuant to the requirements
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.
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NEONODE INC. |
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By: |
/s/ Lars Lindqvist |
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Name: |
Lars Lindqvist |
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Title: |
Chief Financial Officer |
Date: October 7, 2015
3
Exhibit
1.1
3,200,000
Shares
NEONODE
INC.
Common
Stock
UNDERWRITING
AGREEMENT
October
7, 2015
CRAIG-HALLUM
CAPITAL GROUP LLC
As
Representative of the several Underwriters
222
South Ninth Street, Suite 350
Minneapolis,
Minnesota 55402
Dear
Sirs:
1. Introductory.
Neonode Inc., a Delaware corporation (the “Company”), proposes to sell, pursuant to the terms of this Underwriting
Agreement (the “Agreement”), to the several underwriters named in Schedule I hereto (the “Underwriters,”
or, each, an “Underwriter”), an aggregate of 3,200,000 shares of common stock, $0.001 par value (the “Common
Stock”) of the Company. The aggregate of 3,200,000 shares so proposed to be sold is hereinafter referred to as the “Stock”.
Craig-Hallum Capital Group LLC (“C-H”) is acting as representative of the several Underwriters and in such
capacity is hereinafter referred to as the “Representative.”
2. Representations
and Warranties of the Company
(I) Representations
and Warranties of the Company. The Company represents and warrants to the several Underwriters, as of the date hereof
and as of the Closing Date (as defined below), and agrees with the several Underwriters, that:
(a) A registration statement of the Company on Form S-3 (File No. 333-196426) (including all pre-effective amendments thereto, the
“Initial Registration Statement”) in respect of the Stock has been filed with the Securities and Exchange Commission
(the “Commission”) pursuant to Rule 415 under the Securities Act of 1933, as amended (the “Securities
Act”). The Company meets the requirements for use of Form S-3 under the Securities Act, and the rules and regulations
of the Commission thereunder (the “Rules and Regulations”). The Initial Registration Statement and any post-effective
amendment thereto, each in the form heretofore delivered to you, and, excluding exhibits thereto, have been declared effective
by the Commission in such form and meet the requirements of the Securities Act, and the Rules and Regulations. The aggregate market
value of the Company’s voting and non-voting common equity held by non-affiliates of the Company was at least $75 million
within 60 days prior to the date of filing of the Company’s most recent Annual Report on Form 10-K that is incorporated
into the Initial Registration Statement. Other than (i) a registration statement, if any, increasing the size of the offering
filed pursuant to Rule 462(b) under the Securities Act and the Rules and Regulations (a “Rule 462(b) Registration Statement”),
(ii) the Prospectus (as defined below) contemplated by this Agreement to be filed pursuant to Rule 424(b) of the Rules and Regulations
in accordance with Section 4(I)(a) hereof and (iii) any Issuer Free Writing Prospectus (as defined below), no other document with
respect to the offer and sale of the Stock has heretofore been filed with the Commission. No stop order suspending the effectiveness
of the Initial Registration Statement, any post-effective amendment thereto or the Rule 462(b) Registration Statement, if any,
has been issued and no proceeding for that purpose or pursuant to Section 8A of the Securities Act has been initiated or threatened
by the Commission (any preliminary prospectus included in the Initial Registration Statement or filed with the Commission pursuant
to Rule 424(a) of the Rules and Regulations is hereinafter called a “Preliminary Prospectus”). The various
parts of the Initial Registration Statement and the Rule 462(b) Registration Statement, if any, in each case including all exhibits
thereto and including (i) the information contained in the Prospectus filed with the Commission pursuant to Rule 424(b) of the
Rules and Regulations and deemed by virtue of Rules 430A, 430B and 430C under the Securities Act to be part of the Initial Registration
Statement at the time it became effective and (ii) the documents incorporated by reference in the Rule 462(b) Registration Statement,
if any, at the time the Rule 462(b) Registration Statement became effective, are hereinafter collectively called the “Registration
Statements” (for purposes of clarity, if there is no Rule 462(b) Registration Statement, reference to a Rule 462(b) Registration
Statement in this definition shall be disregarded). The base prospectus included in the Initial Registration Statement at the
time of effectiveness thereof (the “Base Prospectus”), as supplemented by the final prospectus supplement relating
to the offer and sale of the Stock, in the form to be filed pursuant to and within the time limits described in Rule 424(b) under
the Rules and Regulations, is hereinafter called the “Prospectus.”
Any
reference herein to any Registration Statement, Base Prospectus, Preliminary Prospectus or the Prospectus shall be deemed to refer
to and include the documents incorporated by reference therein. Any reference to any amendment or supplement to any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include any documents filed after the date of such Preliminary Prospectus,
if any, or the Prospectus under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and incorporated
by reference in such Preliminary Prospectus, if any, or Prospectus, as the case may be. Any reference to any amendment to the
Registration Statement shall be deemed to refer to and include any annual report of the Company filed pursuant to Section 13(a)
or 15(d) of the Exchange Act after the date of this Agreement that is incorporated by reference in the Registration Statements.
(b) As
of the Applicable Time (as defined below) and as of the Closing Date (as defined below), as the case may be, neither (i) the General
Use Free Writing Prospectus(es) (as defined below) issued at or prior to the Applicable Time, the Pricing Prospectus (as defined
below) and the information included on Schedule II hereto, all considered together (collectively, the “General
Disclosure Package”), (ii) any individual Limited Use Free Writing Prospectus (as defined below), nor (iii) any bona
fide electronic road show (as defined in Rule 433(h)(5) of the Rules and Regulations that has been made available without restriction
to any person), when considered together with the General Disclosure Package, included or will include any untrue statement of
a material fact or omitted or will omit to state a material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading; provided, however, that the Company makes no representations
or warranties as to information contained in or omitted from the General Disclosure Package, in reliance upon, and in conformity
with, written information furnished to the Company through the Representative by or on behalf of any Underwriter specifically
for inclusion therein, which information the parties hereto agree is limited to the Underwriters’ Information as defined
in Section 17. As used in this paragraph (b) and elsewhere in this Agreement:
“Applicable
Time” means 6:00 a.m., New York time, on the date of this Agreement or such other time as agreed to by the Company and
the Representative.
“Pricing
Prospectus” means the Preliminary Prospectus, if any, and the Base Prospectus, each as amended and supplemented immediately
prior to the Applicable Time, including any document incorporated by reference therein and any prospectus supplement deemed to
be a part thereof.
“Issuer
Free Writing Prospectus” means any “issuer free writing prospectus,” as defined in Rule 433 of the Rules
and Regulations relating to the Stock in the form filed or required to be filed with the Commission or, if not required to be
filed, in the form retained in the Company’s records pursuant to Rule 433(g) of the Rules and Regulations.
“General
Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is identified on Schedule III to this
Agreement.
“Limited
Use Free Writing Prospectuses” means any Issuer Free Writing Prospectus that is not a General Use Free Writing Prospectus.
(c) No
order preventing or suspending the use of any Preliminary Prospectus, any Issuer Free Writing Prospectus or the Prospectus relating
to the proposed offering of the Stock has been issued by the Commission, and no proceeding for that purpose or pursuant to Section
8A of the Securities Act has been instituted or, to the Company’s knowledge, threatened by the Commission, and each Preliminary
Prospectus, if any, at the time of filing thereof, conformed in all material respects to the requirements of the Securities Act
and the Rules and Regulations, and did not contain an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made,
not misleading; provided, however, that the Company makes no representations or warranties as to information contained
in or omitted from any Preliminary Prospectus, any Issuer Free Writing Prospectus or the Prospectus in reliance upon, and in conformity
with, written information furnished to the Company through the Representative by or on behalf of any Underwriter specifically
for inclusion therein, which information the parties hereto agree is limited to the Underwriters’ Information as defined
in Section 17.
(d) At
the respective times the Registration Statements and any amendments thereto became or become effective, at the date of this Agreement
and at the Closing Date, each Registration Statement and any amendments thereto conformed and will conform in all material respects
to the requirements of the Securities Act and the Rules and Regulations and did not and will not contain any untrue statement
of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein
not misleading; and the Prospectus and any amendments or supplements thereto, at the time the Prospectus or any amendment or supplement
thereto was issued and at the Closing Date, conformed and will conform in all material respects to the requirements of the Securities
Act and the Rules and Regulations and did not and will not contain an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading;
provided, however, that the foregoing representations and warranties in this paragraph (d) shall not apply to information
contained in or omitted from the Registration Statements or the Prospectus, or any amendment or supplement thereto, in reliance
upon, and in conformity with, written information furnished to the Company through the Representative by or on behalf of any Underwriter
specifically for inclusion therein, which information the parties hereto agree is limited to the Underwriters’ Information
(as defined in Section 17).
(e) Each
Issuer Free Writing Prospectus, as of its issue date and at all subsequent times through the completion of the public offer and
sale of the Stock or until any earlier date that the Company notified or notifies the Underwriter as described in Section 4(I)(f),
did not, does not and will not include any information that conflicted, conflicts or will conflict with the information contained
in the Registration Statement, Pricing Prospectus or the Prospectus, including any document incorporated by reference therein
and any prospectus supplement deemed to be a part thereof that has not been superseded or modified, or included or would include
an untrue statement of a material fact or omitted or would omit to state a material fact required to be stated therein or necessary
in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The foregoing
sentence does not apply to statements in or omissions from any Issuer Free Writing Prospectus in reliance upon, and in conformity
with, written information furnished to the Company through the Representative by or on behalf of any Underwriter specifically
for inclusion therein, which information the parties hereto agree is limited to the Underwriters’ Information (as defined
in Section 17).
(f) The
documents incorporated by reference in the Prospectus, when they were filed with the Commission conformed in all material respects
to the requirements of the Securities Act or the Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder and none of such documents contained any untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were
made, not misleading; and any further documents so filed and incorporated by reference in the Prospectus, when such documents
are filed with Commission will conform in all material respects to the requirements of the Securities Act or the Exchange Act,
as applicable, and the rules and regulations of the Commission thereunder and will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
(g) The
Company has not, directly or indirectly, distributed and will not distribute any offering material in connection with the offering
and sale of the Stock other than any Preliminary Prospectus, the Prospectus and other materials, if any, permitted under the Securities
Act and consistent with Section 4(I)(b) below. The Company will file with the Commission all Issuer Free Writing Prospectuses
(other than a “road show,” as described in Rule 433(d)(8) of the Rules and Regulations) in the time and manner required
under Rules 163(b)(2) and 433(d) of the Rules and Regulations.
(h) At
the time of filing the Initial Registration Statement, any 462(b) Registration Statement and any post-effective amendments thereto,
and at the date hereof, the Company was not, and the Company currently is not, an “ineligible issuer,” as defined
in Rule 405 of the Rules and Regulations.
(i) The
Company and each of its subsidiaries (as defined in Section 15) (the “Subsidiaries”) have been duly organized
and are validly existing as corporations or other legal entities in good standing (or the foreign equivalent thereof) under the
laws of their respective jurisdictions of organization. The Company and the Subsidiaries are duly qualified to do business and
are in good standing as foreign corporations or other legal entities in each jurisdiction in which their respective ownership
or lease of property or the conduct of their respective businesses requires such qualification and have all power and authority
(corporate or other) necessary to own or hold their respective properties and to conduct the businesses in which they are engaged,
except where the failure to so qualify or have such power or authority would not (i) have, singularly or in the aggregate, a material
adverse effect on the condition (financial or otherwise), results of operations, assets, business or prospects of the Company
and the Subsidiaries taken as a whole, or (ii) impair in any material respect the ability of the Company to perform its obligations
under this Agreement or to consummate any transactions contemplated by this Agreement, the General Disclosure Package or the Prospectus
(any such effect as described in clauses (i) or (ii), a “Material Adverse Effect”). The Company owns or controls,
directly or indirectly, only the following corporations, partnerships, limited liability partnerships, limited liability companies,
associations or other entities: Neonode Technologies AB (Sweden), Neno User Interface Solutions AB (Sweden), Neonode KK (Japan),
Neonode Americas Inc. (U.S.), NEON Technology Inc. (U.S.), Neonode Korea Ltd. (South Korea) and Neonode Taiwan Ltd (Taiwan). Neonode
Technologies AB (Sweden) is the only significant subsidiary (as defined in Section 15) (the “Significant Subsidiary”)
of the Company.
(j) This
Agreement has been duly authorized, executed and delivered by the Company.
(k) The
Stock to be issued and sold by the Company to the Underwriters hereunder has been duly and validly authorized and, when issued
and delivered against payment therefor as provided herein, will be duly and validly issued, fully paid and nonassessable and free
of any preemptive or similar rights and will conform to the description thereof contained in the General Disclosure Package and
the Prospectus.
(l) The
Company has an authorized capitalization as set forth under the heading “Description of Common Stock” in the Base
Prospectus, and all of the issued shares of capital stock of the Company, including the Stock, have been duly and validly authorized
and issued, are fully paid and non-assessable, have been issued in compliance with federal and state securities laws, and conform
to the description thereof contained in the General Disclosure Package and the Prospectus. As the date of this Agreement, the
shares of Common Stock issued and outstanding, and shares of Common Stock issuable upon the exercise of all options, warrants
and convertible securities are as set forth in the Prospectus. All of the Company’s options, warrants and other rights to
purchase or exchange any securities for shares of the Company’s capital stock have been duly authorized and validly issued
and were issued in compliance with federal and state securities laws. None of the outstanding shares of Common Stock was issued
in violation of any preemptive rights, rights of first refusal or other similar rights to subscribe for or purchase securities
of the Company. There are no authorized or outstanding shares of capital stock, options, warrants, preemptive rights, rights of
first refusal or other rights to purchase, or equity or debt securities convertible into or exchangeable or exercisable for, any
capital stock of the Company other than those described above or accurately described in the General Disclosure Package. The description
of the Company’s stock option, stock bonus and other stock plans or arrangements, and the options or other rights granted
thereunder, as described in the General Disclosure Package and the Prospectus, accurately and fairly present the information required
to be shown with respect to such plans, arrangements, options and rights.
(m) All
the outstanding shares of capital stock (if any) of each of the Subsidiaries have been duly authorized and validly issued, are
fully paid and nonassessable and, except to the extent set forth in the General Disclosure Package or the Prospectus, are owned
by the Company directly, free and clear of any claim, lien, encumbrance, security interest, restriction upon voting or transfer
or any other claim of any third party.
(n) The
execution, delivery and performance of this Agreement by the Company, the issue and sale of the Stock by the Company and the consummation
of the transactions contemplated hereby will not (with or without notice or lapse of time or both) (i) conflict with or result
in a breach or violation of any of the terms or provisions of, constitute a default or a Debt Repayment Triggering Event (as defined
below) under, give rise to any right of termination or other right or the cancellation or acceleration of any right or obligation
or loss of a benefit under, or give rise to the creation or imposition of any lien, encumbrance, security interest, claim or charge
upon any property or assets of the Company or any subsidiary pursuant to, any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument to which the Company or any of the Subsidiaries is a party or by which the Company or any of
the Subsidiaries is bound or to which any of the property or assets of the Company or any of the Subsidiaries is subject, (ii)
result in any violation of the provisions of the charter or by-laws (or analogous governing instruments, as applicable) of the
Company or any of the Subsidiaries or (iii) result in a violation of any law, statute, rule, regulation, judgment, order or decree
of any court or governmental agency or body, domestic or foreign, having jurisdiction over the Company or any of the Subsidiaries
or any of their properties or assets; except in the cases of clauses (i) and (iii), to the extent that any such conflict, breach,
violation or default would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. A
“Debt Repayment Triggering Event” means any event or condition that gives, or with the giving of notice or
lapse of time would give the holder of any note, debenture or other evidence of indebtedness (or any person acting on such holder’s
behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by the Company or
any of the Subsidiaries.
(o) Except
for the registration of the Stock under the Securities Act, Exchange Act and applicable state or foreign securities laws, the
Financial Industry Regulatory Authority (“FINRA”) and the NASDAQ Capital Market in connection with the purchase
and distribution of the Stock by the Underwriters and the listing of the Stock on the NASDAQ Capital Market, no consent, approval,
authorization or order of, or filing, qualification or registration (each an “Authorization”) with, any court,
governmental or non-governmental agency or body, foreign or domestic having jurisdiction over the Company or any of its properties
or assets which has not been made, obtained or taken and is not in full force and effect, is required for the execution, delivery
and performance of this Agreement by the Company, the offer or sale of the Stock or the consummation of the transactions contemplated
hereby. All corporate approvals (including those of stockholders) necessary for the Company to consummate the transactions contemplated
by this Agreement have been obtained and are in effect.
(p) KMJ
Corbin & Company LLP, who have certified certain financial statements included or incorporated by reference in the Registration
Statements, the General Disclosure Package and the Prospectus, is an independent registered public accounting firm within the
meaning of Article 2-01 of Regulation S-X and the Public Company Accounting Oversight Board (United States) (the “PCAOB”).
(q) The
financial statements, together with the related notes and schedules, included or incorporated by reference in the General Disclosure
Package, the Prospectus and in each Registration Statement fairly present in all material respects the financial position and
the results of operations and changes in financial position of the Company and its consolidated subsidiaries at the respective
dates or for the respective periods therein specified. Such statements and related notes and schedules have been prepared in accordance
with the generally accepted accounting principles in the United States (“GAAP”) applied on a consistent basis
throughout the periods involved except as may be set forth in the related notes included or incorporated by reference in the General
Disclosure Package. The financial statements, together with the related notes and schedules, included or incorporated by reference
in the General Disclosure Package and the Prospectus comply as to form in all material respects with Regulation S-X. No other
financial statements or supporting schedules or exhibits are required by Regulation S-X to be described, included or incorporated
by reference in the Registration Statements, the General Disclosure Package or the Prospectus. There is no pro forma or as adjusted
financial information which is required to be included in the Registration Statements, the General Disclosure Package and the
Prospectus or a document incorporated by reference therein in accordance with Regulation S-X which has not been included or incorporated
as so required. The summary and selected financial data included or incorporated by reference in the General Disclosure Package,
the Prospectus and each Registration Statement fairly present in all material respects the information shown therein as at the
respective dates and for the respective periods specified and are derived from the consolidated financial statements set forth
or incorporated by reference in the Registration Statement, the Pricing Prospectus and the Prospectus and other financial information.
All information contained in the Registration Statement, the General Disclosure Package and the Prospectus regarding “non-GAAP
financial measures” (as defined in Regulation G) complies with Regulation G and Item 10 of Regulations S-K, to the extent
applicable.
(r) Neither
the Company nor any of the Subsidiaries has sustained, since the date of the latest audited financial statements included or incorporated
by reference in the General Disclosure Package, any material loss or interference with its business from fire, explosion, flood
or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the General Disclosure Package; and, since such date, there has not been any material
change in the capital stock (other than stock option and warrant exercises and stock repurchases in the ordinary course of business)
or long-term debt of the Company or any of the Subsidiaries, or any material adverse changes, or any development involving a prospective
material adverse change, in or affecting the business, assets, management, financial position, prospects, stockholders’
equity or results of operations of the Company and the Subsidiaries taken as a whole, in each case other than as set forth or
contemplated in the General Disclosure Package.
(s) Except
as set forth in the General Disclosure Package, there is no legal or governmental proceeding pending to which the Company or any
of the Subsidiaries is a party or of which any property or assets of the Company or any of the Subsidiaries is the subject which
is required to be described in the Registration Statements, the General Disclosure Package or the Prospectus or a document incorporated
by reference therein and is not described therein, or which, singularly or in the aggregate, if determined adversely to the Company
or any of the Subsidiaries, could reasonably be expected to have a Material Adverse Effect; and to the Company’s knowledge,
no such proceedings are threatened or contemplated by governmental authorities.
(t) Neither
the Company nor any of the Subsidiaries (i) is in violation of its charter or by-laws (or analogous governing instrument, as applicable),
(ii) is in default in any respect, and no event has occurred which, with notice or lapse of time or both, would constitute such
a default, in the due performance or observance of any term, covenant or condition contained in any indenture, mortgage, deed
of trust, loan agreement, lease or other agreement or instrument to which it is a party or by which it is bound or to which any
of its property or assets is subject or (iii) is in violation in any respect of any law, ordinance, governmental rule, regulation
or court order, decree or judgment to which it or its property or assets may be subject except, in the case of clauses (ii) and
(iii) of this paragraph (t), for any violations or defaults which, singularly or in the aggregate, would not have a Material Adverse
Effect.
(u) The
Company and each of the Subsidiaries possess all licenses, certificates, authorizations and permits issued by, and have made all
declarations and filings with, the appropriate local, state, federal or foreign regulatory agencies or bodies, which are necessary
for the ownership of their respective properties or the conduct of their respective businesses as described in the General Disclosure
Package and the Prospectus (collectively, the “Governmental Permits”) except where any failures to possess
or make the same, singularly or in the aggregate, would not have a Material Adverse Effect. The Company and each of the Subsidiaries
is in compliance with all such Governmental Permits; all such Governmental Permits are valid and in full force and effect, except
where the validity or failure to be in full force and effect would not, singularly or in the aggregate, have a Material Adverse
Effect. Neither the Company nor any subsidiary has received written notification of any revocation, modification, suspension,
termination or invalidation (or proceedings related thereto) of any such Governmental Permit.
(v) Neither
the Company nor each of the Subsidiaries is or, after giving effect to the offering of the Stock and the application of the proceeds
thereof as described in the General Disclosure Package and the Prospectus, will be required to register as an “investment
company” within the meaning of the Investment Company Act of 1940, as amended, and the rules and regulations of the Commission
thereunder.
(w) Neither
the Company nor any of its officers, directors or affiliates has taken or will take, directly or indirectly, any action designed
or intended to stabilize or manipulate the price of any security of the Company, or which caused or resulted in, or which might
in the future reasonably be expected to cause or result in, stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Stock in violation of the Securities Act or Exchange Act. The Company acknowledges
that the Underwriters may engage in passive market making transactions in the Common Stock on the NASDAQ Capital Market in accordance
with Regulation M.
(x) The
Company and each of the Subsidiaries owns or possesses (or can acquire on reasonable terms) the right to use all patents, patent
applications, trademarks, trademark registrations, service marks, service mark registrations, Internet domain name registrations,
copyrights, copyright registrations, licenses, trade secret rights, inventions, software, works of authorships, trademarks, service
marks, trade names, databases, formulae, know how, Internet domain names and other intellectual property (including trade secrets
and other unpatented and/or unpatentable proprietary confidential information, systems, or procedures) (collectively, "Intellectual
Property Rights") necessary to conduct their respective businesses as currently conducted, and as currently proposed
to be conducted and described in the General Disclosure Package and the Prospectus, except to the extent the failure to own, possess
or acquire on reasonable terms would not reasonably be expected, singularly or in the aggregate, to have a Material Adverse Effect.
Except as would not reasonably be expected, singularly or in the aggregate, to result in a Material Adverse Effect, and except
as disclosed in the General Disclosure Package and the Prospectus, (i) there are no third parties who have or, to the Company’s
knowledge, will be able to establish rights to any of the Company’s Intellectual Property Rights; (ii) to the Company’s
knowledge, there is no infringement by third parties of any of the Company’s Intellectual Property Rights; (iii) there is
no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by others challenging the Company’s
rights in or to any of the Company’s Intellectual Property Rights, and the Company is unaware of any facts that would form
a reasonable basis for any such action, suit, proceeding or claim; (iv) there is no pending or, to the Company’s knowledge,
threatened action, suit, proceeding or claim by others challenging the validity, enforceability or scope of any of the Company’s
Intellectual Property Rights, and the Company is unaware of any facts that would form a reasonable basis for any such action,
suit, proceeding or claim; and (v) there is no pending or, to the Company’s knowledge, threatened action, suit, proceeding
or claim by others that the Company or any Subsidiary infringes or otherwise violates, or would, upon the commercialization of
products or services described in the General Disclosure Package and the Prospectus as under development and as currently configured,
infringe or violate, any currently issued patent, trademark, tradename, service name, copyright, trade secret or other proprietary
rights of others, and the Company is unaware of any facts that would form a reasonable basis for any such action, suit, proceeding
or claim. Except as would not reasonably be expected, singularly or in the aggregate, to result in a Material Adverse Effect,
all licenses for the use of the Intellectual Property Rights described in the General Disclosure Package and the Prospectus are
valid, binding upon, and enforceable by or against the parties thereto in accordance with their terms. The Company and each of
the Subsidiaries has complied in all material respects with, and is not in breach nor has it received any written notice of any
asserted or threatened claim of breach of any license of Intellectual Property Rights, and the Company has no knowledge of any
breach or anticipated breach by any other person to any license of Intellectual Property Rights. None of the technology employed
by the Company or the Subsidiaries has been obtained or is being used by the Company or any of the Subsidiaries in violation of
any contractual obligation binding on the Company or the Subsidiaries or, to the Company’s knowledge, any of its or the
Subsidiaries’ officers, directors or employees or otherwise in violation of the rights of any persons, except in each case
for such violations as would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.
(y) The
Company and the Subsidiaries have valid title to, or have valid rights to lease or otherwise use, all items of real or personal
property which are material to the business of the Company and the Subsidiaries taken as a whole, in each case free and clear
of all liens, encumbrances, security interests, claims and defects other than those that do not, singularly or in the aggregate,
materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such
property by the Company or the Subsidiaries; and all of the leases and subleases material to the business of the Company and the
Subsidiaries, considered as one enterprise, and under which the Company or any of the Subsidiaries holds properties described
in the General Disclosure Package and the Prospectus, are in full force and effect, and neither the Company nor any Subsidiary
has received any written notice of any material claim (i) adverse to the rights of the Company or any Subsidiary under any of
the leases or subleases mentioned above, or (ii) affecting or questioning the rights of the Company or such Subsidiary to the
continued possession of the leased or subleased premises under any such lease or sublease.
(z) There
is (A) no significant unfair labor practice complaint pending against the Company nor to the knowledge of the Company, threatened
against it, before the National Labor Relations Board, any state or local labor relation board or any foreign labor relations
board, and no significant grievance or significant arbitration proceeding arising out of or under any collective bargaining agreement
is so pending against the Company or the Subsidiaries, or, to the knowledge of the Company, threatened against it or any of the
Subsidiaries and (B) no labor disturbance by the employees of the Company or the Subsidiaries exists or, to the Company’s
knowledge, is imminent, and the Company is not aware of any existing or imminent labor disturbance by the employees of any of
its or any Subsidiary’s principal suppliers, manufacturers, customers or contractors, that could reasonably be expected,
singularly or in the aggregate, to have a Material Adverse Effect. The Company is not aware that any key employee or significant
group of employees of the Company or any of the Subsidiaries plans to terminate employment with the Company or any such Subsidiary.
(aa) No
“prohibited transaction” (as defined in Section 406 of the Employee Retirement Income Security Act of 1974, as amended,
including the regulations and published interpretations thereunder (“ERISA”), or Section 4975 of the Internal
Revenue Code of 1986, as amended from time to time (the “Code”)) or “accumulated funding deficiency”
(as defined in Section 302 of ERISA) or any of the events set forth in Section 4043(b) of ERISA (other than events with respect
to which the thirty (30)-day notice requirement under Section 4043 of ERISA has been waived) has occurred or could reasonably
be expected to occur with respect to any employee benefit plan of the Company which could, singularly or in the aggregate, have
a Material Adverse Effect. Each employee benefit plan of the Company or is in compliance in all material respects with applicable
law, including ERISA and the Code. The Company has not incurred and could not reasonably be expected to incur liability under
Title IV of ERISA with respect to the termination of, or withdrawal from, any pension plan (as defined in ERISA). Each pension
plan for which the Company would have any liability that is intended to be qualified under Section 401(a) of the Code is so qualified
in all material respects, and nothing has occurred, whether by action or by failure to act, which could, singularly or in the
aggregate, cause the loss of such qualification.
(bb) The
Company and the Subsidiaries are in compliance with all foreign, federal, state and local rules, laws and regulations relating
to the use, treatment, storage and disposal of hazardous or toxic substances or waste and protection of health and safety or the
environment which are applicable to the Company’s business (“Environmental Laws”) except where such noncompliance
with Environmental Laws would not, individually or in the aggregate, have a Material Adverse Effect. There has been no storage,
generation, transportation, handling, treatment, disposal, discharge, emission, or other release of any kind of toxic or other
wastes or other hazardous substances by, due to, or caused by the Company or the Subsidiaries (or, to the Company’s knowledge,
any other entity for whose acts or omissions the Company or any of the Subsidiaries is or may otherwise be liable) upon any of
the property now or previously owned or leased by the Company or any of the Subsidiaries, or upon any other property, in violation
of any law, statute, ordinance, rule, regulation, order, judgment, decree or permit or which would, under any law, statute, ordinance,
rule (including rule of common law), regulation, order, judgment, decree or permit, give rise to any liability except where such
noncompliance with such laws, failure to receive required permits, licenses or other approvals or failure to comply with the terms
and conditions of such permits, licenses or approvals would not, individually or in the aggregate, have a Material Adverse Effect;
and there has been no disposal, discharge, emission or other release of any kind onto such property or into the environment surrounding
such property of any toxic or other wastes or other hazardous substances with respect to which the Company or the Subsidiaries
has knowledge.
(cc) The
Company and the Subsidiaries each (i) have timely filed all necessary federal, state, local and foreign tax returns (or timely
filed applicable extensions therefor) that have been required to be filed, and all such returns were true, complete and correct,
(ii) have paid all federal, state, local and foreign taxes, assessments, governmental or other charges due and payable for which
they are liable, including, without limitation, all sales and use taxes and all taxes which the Company is obligated to withhold
from amounts owing to employees, creditors and third parties, and (iii) do not have any tax deficiency or claims outstanding or
assessed or, to their knowledge, proposed against any of them, except those, in each of the cases described in clauses (i), (ii)
and (iii) of this paragraph (cc), that would not, singularly or in the aggregate, have a Material Adverse Effect. The accruals
and reserves on the books and records of the Company in respect of tax liabilities for any taxable period not yet finally determined
are adequate to meet any assessments and related liabilities for any such period, and since the date of the last audited balance
sheet, the Company and the Subsidiaries have not incurred any liability for taxes other than in the ordinary course.
(dd) The
Company and the Subsidiaries carry, or are covered by, insurance in such amounts and covering such risks as is adequate for the
conduct of the business of the Company taken as a whole and the value of the Company and the Subsidiaries’ properties taken
as a whole. Neither the Company nor any of the Subsidiaries has any reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to
continue its business at a cost that would not have a Material Adverse Effect. All policies of insurance owned by the Company
or any of the Subsidiaries are, to the Company’s knowledge, in full force and effect and the Company and each of the Subsidiaries
is in compliance with the terms of such policies. Neither the Company nor any of the Subsidiaries has received written notice
from any insurer, agent of such insurer or the broker of the Company or such Subsidiary that any material capital improvements
or any other material expenditures (other than premium payments) are required or necessary to be made in order to continue such
insurance. Neither the Company nor any of the Subsidiaries insures risk of loss through any captive insurance, risk retention
group, reciprocal group or by means of any fund or pool of assets specifically set aside for contingent liabilities other than
as described in the General Disclosure Package.
(ee) The
Company maintains a system of internal control over financial reporting (as such term is defined in Rule 13a-15 of the General
Rules and Regulations under the Exchange Act (the “Exchange Act Rules”)) that complies with the requirements
of the Exchange Act and has been designed by the Company’s principal executive officer and principal financial officer,
or under their supervision, to provide reasonable assurances that (i) transactions are executed in accordance with management’s
general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements
in conformity with GAAP and to maintain accountability for assets; (iii) access to assets is permitted only in accordance with
management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with existing
assets at reasonable intervals and appropriate action is taken with respect to any differences. Except as described in the General
Disclosure Package, since the end of the Company’s most recent audited fiscal year, there has been (A) no material weakness
in the Company’s internal control over financial reporting (whether or not remediated) and (B) no change in the Company’s
internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s
internal control over financial reporting. The Company’s internal control over financial reporting is, or upon consummation
of the offering of the Stock will be, overseen by the Audit Committee of the Board of Directors of the Company (the “Audit
Committee”) in accordance with the Exchange Act Rules.
(ff) [Intentionally
Omitted].
(gg) [Intentionally
Omitted].
(hh) The
Company maintains disclosure controls and procedures (as such is defined in Rule 13a-15 of the Exchange Act Rules) that comply
with the requirements of the Exchange Act; such disclosure controls and procedures have been designed to ensure that information
required to be disclosed by the Company is accumulated and communicated to the Company’s management, including the Company’s
principal executive officer and principal financial officer by others within those entities, such disclosure controls and procedures
are effective in all material respects to perform the functions for which they were established.
(ii) The
minute books of the Company and the Subsidiaries have been made available to the Representative and counsel for the Underwriters,
and such books (i) contain a complete summary of all meetings and actions of the board of directors (including each board committee)
and shareholders of the Company (or analogous governing bodies and interest holders, as applicable) since January 1, 2013 through
the date of the latest meeting and action, and (ii) accurately in all material respects reflect all transactions referred to in
such minutes.
(jj) There
is no lease, contract, or other agreement or document required by the Securities Act or by the Rules and Regulations to be described
in the General Disclosure Package and in the Prospectus or a document incorporated by reference therein or to be filed as an exhibit
to the Registration Statements or a document incorporated by reference therein which is not so described or filed therein as required;
and all descriptions of any such leases, contracts, or other agreements or documents contained in the General Disclosure Package
and in the Prospectus or in a document incorporated by reference therein are accurate and complete descriptions of such documents
in all material respects. Other than as described in the General Disclosure Package, no lease, contract or other agreement has
been suspended or terminated for convenience or default by the Company or any of the other parties thereto, and neither the Company
nor any of the Subsidiaries has received notice of and the Company does not have knowledge of any such pending or threatened suspension
or termination except for such suspensions or terminations or pending or threatened suspensions or terminations that would not
reasonably be expected to, singularly or in the aggregate, have a Material Adverse Effect.
(kk) No
relationship, direct or indirect, exists between or among the Company on the one hand, and the directors, officers, stockholders
(or analogous interest holders), customers or suppliers of the Company or any of its affiliates on the other hand, which is required
to be described in the General Disclosure Package and the Prospectus or a document incorporated by reference therein and which
is not so described.
(ll) No
person or entity has the right to require registration of shares of Common Stock or other securities of the Company because of
the filing or effectiveness of the Registration Statements or otherwise, except for (i) persons and entities who have expressly
waived such right in writing or who have been given timely and proper written notice and have failed to exercise such right within
the time or times required under the terms and conditions of such right, or (ii) persons and entities who are eligible to sell
shares pursuant to Rule 144(b)(1) of the Securities Act without restriction. Except as described in the General Disclosure Package,
there are no persons with registration rights or similar rights to have any securities registered by the Company under the Securities
Act that could reasonably be expected, singularly or in the aggregate, to have a Material Adverse Effect.
(mm) The
Company does not own any “margin securities” as that term is defined in Regulation U of the Board of Governors of
the Federal Reserve System (the “Federal Reserve Board”), and none of the proceeds of the sale of the Stock
will be used, directly or indirectly, for the purpose of purchasing or carrying any margin security, for the purpose of reducing
or retiring any indebtedness which was originally incurred to purchase or carry any margin security or for any other purpose which
might cause any of the Stock to be considered a “purpose credit” within the meanings of Regulation T, U or X of the
Federal Reserve Board.
(nn) Except
as described in the General Disclosure Package, neither the Company nor any of the Subsidiaries is a party to any contract, agreement
or understanding with any person that would give rise to a valid claim against the Company or the Underwriters for a brokerage
commission, finder’s fee or like payment in connection with the offering and sale of the Stock or any transaction contemplated
by this Agreement, the Registration Statements, the General Disclosure Package or the Prospectus.
(oo) All
grants of options were validly issued and properly approved by the board of directors of the Company (or a duly authorized committee
thereof) in material compliance with all applicable laws and regulations and recorded in the Company’s financial statements
in accordance with GAAP.
(pp) Except
as described in the General Disclosure Package and the Prospectus, no subsidiary of the Company is currently prohibited, directly
or indirectly, under any agreement or other instrument to which it is a party or is subject, from paying any dividends to the
Company, from making any other distribution on such subsidiary’s capital stock, from repaying to the Company any loans or
advances to such subsidiary from the Company or from transferring any of such subsidiary’s properties or assets to the Company
or any other subsidiary of the Company.
(qq) Since
the date as of which information is given in the General Disclosure Package and the Prospectus through the date hereof, and except
as set forth in the Pricing Prospectus, the Company has not (i) issued or granted any securities other than options or warrants
to purchase Common Stock pursuant to the Company’s stock option plan or securities issued upon exercise of stock options
in the ordinary course of business, (ii) incurred any material liability or obligation, direct or contingent, other than liabilities
and obligations which were incurred in the ordinary course of business, (iii) entered into any material transaction other than
in the ordinary course of business or (iv) declared or paid any dividend on its capital stock.
(rr) The
Company is not a Passive Foreign Investment Company (“PFIC”) within the meaning of Section 1296 of the United
States Internal Revenue Code of 1966.
(ss) No
forward-looking statement (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act) contained
in either the General Disclosure Package or the Prospectus has been made or reaffirmed without a reasonable basis or has been
disclosed other than in good faith.
(tt) Neither
the Company nor any of the Subsidiaries does business with the government of Cuba or with any person or affiliate located in Cuba
within the meaning of Florida Statutes Section 517.075.
(uu) The
Company is subject to and in compliance in all material respects with the reporting requirements of Section 13 or Section 15(d)
of the Exchange Act. The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act and is listed on the
NASDAQ Capital Market, and except as described in the General Disclosure Package, the Company has taken no action designed to,
or reasonably likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act or delisting
the Common Stock from the NASDAQ Capital Market, nor has the Company received any notification that the Commission or the NASDAQ
Capital Market is contemplating terminating such registration or listing.
(vv) The
Company is in compliance in all material respects with all applicable provisions of the Sarbanes Oxley Act of 2002 and all rules
and regulations promulgated thereunder or implementing the provisions thereof (the “Sarbanes Oxley Act”) that
are in effect.
(ww) [Intentionally
Omitted].
(xx) Neither
the Company nor any of the Subsidiaries nor, to the Company’s knowledge, any employee or agent of the Company or any subsidiary,
has while acting on behalf of the Company (i) used any corporate funds for unlawful contributions, gifts, entertainment or other
unlawful expenses relating to political activity, (ii) made any unlawful payment to foreign or domestic government officials or
employees or to foreign or domestic political parties or campaigns from corporate funds, (iii) violated any provision of the Foreign
Corrupt Practices Act of 1977, as amended or (iv) made any other unlawful payment.
(yy) There
are no transactions, arrangements or other relationships between and/or among the Company, any of its affiliates (as such term
is defined in Rule 405 of the Rules and Regulations) and any unconsolidated entity, including, but not limited to, any structured
finance, special purpose or limited purpose entity that could reasonably be expected to materially affect the Company’s
liquidity or the availability of or requirements for its capital resources required to be described in the General Disclosure
Package and the Prospectus or a document incorporated by reference therein which have not been described as required.
(zz) There
are no outstanding loans, advances (except normal advances for business expenses in the ordinary course of business) or guarantees
of indebtedness by the Company or the Subsidiaries to or for the benefit of any of the officers or directors of the Company, any
of the Subsidiaries or any of their respective family members, except as disclosed in the Registration Statements, the General
Disclosure Package and the Prospectus. All transactions by the Company with office holders or control persons of the Company have
been duly approved by the board of directors of the Company, or duly appointed committees or officers thereof, if and to the extent
required under U.S. law.
(aaa) The
statistical and market related data included in the Registration Statement, the General Disclosure Package and the Prospectus
are based on or derived from sources that the Company believes to be reliable and accurate in all material respects, and such
data agree in all material respects with the sources from which they are derived.
(bbb) The
operations of the Company and the Subsidiaries are and have been conducted at all times in compliance in all material respects
with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970,
as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the “Money
Laundering Laws”), and no action, suit or proceeding by or before any court or governmental agency, authority or body
or any arbitrator involving the Company or any of the Subsidiaries with respect to the Money Laundering Laws is pending, or to
the Company’s knowledge, threatened.
(ccc) Neither
the Company nor any of the Subsidiaries nor, to the Company’s knowledge, any director, officer, agent, employee or affiliate
of the Company or any of the Subsidiaries is currently subject to any U.S. sanctions administered by the Office of Foreign Assets
Control of the U.S. Treasury Department (“OFAC”); and the Company will not directly or indirectly use the proceeds
of the offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other
person or entity, for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered
by OFAC.
(ddd) Neither
the Company nor, to the Company’s knowledge, any of its affiliates (within the meaning of FINRA Rule 5121(f)(1)) directly
or indirectly controls, is controlled by, or is under common control with, or is an associated person (within the meaning of Article
I, Section 1(ee) of the By-laws of FINRA) of, any member firm of FINRA.
Any
certificate signed by or on behalf of the Company and delivered to the Representative or to counsel for the Underwriters shall
be deemed to be a representation and warranty by the Company to the Underwriters as to the matters covered thereby.
3. Purchase,
Sale and Delivery of Offered Securities. On the basis of the representations, warranties and agreements herein contained,
but subject to the terms and conditions herein set forth, the Company agrees to sell to the Underwriters, and each Underwriter
agrees, severally and not jointly, to purchase from the Company, that number of shares of Stock (rounded up or down, as determined
by C-H in its discretion, in order to avoid fractions) obtained by multiplying 3,200,000 shares of Stock by a fraction the numerator
of which is the number of shares of Stock set forth opposite the name of such Underwriter in Schedule I hereto and
the denominator of which is the total number of shares of Stock.
The
purchase price per share to be paid by the Underwriters to the Company for the Stock will be $1.786 per share (the “Purchase
Price”).
The
Company will deliver the Stock to the Representative for the respective accounts of the several Underwriters, through the facilities
of The Depository Trust Company, in each such case, issued in such names and in such denominations as the Representative may direct
by notice in writing to the Company given at or prior to 12:00 Noon, New York time, on the second (2nd) full business
day preceding the Closing Date against payment of the aggregate Purchase Price therefor by wire transfer in federal (same day)
funds to an account at a bank acceptable to the Representative payable to the order of the Company for the Stock sold by it at
the offices of Ellenoff Grossman & Schole LLP, 1345 Avenue of the Americas, New York, New York. Time shall be of the essence,
and delivery at the time and place specified pursuant to this Agreement is a further condition of the obligations of each Underwriter
hereunder. The time and date of the delivery and closing shall be at 10:00 A.M., New York time, on October 13, 2015, in accordance
with Rule 15c6-1 of the Exchange Act. The time and date of such payment and delivery are herein referred to as the “Closing
Date”. The Closing Date and the location of delivery of, and the form of payment for, the Stock may be varied by agreement
among the Company and the Representative.
The
several Underwriters propose to offer the Stock for sale upon the terms and conditions set forth in the Prospectus.
4. Further
Agreements Of The Company
(I) Further
Agreements Of The Company. The Company agrees with the several Underwriters:
(a) To
prepare the Rule 462(b) Registration Statement, if necessary, in a form approved by the Representative and file such Rule 462(b)
Registration Statement, if necessary, with the Commission by 10:00 P.M., New York time, on the date hereof, and the Company shall
at the time of filing either pay to the Commission the filing fee for the Rule 462(b) Registration Statement or give irrevocable
instructions for the payment of such fee pursuant to Rule 111 under the Rules and Regulations; to prepare the Prospectus in a
form approved by the Representative containing information previously omitted at the time of effectiveness of the Registration
Statement in reliance on Rules 430A, 430B or 430C of the Rules and Regulations and to file such Prospectus pursuant to Rule 424(b)
of the Rules and Regulations not later than the second business (2nd) day following the execution and delivery of this
Agreement or, if applicable, such earlier time as may be required by Rule 430A of the Rules and Regulations prior to the expiration
of the Prospectus Delivery Period (as defined below); to notify the Representative promptly of the Company’s intention to
file or prepare any supplement or amendment to any Registration Statement or to the Prospectus and to make no amendment or supplement
to the Registration Statements, the General Disclosure Package or to the Prospectus to which the Representative shall reasonably
object by notice to the Company after a reasonable period to review prior to the expiration of the Prospectus Delivery Period;
to advise the Representative, promptly after it receives notice thereof, of the time when any amendment to any Registration Statement
has been filed or becomes effective or any supplement to the General Disclosure Package or the Prospectus or any amended Prospectus
has been filed and to furnish the Representative with copies thereof; to file promptly all material required to be filed by the
Company with the Commission pursuant to Rules 433(d) or 163(b)(2) of the Rules and Regulations, as the case may be; to file promptly
all reports and any definitive proxy or information statements required to be filed by the Company with the Commission pursuant
to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of the Prospectus and for so long as the delivery
of a prospectus (or in lieu thereof, the notice referred to in Rule 173(a) of the Rules and Regulations) is required in connection
with the offering or sale of the Stock (the “Prospectus Delivery Period”); prior to the expiration of the Prospectus
Delivery Period to advise the Representative, promptly after it receives notice thereof, of the issuance by the Commission of
any stop order or of any order preventing or suspending the use of any Preliminary Prospectus, any Issuer Free Writing Prospectus
or the Prospectus, of the suspension of the qualification of the Stock for offering or sale in any jurisdiction, of the initiation
or threatening of any proceeding for any such purpose, or of any request by the Commission for the amending or supplementing of
the Registration Statements, the General Disclosure Package or the Prospectus or for additional information; and, in the event
of the issuance of any stop order or of any order preventing or suspending the use of any Preliminary Prospectus, any Issuer Free
Writing Prospectus or the Prospectus or suspending any such qualification, and promptly to use its reasonable best efforts to
obtain the withdrawal of such order.
(b) The
Company represents and agrees that, unless it obtains the prior consent of the Representative, and each Underwriter represents
and agrees that, unless it obtains the prior consent of the Company and the Representative, it has not made and will not make
any offer relating to the Stock that would constitute a “free writing prospectus” as defined in Rule 405 of the Rules
and Regulations (each, a “Permitted Free Writing Prospectus”); provided that the prior written consent
of the Representative hereto shall be deemed to have been given in respect of the Issuer Free Writing Prospectus(es) included
in Schedule III hereto. The Company represents that it has treated and agrees that it will treat each Permitted Free Writing
Prospectus as an Issuer Free Writing Prospectus, comply with the requirements of Rules 164 and 433 of the Rules and Regulations
applicable to any Issuer Free Writing Prospectus, including the requirements relating to timely filing with the Commission, legending
and record keeping and will not take any action that would result in an Underwriter or the Company being required to file with
the Commission pursuant to Rule 433(d) of the Rules and Regulations a free writing prospectus prepared by or on behalf of such
Underwriter that such Underwriter otherwise would not have been required to file thereunder.
(c) [Intentionally
Omitted].
(d) If
at any time while a prospectus relating to the Stock is required to be delivered (or in lieu thereof, the notice referred to in
Rule 173(a) of the Rules and Regulations) any event occurs or condition exists as a result of which the Prospectus as then amended
or supplemented would include any untrue statement of a material fact, or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were made when the Prospectus is delivered (or in lieu thereof,
the notice referred to in Rule 173(a) of the Rules and Regulations), not misleading, or if it is necessary at any time to amend
or supplement any Registration Statement or the Prospectus or to file under the Exchange Act any document incorporated by reference
in the Prospectus to comply with the Securities Act or the Exchange Act, that the Company will promptly notify the Representative
thereof and upon its request will prepare an appropriate amendment or supplement or upon its request make an appropriate filing
pursuant to Section 13 or 14 of the Exchange Act in form and substance reasonably satisfactory to the Representative, which
will correct such statement or omission or effect such compliance and will use its reasonable best efforts to have any amendment
to any Registration Statement declared effective as soon as possible. The Company will furnish without charge to each Underwriter
and to any dealer in securities as many copies as the Representative may from time to time reasonably request of such amendment
or supplement. In case any Underwriter is required to deliver a prospectus (or in lieu thereof, the notice referred to in Rule
173(a) of the Rules and Regulations) relating to the Stock, the Company upon the request of the Representative will prepare promptly
an amended or supplemented Prospectus as may be necessary to permit compliance with the requirements of Section 10(a)(3) of the
Securities Act and deliver to such Underwriter as many copies as the Representative may reasonably request of such amended or
supplemented Prospectus complying with Section 10(a)(3) of the Securities Act.
(e) If
the General Disclosure Package is being used to solicit offers to buy the Stock at a time when the Prospectus is not yet available
to prospective purchasers and any event shall occur as a result of which, in the judgment of the Company or in the reasonable
opinion of the Representative, it becomes necessary to amend or supplement the General Disclosure Package in order to make the
statements therein, in the light of the circumstances under which they were made, not misleading, or to make the statements therein
not conflict with the information contained or incorporated by reference in the Registration Statement then on file and not superseded
or modified, or if it is necessary at any time to amend or supplement the General Disclosure Package to comply with any law, the
Company promptly will either (i) prepare, file with the Commission (if required) and furnish to the Underwriters an appropriate
amendment or supplement to the General Disclosure Package or (ii) prepare and file with the Commission an appropriate filing under
the Exchange Act which shall be incorporated by reference in the General Disclosure Package so that the General Disclosure Package
as so amended or supplemented will not, in the light of the circumstances under which they were made, be misleading or conflict
with the Registration Statement then on file, or so that the General Disclosure Package will comply with law.
(f) If
at any time following issuance of an Issuer Free Writing Prospectus there occurred or occurs an event or development as a result
of which such Issuer Free Writing Prospectus conflicted or will conflict with the information contained in the Registration Statement,
Pricing Prospectus or Prospectus, including any document incorporated by reference therein and any prospectus supplement deemed
to be a part thereof and not superseded or modified or included or would include an untrue statement of a material fact or omitted
or would omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading, the Company has promptly notified or will promptly
notify the Representative so that any use of the Issuer Free Writing Prospectus may cease until it is amended or supplemented
and has promptly amended or will promptly amend or supplement, at its own expense, such Issuer Free Writing Prospectus to eliminate
or correct such conflict, untrue statement or omission. The foregoing sentence does not apply to statements in or omissions from
any Issuer Free Writing Prospectus in reliance upon, and in conformity with, written information furnished to the Company through
the Representative by or on behalf of any Underwriter specifically for inclusion therein, which information the parties hereto
agree is limited to the Underwriters’ Information (as defined in Section 17).
(g) To
the extent not available on the Commission’s Electronic Data Gathering, Analysis and Retrieval system or any successor system
(“EDGAR”), to furnish promptly to the Representative and to counsel for the Underwriters a signed copy of each
of the Registration Statements as originally filed with the Commission, and of each amendment thereto filed with the Commission,
including all consents and exhibits filed therewith.
(h) To
deliver promptly to the Representative such number of the following documents as the Representative shall reasonably request:
(i) conformed copies of the Registration Statements as originally filed with the Commission (in each case excluding exhibits),
(ii) each Preliminary Prospectus, if any, (iii) any Issuer Free Writing Prospectus, (iv) the Prospectus (the delivery of the documents
referred to in clauses (i), (ii), (iii) and (iv) of this paragraph (h) to be made not later than 10:00 A.M., New York time, on
the business day following the execution and delivery of this Agreement), (v) conformed copies of any amendment to the Registration
Statement (excluding exhibits), (vi) any amendment or supplement to the General Disclosure Package or the Prospectus after the
date hereof (the delivery of the documents referred to in clauses (v) and (vi) of this paragraph (h) to be made not later than
10:00 A.M., New York City time, on the business day following the date of such amendment or supplement) and (vii) any document
incorporated by reference in the General Disclosure Package or the Prospectus (excluding exhibits thereto) (the delivery of the
documents referred to in clause (vi) of this paragraph (h) to be made not later than 10:00 A.M., New York City time, on the business
day following the date of such document) provided, however, that filing with the Commission on EDGAR shall constitute delivery
to the Representative.
(i) To
make generally available to its shareholders as soon as practicable, but in any event not later than sixteen (16) months after
the effective date of each Registration Statement (as defined in Rule 158(c) of the Rules and Regulations), an earnings statement
of the Company and the Subsidiaries (which need not be audited) complying with Section 11(a) of the Securities Act and the Rules
and Regulations (including, at the option of the Company, Rule 158).
(j) To
take promptly from time to time such actions as the Representative may reasonably request to qualify the Stock for offering and
sale under the securities or Blue Sky laws of such jurisdictions (domestic or foreign) as the Representative may designate and
to continue such qualifications in effect, and to comply with such laws, for so long as required to permit the offer and sale
of Stock in such jurisdictions; provided that the Company and the Subsidiaries shall not be obligated to qualify as foreign
corporations in any jurisdiction in which they are not so qualified or to file a general consent to service of process in any
jurisdiction.
(k) Upon
request, during the period of three (3) years from the date hereof, to deliver to each of the Underwriters, (i) as soon as they
are available, copies of all reports or other communications furnished to shareholders generally, and (ii) as soon as they are
available, copies of any reports and financial statements furnished or filed with the Commission or any national securities exchange
on which the Stock is listed. However, so long as the Company is subject to the reporting requirements of either Section 13 or
Section 15(d) of the Exchange Act and is timely filing reports on EDGAR, the Company is not required to deliver such reports or
statements to the Underwriters.
(l) That
the Company will not, for a period of ninety (90) days from the date of this Agreement, (the “Lock-Up Period”)
without the prior written consent of the Representative, directly or indirectly offer, sell, assign, transfer, pledge, contract
to sell, or otherwise dispose of, any shares of Common Stock or any securities convertible into or exercisable or exchangeable
for Common Stock, other than (1) the Company’s sale of the Stock hereunder, (2) the issuance of Common Stock, options to
acquire Common Stock or other equity awards pursuant to the Company’s employee benefit plans, qualified stock option plans,
employee stock option purchase plans or other employee compensation plans as such plans are in existence on the date hereof and
described in the Prospectus, (3) the issuance of Common Stock, options to acquire Common Stock or other equity awards pursuant
to the Company’s employee benefit plans, qualified stock option plans, employee stock option purchase plans, equity incentive
plans, or other employee compensation plans as the Company may adopt after the date hereof, provided that any such new employee
benefit plan satisfies the transaction requirements of General Instruction A.1 of Form S-8 under the Securities Act, (4) the issuance
of Common Stock pursuant to the valid exercises, vesting or settlements of options, warrants or rights outstanding on the date
hereof, and (5) the issuance of Common Stock pursuant to the valid conversion of Preferred Stock of the Company or convertible
securities of the Company outstanding on the date hereof. The Company will cause each person or entity listed in Exhibit B
to furnish to the Representative, prior to the Closing Date, a letter, substantially in the form of Exhibit A hereto.
The Company also agrees that during such period, other than for the sale of the Stock hereunder, the Company will not file any
registration statement, preliminary prospectus or prospectus, or any amendment or supplement thereto, under the Securities Act
for any such transaction or which registers, or offers for sale, Common Stock or any securities convertible into or exercisable
or exchangeable for Common Stock, except for a registration statement on Form S-8 relating to employee benefit plans. The Company
hereby agrees that (i) if it issues an earnings release or material news, or if a material event relating to the Company occurs,
during the last seventeen (17) days of the Lock-Up Period, or (ii) if prior to the expiration of the Lock-Up Period, the Company
announces that it will release earnings results during the sixteen (16)-day period beginning on the last day of the Lock-Up Period,
the restrictions imposed by this paragraph (l) shall continue to apply until the expiration of the eighteen (18)-day period beginning
on the issuance of the earnings release or the occurrence of the material news or material event. The Company will provide the
Representative with prior notice (in accordance with Section 13 herein) of any such announcement that gives rise to an extension
of the Lock-Up Period, subject to the Representative’s agreement to hold such information in confidence prior to public
disclosure of the same.
(m) To
supply the Representative with copies of all correspondence to and from, and all documents issued to and by, the Commission in
connection with the registration of the Stock under the Securities Act or any of the Registration Statements, any Preliminary
Prospectus or the Prospectus, or any amendment or supplement thereto or document incorporated by reference therein.
(n) [Intentionally
Omitted].
(o) Prior
to the Closing Date, not to issue any press release or other communication directly or indirectly or hold any press conference
with respect to the Company, its condition, financial or otherwise, or earnings, business affairs or business prospects (except
for routine oral marketing communications in the ordinary course of business and consistent with the past practices of the Company
and of which the Representative is notified), without the prior written consent of the Representative, unless in the judgment
of the Company and its counsel, and after notification to the Representative, such press release or communication is required
by law.
(p) Until
the Representative shall have notified the Company of the completion of the resale of the Stock, that the Company will not, and
will use its reasonable best efforts to cause its affiliated purchasers (as defined in Regulation M under the Exchange Act) not
to, either alone or with one or more other persons, bid for or purchase, for any account in which it or any of its affiliated
purchasers has a beneficial interest, any Stock, or attempt to induce any person to purchase any Stock; and not to, and to use
its reasonable best efforts to cause its affiliated purchasers not to, make bids or purchase for the purpose of creating actual,
or apparent, active trading in or of raising the price of the Stock.
(q) To
use its reasonable best efforts not to take any action prior to the Closing Date which would require the Prospectus to be amended
or supplemented pursuant to Section 4(I)(d).
(r) To
at all times comply with all applicable provisions of the Sarbanes Oxley Act in effect from time to time.
(s) To
maintain, at its expense, a registrar and transfer agent for the Stock.
(t) To
apply the net proceeds from the sale of the Stock as set forth in the Registration Statement, the General Disclosure Package and
the Prospectus under the heading “Use of Proceeds,” and except as disclosed in the General Disclosure Package, the
Company does not intend to use any of the proceeds from the sale of the Stock hereunder to repay any outstanding debt owed to
any affiliate of any Underwriter. The Company shall manage its affairs and investments in such a manner as not to be or become
an “investment company” within the meaning of the Investment Company Act and the rules and regulations thereunder.
(u) To
use its reasonable best efforts to maintain the listing of the Stock on the NASDAQ Capital Market or another national securities
exchange.
(v) To
use its reasonable best efforts to do and perform all things required to be done or performed under this Agreement by the Company
prior to the Closing Date and to satisfy all conditions precedent to the delivery of the Stock.
(w) Upon
request of the Representative, to furnish, or cause to be furnished, to each Underwriter an electronic version of the Company’s
corporate logo for use on the website, if any, operated by such Underwriter for the purpose of facilitating the on-line offering
of the Stock (the “License”); provided, however that the License shall be used solely for the purpose
described above, is granted without any fee and may not be assigned or transferred.
5. Payment
of Expenses. The Company agrees to pay, or reimburse if paid by any Underwriter, whether or not the transactions contemplated
hereby are consummated or this Agreement is terminated: (a) the costs incident to the authorization, issuance, sale, preparation
and delivery of the Stock and any taxes payable in that connection; (b) the costs incident to the registration of the Stock under
the Securities Act; (c) the costs incident to the preparation, printing and distribution of the Registration Statements, the Base
Prospectus, any Preliminary Prospectus, any Issuer Free Writing Prospectus, the General Disclosure Package, the Prospectus, any
amendments, supplements and exhibits thereto or any document incorporated by reference therein and the costs of printing, reproducing
and distributing this Agreement and any closing documents by mail, telex or other means of communications; (d) the fees and expenses
(including related fees and expenses of counsel for the Underwriters) incurred in connection with securing any required review
by FINRA of the terms of the sale of the Stock and any filings made with FINRA; (e) any applicable listing or other fees; (f)
the fees and expenses (including related fees and expenses of counsel to the Underwriters) of qualifying the Stock under the securities
laws of the several jurisdictions as provided in Section 4(I)(j)) and of preparing, printing and distributing wrappers, Blue Sky
Memoranda and Legal Investment Surveys; (g) the cost of preparing and printing stock certificates; (h) all fees and expenses of
the registrar and transfer agent of the Stock; (i) the fees, disbursements and expenses of counsel to the Underwriters, (j) the
costs and expenses of the Company relating to investor presentations on any “road show” undertaken in connection with
the marketing of the offering of the Stock, including, without limitation, expenses associated with the preparation or dissemination
of any electronic road show, expenses associated with the production of road show slides and graphics, fees and expenses of any
consultants engaged in connection with the road show presentations with the prior approval of the Company, travel and lodging
expenses of the officers of the Company and such consultants, including the cost of any aircraft chartered in connection with
the road show, and (k) all other costs and expenses incident to the offering of the Stock or the performance of the obligations
of the Company under this Agreement (including, without limitation, the fees, costs, expenses or disbursements of the Company’s
counsel and the Company’s independent accountants); provided that the Company shall not be liable for and shall not
be obligated to pay any such fees, costs, expenses or disbursements to the Underwriters for out-of-pocket expenses (including
fees, costs, expenses or disbursements for the Underwriters’ counsel) in excess of $100,000 in the aggregate (subject to
reduction to comply with the rules and regulations of FINRA); and provided further, except to the extent otherwise provided
in this Section 5 and in Section 9, the Underwriters shall pay their own costs and expenses, including the fees and expenses of
their counsel, any transfer taxes on the resale of any Stock by them and the expenses of advertising any offering of the Stock
made by the Underwriters.
6. Conditions
of Underwriters’ Obligations. The respective obligations of the several Underwriters hereunder are subject to
the accuracy, when made and as of the Applicable Time and on the Closing Date, of the representations and warranties of the Company
contained herein, to the accuracy of the statements of the Company made in any certificates pursuant to the provisions hereof,
to the performance by the Company of its obligations hereunder, and to each of the following additional terms and conditions:
(a) The
Registration Statements have become effective under the Securities Act, and no stop order suspending the effectiveness of any
Registration Statement or any part thereof, preventing or suspending the use of any Base Prospectus, any Preliminary Prospectus,
the Prospectus or any Permitted Free Writing Prospectus or any part thereof shall have been issued and no proceedings for that
purpose or pursuant to Section 8A under the Securities Act shall have been initiated or threatened by the Commission, and all
requests for additional information on the part of the Commission (to be included or incorporated by reference in the Registration
Statements or the Prospectus or otherwise) shall have been complied with to the reasonable satisfaction of the Representative;
the Rule 462(b) Registration Statement, if any, each Issuer Free Writing Prospectus and the Prospectus shall have been filed with,
the Commission within the applicable time period prescribed for such filing by, and in compliance with, the Rules and Regulations
and in accordance with Section 4(I)(a), and the Rule 462(b) Registration Statement, if any, shall have become effective immediately
upon its filing with the Commission; and FINRA shall have raised no objection to the fairness and reasonableness of the terms
of this Agreement or the transactions contemplated hereby.
(b) None
of the Underwriters shall have discovered and disclosed to the Company on or prior to such Closing Date that any Registration
Statement or any amendment or supplement thereto contains an untrue statement of a fact which, in the opinion of counsel for the
Underwriters, is material or omits to state any fact which, in the opinion of such counsel, is material and is required to be
stated therein or is necessary to make the statements therein not misleading, or that the General Disclosure Package, any Issuer
Free Writing Prospectus or the Prospectus or any amendment or supplement thereto contains an untrue statement of fact which, in
the opinion of such counsel, is material or omits to state any fact which, in the opinion of such counsel, is material and is
necessary in order to make the statements, in the light of the circumstances in which they were made, not misleading.
(c) All
corporate proceedings incident to the authorization, form and validity of each of this Agreement, the Stock, the Registration
Statements, the General Disclosure Package, each Issuer Free Writing Prospectus and the Prospectus and the transactions contemplated
hereby shall be reasonably satisfactory in all material respects to counsel for the Underwriters, and the Company shall have furnished
to such counsel all documents and information that they may reasonably request to enable them to pass upon such matters.
(d) Reed
Smith LLP shall have furnished to the Representative such counsel’s written opinion, as counsel to the Company, addressed
to the Underwriters and dated such Closing Date, in form and substance as agreed to by Reed Smith LLP and counsel to the Underwriters.
(e) Reed
Smith LLP shall have furnished to the Representative such counsel’s negative assurance statement, as counsel to the Company,
addressed to the Underwriters and dated such Closing Date, in form and substance as agreed to by Reed Smith LLP and counsel to
the Underwriters.
(f) [Intentionally
Omitted].
(g) The
Representative shall have received from Ellenoff Grossman & Schole LLP, counsel for the Underwriters, such counsel’s
written opinion and negative assurance statement, dated such Closing Date, with respect to such matters as the Representative
may reasonably require, and the Company shall have furnished to such counsel such documents as they request for enabling them
to pass upon such matters.
(h) At
the time of the execution of this Agreement, the Representative shall have received from KMJ Corbin & Company LLP a letter,
addressed to the Underwriters, executed and dated such date, in form and substance satisfactory to the Representative (i) confirming
that they are an independent registered accounting firm with respect to the Company within the meaning of the Securities Act and
the Rules and Regulations and PCAOB and (ii) stating the conclusions and findings of such firm, of the type ordinarily included
in accountants’ “comfort letters” to underwriters, with respect to the financial statements and certain financial
information contained or incorporated by reference in the Registration Statements, the General Disclosure Package and the Prospectus.
(i) On
the effective date of any post-effective amendment to any Registration Statement and on such Closing Date, the Representative
shall have received a letter (the “bring-down letter”) from KMJ Corbin & Company LLP addressed to the Underwriters
and dated such Closing Date confirming, as of the date of the bring-down letter (or, with respect to matters involving changes
or developments since the respective dates as of which specified financial information is given in the General Disclosure Package
and the Prospectus, as the case may be, as of a date not more than three (3) business days prior to the date of the bring-down
letter), the conclusions and findings of such firm, of the type ordinarily included in accountants’ “comfort letters”
to underwriters, with respect to the financial information and other matters covered by its letter delivered to the Underwriters
concurrently with the execution of this Agreement pursuant to paragraph (h) of this Section 6.
(j) The
Company shall have furnished to the Representative a certificate, dated such Closing Date, of its Chief Executive Officer and
its Chief Financial Officer stating that (i) such officers have carefully examined the Registration Statement, the General Disclosure
Package, any Permitted Free Writing Prospectus and the Prospectus and, in their opinion, the Registration Statements and each
amendment thereto, at the Applicable Time, as of the date of this Agreement and as of such Closing Date did not include any untrue
statement of a material fact and did not omit to state a material fact required to be stated therein or necessary to make the
statements therein not misleading, and the General Disclosure Package, as of the Applicable Time and as of such Closing Date,
any Permitted Free Writing Prospectus as of its date and as of such Closing Date, the Prospectus and each amendment or supplement
thereto, as of the respective date thereof and as of such Closing Date, did not include any untrue statement of a material fact
and did not omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances
in which they were made, not misleading, (ii) since the effective date of the Initial Registration Statement, no event has occurred
which should have been set forth in a supplement or amendment to the Registration Statements, the General Disclosure Package or
the Prospectus, that has not been so set forth therein (iii) to their knowledge, as of such Closing Date, the representations
and warranties of the Company in this Agreement are true and correct and the Company has complied with all agreements and satisfied
all conditions on its part to be performed or satisfied hereunder at or prior to such Closing Date, and (iv) there has not been,
subsequent to the date of the most recent audited financial statements included or incorporated by reference in the General Disclosure
Package, any material adverse change in the financial position or results of operations of the Company and the Subsidiaries, or
any change or development that, singularly or in the aggregate, would involve a material adverse change or a prospective material
adverse change, in or affecting the condition (financial or otherwise), results of operations, business, assets or prospects of
the Company and the Subsidiaries taken as a whole, except as set forth in the Prospectus.
(k)
[Intentionally Omitted].
(l) Since
the date of the latest audited financial statements included in the General Disclosure Package or incorporated by reference in
the General Disclosure Package as of the date hereof, (i) neither the Company nor any of the Subsidiaries shall have sustained
any loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance,
or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth in the General Disclosure
Package, and (ii) there shall not have been any change in the capital stock (other than stock option and warrant exercises and
stock repurchases in the ordinary course of business) or long-term debt of the Company or the Subsidiaries, or any change, or
any development involving a prospective change, in or affecting the business, general affairs, management, financial position,
stockholders’ equity or results of operations of the Company and the Subsidiaries, otherwise than as set forth in the General
Disclosure Package, the effect of which, in any such case described in clause (i) or (ii) of this paragraph (l), is, in the judgment
of the Representative, so material and adverse as to make it impracticable or inadvisable to proceed with the sale or delivery
of the Stock on the terms and in the manner contemplated in the General Disclosure Package.
(m) No
action shall have been taken and no law, statute, rule, regulation or order shall have been enacted, adopted or issued by any
governmental agency or body which would prevent the issuance or sale of the Stock or materially and adversely affect or potentially
materially and adversely affect the business or operations of the Company; and no injunction, restraining order or order of any
other nature by any federal or state court of competent jurisdiction shall have been issued which would prevent the issuance or
sale of the Stock or materially and adversely affect or potentially materially and adversely affect the business or operations
of the Company.
(n) [Intentionally
Omitted].
(o) Subsequent
to the execution and delivery of this Agreement there shall not have occurred any of the following: (i) trading in any of the
Company’s securities shall have been suspended or materially limited by the Commission or by the NASDAQ Capital Market,
or trading in securities generally on the New York Stock Exchange, NASDAQ Capital Market, NASDAQ Global Market, NASDAQ Global
Select Market or the NYSE MKT or in the over-the-counter market, or trading in any securities of the Company on any exchange or
in the over-the-counter market, shall have been suspended or materially limited, or minimum or maximum prices or maximum range
for prices shall have been established on any such exchange or such market by the Commission, by such exchange or market or by
any other regulatory body or governmental authority having jurisdiction, (ii) a banking moratorium shall have been declared by
Federal or state authorities or a material disruption has occurred in commercial banking or securities settlement or clearance
services in the United States, (iii) the United States shall have become engaged in hostilities, or the subject of an act of terrorism,
or there shall have been an outbreak of or escalation in hostilities involving the United States, or there shall have been a declaration
of a national emergency or war by the United States or (iv) there shall have occurred such a material adverse change in general
economic, political or financial conditions (or the effect of international conditions on the financial markets in the United
States shall be such) as to make it, in the judgment of the Representative, impracticable or inadvisable to proceed with the sale
or delivery of the Stock on the terms and in the manner contemplated in the General Disclosure Package and the Prospectus.
(p) The
Representative shall have received on and as of such Closing Date satisfactory evidence of the good standing of the Company and
the Significant Subsidiary in their respective jurisdictions of organization and their good standing as foreign entities in such
other jurisdictions as the Representative may reasonably request, in each case in writing or any standard form of telecommunication
from the appropriate Governmental Authorities of such jurisdictions.
(q) The
Representative shall have received the written agreements, substantially in the form of Exhibit A hereto, of the persons
and entities listed in Exhibit B to this Agreement.
(r) The
Company shall have furnished to the Representative a Secretary’s Certificate of the Company, in form and substance reasonably
satisfactory to counsel for the Underwriters.
(s) If
required in accordance with applicable listing rules of the NASDAQ Capital Market, the Company shall have filed a Notification:
Listing of Additional Shares with the NASDAQ Capital Market and shall have received no objection thereto from the NASDAQ Capital
Market.
(t) On
or prior to such Closing Date, the Company shall have furnished to the Representative such further certificates and documents
as the Representative may reasonably request.
All
opinions, letters, evidence and certificates mentioned above or elsewhere in this Agreement shall be deemed to be in compliance
with the provisions hereof only if they are in form and substance reasonably satisfactory to counsel for the Underwriters.
7. Indemnification
and Contribution.
(a) The
Company shall indemnify and hold harmless:
each
Underwriter, its directors, officers, managers, members, employees, representatives and agents and each person, if any, who controls
any Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (collectively the “Underwriter
Indemnified Parties,” and each an “Underwriter Indemnified Party”) against any loss, claim, damage,
expense or liability whatsoever (or any action, investigation or proceeding in respect thereof), joint or several, to which such
Underwriter Indemnified Party may become subject, under the Securities Act or otherwise, insofar as such loss, claim, damage,
expense, liability, action, investigation or proceeding arises out of or is based upon (A) any untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus, any Issuer Free Writing Prospectus, any "issuer information"
that is used in connection with the offering and sale of the Stock by, or with the approval of, the Company filed or required
to be filed pursuant to Rule 433(d) of the Rules and Regulations, any Registration Statement or the Prospectus, or in any amendment
or supplement thereto or document incorporated by reference therein, or (B) the omission or alleged omission to state in any Preliminary
Prospectus, any Issuer Free Writing Prospectus, any "issuer information" that is used in connection with the offering
and sale of the Stock by, or with the approval of, the Company filed or required to be filed pursuant to Rule 433(d) of the Rules
and Regulations, any Registration Statement or the Prospectus, or in any amendment or supplement thereto or document incorporated
by reference therein, a material fact required to be stated therein or necessary to make the statements therein in light of (other
than in the case of any Registration Statement) the circumstances under which they are made not misleading, and shall reimburse
each Underwriter Indemnified Party promptly upon demand for any legal fees or other expenses reasonably incurred by that Underwriter
Indemnified Party in connection with investigating, or preparing to defend, or defending against, or appearing as a third party
witness in respect of, or otherwise incurred in connection with, any such loss, claim, damage, expense, liability, action, investigation
or proceeding, as such fees and expenses are incurred; provided, however, that the Company shall not be liable in
any such case to the extent that any such loss, claim, damage, expense or liability arises out of or is based upon an untrue statement
or alleged untrue statement in, or omission or alleged omission from any Preliminary Prospectus, any Registration Statement or
the Prospectus, or any such amendment or supplement thereto, or any Issuer Free Writing Prospectus made in reliance upon and in
conformity with, written information furnished to the Company through the Representative by or on behalf of any Underwriter specifically
for inclusion therein, which information the parties hereto agree is limited to the Underwriters’ Information (as defined
in Section 17).
The
indemnity agreement in this Section 7(a) is not exclusive and is in addition to each other liability which the Company might have
under this Agreement or otherwise, and shall not limit any rights or remedies which may otherwise be available under this Agreement,
at law or in equity to any Underwriter Indemnified Party.
(b) [Intentionally
Omitted].
(c) Each
Underwriter, severally and not jointly, shall indemnify and hold harmless the Company and the Company’s directors, its officers
who signed the Registration Statement and each person, if any, who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act (collectively the “Company Indemnified Parties” and each a
“Company Indemnified Party”) against any loss, claim, damage, expense or liability whatsoever (or any action,
investigation or proceeding in respect thereof), joint or several, to which such Company Indemnified Party may become subject,
under the Securities Act or otherwise, insofar as such loss, claim, damage, expense, liability, action, investigation or proceeding
arises out of or is based upon (i) any untrue statement or alleged untrue statement of a material fact contained in any Preliminary
Prospectus, any Issuer Free Writing Prospectus, any "issuer information" that is used in connection with the offering
and sale of the Stock by, or with the approval of, the Company filed or required to be filed pursuant to Rule 433(d) of the Rules
and Regulations, filed or required to be filed pursuant to Rule 433(d) of the Rules and Regulations, any Registration Statement
or the Prospectus, or in any amendment or supplement thereto, or (ii) the omission or alleged omission to state in any Preliminary
Prospectus, any Issuer Free Writing Prospectus, any "issuer information" filed or required to be filed pursuant to Rule
433(d) of the Rules and Regulations, any Registration Statement or the Prospectus, or in any amendment or supplement thereto,
a material fact required to be stated therein or necessary to make the statements therein, in light of (other than in the case
of any Registration Statement) the circumstances under which they are made not misleading, but in each case only to the extent
that the untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity
with, written information furnished to the Company through the Representative by or on behalf of any Underwriter specifically
for inclusion therein, which information the parties hereto agree is limited to the Underwriters’ Information as defined
in Section 17, and shall reimburse the Company Indemnified Parties promptly upon demand for any legal or other expenses reasonably
incurred by such party in connection with investigating or preparing to defend or defending against or appearing as third party
witness in connection with any such loss, claim, damage, liability, action, investigation or proceeding, as such fees and expenses
are incurred. This indemnity agreement is not exclusive and will be in addition to any liability which the Underwriters might
otherwise have and shall not limit any rights or remedies which may otherwise be available under this Agreement, at law or in
equity to the Company Indemnified Parties.
(d) Promptly
after receipt by an indemnified party under this Section 7 of notice of the commencement of any action, the indemnified party
shall, if a claim in respect thereof is to be made against an indemnifying party under this Section 7, notify such indemnifying
party in writing of the commencement of that action; provided, however, that the failure to notify the indemnifying party
shall not relieve it from any liability which it may have under this Section 7 except to the extent it has been materially prejudiced
by such failure; and, provided, further, that the failure to notify an indemnifying party shall not relieve it from any
liability which it may have to an indemnified party otherwise than under this Section 7. If any such action shall be brought against
an indemnified party, and it shall notify the indemnifying party thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it wishes, jointly with any other similarly notified indemnifying party, to assume the defense
of such action with counsel reasonably satisfactory to the indemnified party (which counsel shall not, except with the written
consent of the indemnified party, be counsel to the indemnifying party). After notice from the indemnifying party to the indemnified
party of its election to assume the defense of such action, except as provided herein, the indemnifying party shall not be liable
to the indemnified party under Section 7 for any legal or other expenses subsequently incurred by the indemnified party in connection
with the defense of such action other than reasonable costs of investigation; provided, however, that any indemnified party
shall have the right to employ separate counsel in any such action and to participate in the defense of such action but the fees
and expenses of such counsel (other than reasonable costs of investigation) shall be at the expense of such indemnified party
unless (i) the employment thereof has been specifically authorized in writing by the Company in the case of a claim for indemnification
under Section 7(a) or the Underwriters in the case of a claim for indemnification under Section 7(c), (ii) such indemnified party
shall have been advised by its counsel that there may be one or more legal defenses available to it which are different from or
additional to those available to the indemnifying party or (iii) the indemnifying party has failed to assume the defense of such
action and employ counsel reasonably satisfactory to the indemnified party within a reasonable period of time after notice of
the commencement of the action or the indemnifying party does not diligently defend the action after assumption of the defense,
in which case, if such indemnified party notifies the indemnifying party in writing that it elects to employ separate counsel
at the expense of the indemnifying party, the indemnifying party shall not have the right to assume the defense of (or, in the
case of a failure to diligently defend the action after assumption of the defense, to continue to defend) such action on behalf
of such indemnified party and the indemnifying party shall be responsible for legal or other expenses subsequently incurred by
such indemnified party in connection with the defense of such action; provided, however, that the indemnifying party
shall not, in connection with any one such action or separate but substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of more than one
separate firm of attorneys at any time for all such indemnified parties (in addition to any local counsel), which firm shall be
designated in writing by the Representative if the indemnified parties under this Section 7 consist of any Underwriter Indemnified
Party or by the Company if the indemnified parties under this Section 7 consist of any Company Indemnified Parties. Subject
to this Section 7(d), the amount payable by an indemnifying party under Section 7 shall include, but not be limited to, (x) reasonable
legal fees and expenses of counsel to the indemnified party and any other expenses in investigating, or preparing to defend or
defending against, or appearing as a third party witness in respect of, or otherwise incurred in connection with, any action,
investigation, proceeding or claim, and (y) all amounts paid in settlement of any of the foregoing. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of judgment with respect
to any pending or threatened action or any claim whatsoever, in respect of which indemnification or contribution could be sought
under this Section 7 (whether or not the indemnified parties are actual or potential parties thereto), unless such settlement,
compromise or consent (i) includes an unconditional release of each indemnified party in form and substance reasonably satisfactory
to such indemnified party from all liability arising out of such action or claim and (ii) does not include a statement as to or
an admission of fault, culpability or a failure to act by or on behalf of any indemnified party. Subject to the provisions of
the following sentence, no indemnifying party shall be liable for settlement of any pending or threatened action or any claim
whatsoever that is effected without its written consent (which consent shall not be unreasonably withheld or delayed), but if
settled with its written consent, if its consent has been unreasonably withheld or delayed or if there be a judgment for the plaintiff
in any such matter, the indemnifying party agrees to indemnify and hold harmless any indemnified party from and against any loss
or liability by reason of such settlement or judgment. In addition, if at any time an indemnified party shall have requested that
an indemnifying party reimburse the indemnified party for fees and expenses of counsel, such indemnifying party agrees that it
shall be liable for any settlement of the nature contemplated by Section 7(a) effected without its written consent if (i) such
settlement is entered into more than forty-five (45) days after receipt by such indemnifying party of the request for reimbursement,
(ii) such indemnifying party shall have received notice of the terms of such settlement at least thirty (30) days prior to such
settlement being entered into and (iii) such indemnifying party shall not have reimbursed such indemnified party in accordance
with such request prior to the date of such settlement.
(e) If
the indemnification provided for in this Section 7 is unavailable or insufficient to hold harmless an indemnified party under
Section 7(a) or 7(c), then each indemnifying party shall, in lieu of indemnifying such indemnified party, contribute to the amount
paid, payable or otherwise incurred by such indemnified party as a result of such loss, claim, damage, expense or liability (or
any action, investigation or proceeding in respect thereof), as incurred, (i) in such proportion as shall be appropriate to reflect
the relative benefits received by the Company on the one hand and the Underwriters on the other from the offering of the Stock,
or (ii) if the allocation provided by clause (i) of this Section 7(e) is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause (i) of this Section 7(e) but also the relative
fault of the Company on the one hand and the Underwriters on the other with respect to the statements, omissions, acts or failures
to act which resulted in such loss, claim, damage, expense or liability (or any action, investigation or proceeding in respect
thereof) as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand
and the Underwriters on the other with respect to such offering shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Stock purchased under this Agreement (before deducting expenses) received by the Company bear
to the total underwriting discounts and commissions received by the Underwriters with respect to the Stock purchased under this
Agreement, in each case as set forth in the table on the cover page of the Prospectus. The relative fault of the Company on the
one hand and the Underwriters on the other shall be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied
by the Company on the one hand or the Underwriters on the other, the intent of the parties and their relative knowledge, access
to information and opportunity to correct or prevent such untrue statement, omission, act or failure to act; provided that
the parties hereto agree that the written information furnished to the Company through the Representative by or on behalf of the
Underwriters for use in the Preliminary Prospectus, if any, any Registration Statement or the Prospectus, or in any amendment
or supplement thereto, consists solely of the Underwriters’ Information as defined in Section 17.
(f) The
Company and the Underwriters agree that it would not be just and equitable if contributions pursuant to Section 7(e) above were
to be determined by pro rata allocation or by any other method of allocation which does not take into account the equitable considerations
referred to Section 7(e) above. The amount paid or payable by an indemnified party as a result of the loss, claim, damage, expense,
liability, action, investigation or proceeding referred to in Section 7(e) above shall be deemed to include, subject to the limitations
set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating, preparing
to defend or defending against or appearing as a third party witness in respect of, or otherwise incurred in connection with,
any such loss, claim, damage, expense, liability, action, investigation or proceeding. Notwithstanding the provisions of this
Section 7, no Underwriter shall be required to contribute any amount in excess of the total underwriting discounts and commissions
received by such Underwriter with respect to the offering of the Stock exceeds the amount of any damages which the Underwriter
has otherwise paid or become liable to pay by reason of any untrue or alleged untrue statement, omission or alleged omission,
act or alleged act or failure to act or alleged failure to act. No Person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent
misrepresentation. The Underwriter’ obligations to contribute as provided in this Section 7 are several in proportion to
their respective underwriting obligations and not joint.
8. Termination.
The obligations of the Underwriters hereunder may be terminated by the Representative, in its absolute discretion by notice
given to the Company prior to delivery of and payment for the Stock if, prior to that time, any of the events described in Sections
6(l), 6(n) or 6(o) have occurred or if the Underwriters shall decline to purchase the Stock for any reason permitted under this
Agreement.
9. Reimbursement
of Underwriters’ Expenses. Notwithstanding anything to the contrary in this Agreement, if (a) this Agreement
shall have been terminated pursuant to Section 8, (b) the Company shall fail to tender the Stock for delivery to the Underwriters
for any reason not permitted under this Agreement, (c) the Underwriters shall decline to purchase the Stock for any reason permitted
under this Agreement or (d) the sale of the Stock is not consummated because any condition to the obligations of the Underwriters
set forth herein is not satisfied or because of the refusal, inability or failure on the part of the Company to perform any agreement
herein or to satisfy any condition or to comply with the provisions hereof, then in addition to the payment of amounts in accordance
with Section 5, the Company shall reimburse the Underwriters for the fees and expenses of Underwriters’ counsel and for
such other out-of-pocket expenses as shall have been reasonably incurred by them in connection with this Agreement and the proposed
purchase of the Stock, including, without limitation, travel and lodging expenses of the Underwriters, and upon demand the Company
shall pay the full amount thereof to the Underwriters, provided, that if this Agreement is terminated pursuant to Section
10 by reason of the default of one or more Underwriters, the Company shall not be obligated to reimburse any defaulting Underwriter
on account of expenses to the extent incurred by such defaulting Underwriter.
10. Substitution
of Underwriters. If any Underwriter or Underwriters shall default in its or their obligations to purchase shares of
Stock hereunder on any Closing Date and the aggregate number of shares which such defaulting Underwriter or Underwriters agreed
but failed to purchase does not exceed ten percent (10%) of the total number of shares to be purchased by all Underwriters on
such Closing Date, the other Underwriters shall be obligated severally, in proportion to their respective commitments hereunder,
to purchase the shares which such defaulting Underwriter or Underwriters agreed but failed to purchase on such Closing Date. If
any Underwriter or Underwriters shall so default and the aggregate number of shares with respect to which such default or defaults
occur is more than ten percent (10%) of the total number of shares to be purchased by all Underwriters on such Closing Date and
arrangements satisfactory to the Representative and the Company for the purchase of such shares by other persons are not made
within forty-eight (48) hours after such default, this Agreement shall terminate.
If
the remaining Underwriters or substituted Underwriters are required hereby or agree to take up all or part of the shares of Stock
of a defaulting Underwriter or Underwriters on such Closing Date as provided in this Section 10, (i) the Company shall have
the right to postpone such Closing Date for a period of not more than five (5) full business days in order that the Company may
effect whatever changes may thereby be made necessary in the Registration Statements or the Prospectus, or in any other documents
or arrangements, and the Company agrees promptly to file any amendments to the Registration Statements or supplements to the Prospectus
which may thereby be made necessary, and (ii) the respective numbers of shares to be purchased by the remaining Underwriters or
substituted Underwriters shall be taken as the basis of their underwriting obligation for all purposes of this Agreement. Nothing
herein contained shall relieve any defaulting Underwriter of its liability to the Company or the other Underwriters for damages
occasioned by its default hereunder. Any termination of this Agreement pursuant to this Section 10 shall be without liability
on the part of any non-defaulting Underwriter or the Company, except that the representations, warranties, covenants, indemnities,
agreements and other statements set forth in Section 2, the obligations with respect to expenses to be paid or reimbursed pursuant
to Sections 5 and 9 and the provisions of Section 7 and Sections 11 through 20, inclusive, shall not terminate and shall remain
in full force and effect.
11. Absence
of Fiduciary Relationship. The Company acknowledges and agrees that:
(a)
each Underwriter’s responsibility to the Company is solely contractual in nature, the Underwriters have been retained
solely to act as underwriters in connection with the sale of the Stock and no fiduciary, advisory or agency relationship between
the Company and any Underwriter has been created in respect of any of the transactions contemplated by this Agreement, irrespective
of whether any Underwriter has advised or is advising the Company on other matters;
(b)
the price of the Stock set forth in this Agreement was established by the Company following discussions and arms-length negotiations
with the Underwriters, and the Company is capable of evaluating and understanding, and understand and accept, the terms, risks
and conditions of the transactions contemplated by this Agreement;
(c)
they have been advised that the Underwriters and their affiliates are engaged in a broad range of transactions which may involve
interests that differ from those of the Company and that the Underwriters have no obligation to disclose such interests and transactions
to the Company by virtue of any fiduciary, advisory or agency relationship; and
(d)
they waive, to the fullest extent permitted by law, any claims they may have against the Underwriters for breach of fiduciary
duty or alleged breach of fiduciary duty and agree that the Underwriters shall have no liability (whether direct or indirect)
to the Company in respect of such a fiduciary duty claim or to any person asserting a fiduciary duty claim on behalf of or in
right of the Company, including stockholders, employees or creditors of the Company.
12. Successors;
Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Underwriters, the Company, and their respective successors and assigns. Nothing
expressed or mentioned in this Agreement is intended or shall be construed to give any person, other than the persons mentioned
in the preceding sentence, any legal or equitable right, remedy or claim under or in respect of this Agreement, or any provisions
herein contained, this Agreement and all conditions and provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person; except that the representations, warranties, covenants, agreements
and indemnities of the Company contained in this Agreement shall also be for the benefit of the Underwriter Indemnified Parties,
and the indemnities of the Underwriters shall be for the benefit of the Company Indemnified Parties. It is understood that each
Underwriter’s responsibility to the Company is solely contractual in nature and the Underwriters do not owe the Company,
or any other party, any fiduciary duty as a result of this Agreement. No purchaser of any of the Stock from the Underwriters shall
be deemed to be a successor or assign by reason merely of such purchase.
13. Survival
of Indemnities, Representations, Warranties, etc.
The respective indemnities, covenants, agreements, representations, warranties and other statements of the Company and the Underwriters,
as set forth in this Agreement or made by them respectively, pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation made by or on behalf of the Underwriters, the Company or any person controlling any of them and
shall survive delivery of and payment for the Stock. Notwithstanding any termination of this Agreement, including without limitation
any termination pursuant to Section 8, the indemnities, covenants, agreements, representations, warranties and other statements
forth in Sections 2, 5, 7 and 9 and Sections 10 through 19, inclusive, of this Agreement shall not terminate and shall remain
in full force and effect at all times.
14. Notices.
All statements, requests, notices and agreements hereunder shall be in writing, and:
(a) if
to the Underwriters, shall be delivered or sent by mail, telex, facsimile transmission or email to Craig-Hallum Capital Group
LLC, Attention: Rick Hartfiel, Director of Investment Banking, Fax: (612) 334-6348 with a copy to the General Counsel, Fax: (612)
334-6399; and Ellenoff Grossman & Schole LLP, 1345 Avenue of the Americas, New York, NY 10105, Attention: Robert F. Charron,
Fax: (212) 401-4741;
(b) if
to the Company shall be delivered or sent by mail, telex, facsimile transmission or email to Neonode Inc. Attention: Lars Lindqvist,
Chief Financial Officer, Storgatan 23C, 114 55 Stockholm, Sweden, email: lars.lindqvist@neonode.com; with a copy (which shall
not constitute notice hereunder) to Reed Smith LLP, 101 Second Street, Suite 1800, San Francisco CA 94105, Attention: Donald C.
Reinke and David T. Mittelman, Fax: 415-391-8269;
provided,
however, that any notice to an Underwriter pursuant to Section 7 shall be delivered or sent by mail to such Underwriter at
its address set forth in its acceptance telex to the Representative, which address will be supplied to any other party hereto
by the Representative upon request. Any such statements, requests, notices or agreements shall take effect at the time of receipt
thereof.
15. Definition
of Certain Terms. For purposes of this Agreement, (a) “business
day” means any day on which the NASDAQ Capital Market is open for trading, (b) “subsidiary” has the meaning
set forth in Rule 405 of the Rules and Regulations, and (c) “significant subsidiary” has the meaning set forth
in Rule 1-02 of Regulation S-X of the Commission.
16. Governing
Law and Jurisdiction. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York, including without limitation Section 5-1401 of
the New York General Obligations. The Company irrevocably (a) submits to the non-exclusive jurisdiction of the Federal and
state courts in the Borough of Manhattan in The City of New York for the purpose of any suit, action or other proceeding arising
out of this Agreement or the transactions contemplated by this Agreement, the Registration Statements and any Preliminary Prospectus
or the Prospectus, (b) agrees that all claims in respect of any such suit, action or proceeding may be heard and determined by
any such court, (c) waives to the fullest extent permitted by applicable law, any immunity from the jurisdiction of any such court
or from any legal process, (d) agrees not to commence any such suit, action or proceeding other than in such courts, and (e) waives,
to the fullest extent permitted by applicable law, any claim that any such suit, action or proceeding is brought in an inconvenient
forum.
17. Underwriters’
Information.
The parties hereto acknowledge and agree that, for all purposes of this Agreement, the Underwriters’ Information consists
solely of the following information in the Prospectus: (i) the last paragraph on the front cover page concerning the terms of
the offering by the Underwriters; and (ii) the statements concerning the Underwriters contained in the fourth, eighth through
tenth, twelfth and thirteenth paragraphs under the heading “Underwriting.”
18. Authority
of the Representative. In connection with this Agreement, you
will act for and on behalf of the several Underwriters, and any action taken under this Agreement by the Representative, will
be binding on all the Underwriters.
19. Partial
Unenforceability. The invalidity or unenforceability of any
section, paragraph, clause or provision of this Agreement shall not affect the validity or enforceability of any other section,
paragraph, clause or provision hereof. If any section, paragraph, clause or provision of this Agreement is for any reason determined
to be invalid or unenforceable, there shall be deemed to be made such minor changes (and only such minor changes) as are necessary
to make it valid and enforceable.
20. General.
This Agreement constitutes the entire agreement of the parties to this Agreement and supersedes all prior written or oral and
all contemporaneous oral agreements, understandings and negotiations with respect to the subject matter hereof. In this Agreement,
the masculine, feminine and neuter genders and the singular and the plural include one another. The section headings in this Agreement
are for the convenience of the parties only and will not affect the construction or interpretation of this Agreement. This Agreement
may be amended or modified, and the observance of any term of this Agreement may be waived, only by a writing signed by the Company
and the Representative. Notwithstanding anything herein to the contrary, the Engagement Agreement, dated September 22, 2015, by
and between the Company and C-H shall continue to be effective and the terms therein shall continue to survive and be enforceable
by C-H, in accordance with it terms.
21. Counterparts.
This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
If
the foregoing is in accordance with your understanding of the agreement between the Company and the several Underwriters, kindly
indicate your acceptance in the space provided for that purpose below.
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Very truly
yours,
NEONODE INC. |
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Accepted
as of
the date first above written: |
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CRAIG-HALLUM
CAPITAL GROUP LLC |
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Acting
on its own behalf
and as Representative of several
Underwriters referred to in the
foregoing Agreement. |
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By:
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CRAIG-HALLUM
CAPITAL GROUP LLC |
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SCHEDULE
I
Name | |
Number of Shares of Stock to be Purchased |
CRAIG-HALLUM CAPITAL GROUP LLC | |
3,200,000 |
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Total | |
3,200,000 |
SCHEDULE
II
Pricing
Information
Stock
to be Sold: 3,200,000 shares
Offering
Price: $1.90 per share
Underwriting
Discounts and Commissions: 6.0%
Estimated
Net Proceeds to the Company (after underwriting discounts and commissions, but before transaction expenses): $5,715,200
SCHEDULE
III
General
Use Free Writing Prospectuses
None
EXHIBIT
A
Form
of Lock-Up Agreement
October
___, 2015
Craig-Hallum
Capital Group LLC
222
South Ninth Street, Suite 350
Minneapolis,
Minnesota 55402
Re:
Neonode Inc.
Dear
Sirs:
This
Agreement is being delivered to you in connection with the proposed Underwriting Agreement (the “Underwriting Agreement”)
between Neonode Inc., a Delaware corporation (the “Company”), and Craig-Hallum Capital Group LLC (“C-H”
or, the “Underwriter”), relating to the proposed public offering (the “Offering”) of shares
of the common stock, par value $0.001 per share (the “Common Stock”), of the Company.
In
order to induce you to enter into the Underwriting Agreement, and in light of the benefits that the Offering will confer upon
the undersigned in its capacity as a securityholder and/or an officer, director or employee of the Company, and for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned agrees with the Underwriter that,
during the period beginning on and including the date hereof through and including the date that is the 90th day after the date
of the Underwriting Agreement (the “Lock-Up Period”), the undersigned will not, without the prior written consent
of C-H, directly or indirectly, (i) offer, sell, assign, transfer, pledge, contract to sell, or otherwise dispose of, or publicly
announce the intention to otherwise dispose of, any shares of Common Stock (including, without limitation, Common Stock which
may be deemed to be beneficially owned by the undersigned in accordance with the rules and regulations promulgated under the Securities
Exchange Act of 1934, as the same may be amended or supplemented from time to time (the “Exchange Act”)(such
shares, the “Beneficially Owned Shares”)) or securities convertible into or exercisable or exchangeable for
Common Stock, (ii) enter into any swap, hedge or similar agreement or arrangement that transfers in whole or in part, the economic
risk of ownership of the Beneficially Owned Shares or securities convertible into or exercisable or exchangeable for Common Stock,
whether now owned or hereafter acquired by the undersigned or with respect to which the undersigned has or hereafter acquires
the power of disposition, or (iii) engage in any short selling of the Common Stock or securities convertible into or exercisable
or exchangeable for Common Stock. If (i) the Company issues an earnings release or material news or a material event relating
to the Company occurs during the last 17 days of the Lock-Up Period, or (ii) prior to the expiration of the Lock-Up Period, the
Company announces that it will release earnings results during the 16-day period beginning on the last day of the Lock-Up Period,
the Lock-Up Period shall be extended and the restrictions imposed by this Agreement shall continue to apply until the expiration
of the 18-day period beginning on the date of the issuance of the earnings release or the occurrence of the material news or the
occurrence of a material event, as applicable, unless C-H waives, in writing, such extension. The undersigned hereby agrees that,
prior to engaging in any transaction or taking any other action that is subject to the terms of this Agreement during the period
from the date hereof to and including the 34th day following the expiration of the initial Lock-Up Period, it will
give notice thereof to the Company and will not consummate such transaction or take any such action unless it has received written
confirmation from the Company that the Lock-Up Period (as such may have been extended pursuant to the terms of this Agreement)
has expired.
The
restrictions set forth in the immediately preceding paragraph shall not apply to:
(1) if
the undersigned is a natural person, any transfers made by the undersigned (a) as a bona fide gift to any member of the immediate
family (as defined below) of the undersigned, or to a trust the beneficiaries of which are exclusively the undersigned or members
of the undersigned’s immediate family, (b) by will or intestate succession upon the death of the undersigned or (c)
as a bona fide gift to a charity or educational institution,
(2) if
the undersigned is a corporation, partnership, limited liability company or other business entity, any transfers to any shareholder,
partner or member of, or owner of a similar equity interest in, the undersigned, as the case may be, if, in any such case, such
transfer is not for value, and
(3) if
the undersigned is a corporation, partnership, limited liability company or other business entity, any transfer made by the undersigned
(a) in connection with the sale or other bona fide transfer in a single transaction of all or substantially all of the undersigned’s
capital stock, partnership interests, membership interests or other similar equity interests, as the case may be, or all or substantially
all of the undersigned’s assets, in any such case not undertaken for the purpose of avoiding the restrictions imposed by
this Agreement or (b) to another corporation, partnership, limited liability company or other business entity so long as the transferee
is an affiliate (as defined below) of the undersigned and such transfer is not for value;
provided,
however, that in the case of any transfer described in clause (1), (2) or (3) above, it shall be a condition to the
transfer that (A) the transferee executes and delivers to C-H, acting on behalf of the Underwriters, not later than one business
day prior to such transfer, a written agreement, in the form of this Agreement (it being understood that any references to “immediate
family” in the agreement executed by such transferee shall expressly refer only to the immediate family of the undersigned
and not to the immediate family of the transferee), and (B) if the undersigned is required to file a report under Section 16(a)
of the Exchange Act reporting a reduction in beneficial ownership of shares of Common Stock or Beneficially Owned Shares or any
securities convertible into or exercisable or exchangeable for Common Stock or Beneficially Owned Shares during the Lock-Up Period
(as the same may be extended as described above), the undersigned shall include a statement in such report to the effect that,
in the case of any transfer pursuant to clause (1) above, such transfer is being made as a gift or by will or intestate succession
or, in the case of any transfer pursuant to clause (2) above, such transfer is being made to a shareholder, partner or member
of, or owner of a similar equity interest in, the undersigned and is not a transfer for value or, in the case of any transfer
pursuant to clause (3) above, such transfer is being made either (a) in connection with the sale or other bona fide transfer in
a single transaction of all or substantially all of the undersigned’s capital stock, partnership interests, membership interests
or other similar equity interests, as the case may be, or all or substantially all of the undersigned’s assets or (b) to
another corporation, partnership, limited liability company or other business entity that is an affiliate of the undersigned and
such transfer is not for value. For purposes of this paragraph, “immediate family” shall mean a spouse, child, grandchild
or other lineal descendant (including by adoption), father, mother, brother or sister of the undersigned; and “affiliate”
shall have the meaning set forth in Rule 405 under the Securities Act of 1933, as amended.
For
avoidance of doubt, nothing in this Agreement prohibits the undersigned from exercising any options or warrants to purchase Common
Stock (which exercises may be effected on a cashless basis to the extent the instruments representing such options or warrants
permit exercises on a cashless basis), it being understood that any Common Stock issued upon such exercises will be subject to
the restrictions of this Agreement.
In
order to enable this covenant to be enforced, the undersigned hereby consents to the Company placing stop transfer instructions
with the Company’s transfer agent with respect to any Common Stock or securities convertible into or exercisable or exchangeable
for Common Stock.
The
undersigned further agrees that (i) it will not, during the Lock-Up Period (as the same may be extended as described above),
make any demand or request for or exercise any right with respect to the registration under the Securities Act of 1933, as amended,
of any shares of Common Stock or other Beneficially Owned Shares or any securities convertible into or exercisable or exchangeable
for Common Stock or other Beneficially Owned Shares, and (ii) the Company may, with respect to any Common Stock or other
Beneficially Owned Shares or any securities convertible into or exercisable or exchangeable for Common Stock or other Beneficially
Owned Shares owned or held (of record or beneficially) by the undersigned, cause the transfer agent or other registrar to enter
stop transfer instructions and implement stop transfer procedures with respect to such securities during the Lock-Up Period (as
the same may be extended as described above).
The
undersigned hereby represents and warrants that the undersigned has full power and authority to enter into this Agreement and
that this Agreement has been duly authorized (if the undersigned is not a natural person), executed and delivered by the undersigned
and is a valid and binding agreement of the undersigned. This Agreement and all authority herein conferred are irrevocable and
shall survive the death or incapacity of the undersigned (if a natural person) and shall be binding upon the heirs, personal representatives,
successors and assigns of the undersigned.
It
is understood that, if (i) the Company notifies C-H that it does not intend to proceed with the proposed public offering of Common
Stock, (ii) the Underwriting Agreement (other than the provisions thereof which survive termination) shall terminate or be terminated
prior to payment for and delivery of the shares of Common Stock to be sold thereunder, or (iii) the proposed public offering of
Common Stock shall not have been completed by October 22, 2015, this Agreement shall immediately be terminated and the undersigned
shall be released from all obligations under this Agreement. The undersigned acknowledges and agrees that whether or not any Offering
of Common Stock actually occurs depends on a number of factors, including market conditions.
This
Agreement shall be governed by and construed in accordance with the internal laws of the State of New York applicable to agreements
made and to be performed in such state.
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Very
truly yours, |
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EXHIBIT
B
Officers,
Directors, and Shareholders Executing Lock-Up Agreements
Per
Bystedt
Phenning
Holdings Limited
Thomas
Eriksson
John
Reardon
Lars
Lindqvist
Mats
Dahlin
Per
Lofgren
Exhibit B-1
Exhibit 5.1
[Reed
Smith LLP letterhead]
October
7, 2015
Neonode
Inc.
Storgatan
23C
SE-114 55
Stockholm
Sweden
Re: Neonode
Inc.
Ladies and
Gentlemen:
We
have acted a counsel to Neonode Inc., a Delaware corporation, (“Company”), in connection with (i) the registration
statement on Form S-3 (File No. 333-196426) (the “Registration Statement”) filed by the Company on May 30, 2014 with
the Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (“Act”);
and (ii) the prospectus supplement, dated October 7, 2015 (the “Prospectus Supplement”) relating to the issuance and
sale by the Company of up to 3,200,000 shares of the Company’s common stock, $0.001 par value, (the “Shares”).
We
have examined originals or copies, certified or otherwise identified to our satisfaction, of (i) the Company’s Amended and
Restated Certificate of Incorporation, (ii) the Company’s By-laws, (iii) the Registration Statement, (iv) the Prospectus
Supplement, and (v) such records of the Company, certificates of officers of the Company and public officials, and other documents
as we have deemed relevant and necessary as a basis for the opinions hereinafter expressed. In such examination, we have assumed
the genuineness of all signatures, the authenticity of all documents submitted to us as certified copies or photocopies, and the
authenticity of the originals of such documents.
Based
on our examination mentioned above and subject to the qualifications stated herein, we are of the opinion that the Shares will
be, when sold in the manner described in the Prospectus Supplement, validly issued, fully paid and non-assessable.
We
hereby consent to the filing of this opinion with the Commission in accordance with the requirements of Item 601(b)(5) of Regulation
S-K under the Act as an exhibit to the Current Report on Form 8-K to be filed by the Company in connection with the sale of the
Shares and to the use of our name in the Prospectus Supplement, and in any amendment or supplement thereto.
In
giving the foregoing consent, we do not admit that we are in the category of persons whose consent is required under Section 7
of the Act, or the rules and regulations of the Commission.
Very truly
yours,
/s/ Reed
Smith LLP
Reed Smith
LLP
Exhibit 99.1
Neonode
Announces Pricing of Public Offering of Common Stock
STOCKHOLM,
SWEDEN – October 7, 2015 – Neonode Inc. (NASDAQ: NEON) (“Neonode” or the “Company”)
today announced the pricing of an underwritten public offering of 3,200,000 shares of common stock of the Company at a price to
the public of $1.90 per share. The offering is expected to close on or about October 13, 2015, subject to the satisfaction of
customary closing conditions.
Per
Bystedt (Chairman), Thomas Eriksson (Chief Executive Officer), and Mats Dahlin, members of Neonode’s Board of Directors,
intend to purchase an aggregate of $300,000 of shares of common stock from the underwriter in the offering at the public offering
price per share.
Gross
proceeds to the Company from the offering are expected to be approximately $6.1 million. Neonode anticipates using its net proceeds
from the offering primarily for general corporate purposes, including capital expenditures and working capital.
Craig-Hallum
Capital Group LLC acted as the sole book-running manager for the offering.
The
securities described above are being offered pursuant to an effective shelf registration statement previously filed by Neonode
with the Securities and Exchange Commission (the “SEC”). The securities may be offered only by means of a prospectus.
Copies of the final prospectus supplement and the accompanying prospectus relating to this offering, when available, will be available
on the SEC’s website located at http://www.sec.gov and may also be obtained from Craig-Hallum Capital Group LLC, 222 South
Ninth Street, Suite 350, Minneapolis, MN 55402, telephone 612-334-6300, email: prospectus@chlm.com.
Note:
This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there
be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful.
Note:
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.
These include, but are not limited to, statements relating to the Company’s common stock offering. These statements are
based on current assumptions, expectations and information available to Neonode management and involve a number of known and unknown
risks, uncertainties and other factors that may cause Neonode’s actual results, levels of activity, performance or achievements
to be materially different from any expressed or implied by these forward-looking statements. These risks, uncertainties, and
factors are discussed under “Risk Factors” and elsewhere in Neonode’s public filings with the U.S. Securities
and Exchange Commission from time to time, including Neonode’s Annual report on Form 10-K, quarterly reports on Form 10-Q,
and current reports on Form 8-K. You are advised to carefully consider these various risks, uncertainties and other factors. Although
Neonode management believes that the forward-looking statements contained in this press release are reasonable, it can give no
assurance that its expectations will be fulfilled. Forward-looking statements are made as of today’s date, and Neonode undertakes
no duty to update or revise them.
About
Neonode
Neonode
Inc. (NASDAQ:NEON) develops and licenses the next generation of MultiSensing® touch technologies, allowing companies
to differentiate themselves by making high performing touch and proximity sensing solutions at a competitive cost. Neonode is
at the forefront of providing unparalleled user experiences that offer significant advantages for OEM’s. This includes state-of-the-art
technology features such as low latency pen or brush sensing with high speed scanning, proximity-, pressure-, and depth sensing
capabilities and object-size measuring on any surface.
Neonode’s
patented MultiSensing touch technology is developed for a wide range of devices like wearable’s, notebooks, all-in-one computers,
monitors, mobile phones, tablets and e-readers, toys and gaming consoles, printers and office equipment and automotive systems.
NEONODE, the NEONODE Logo, ZFORCE and MULTISENSING are trademarks of Neonode Inc. registered in the United States and other countries.
ZFORCE CORE, ZFORCE PLUS and ZFORCE DRIVE are trademarks of Neonode Inc. All other trademarks are the property of their respective
owners. For more information please visit www.neonode.com.
©
2015, Neonode Inc. All rights reserved. Neonode is a registered trademark of Neonode Inc.
For
more information, please contact:
Investor
Relations:
David
Brunton
Email:
david.brunton@neonode.com
CFO
Lars
Lindqvist
E-mail:
lars.lindqvist@neonode.com
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